The Autumn Statement 2022 - Highlights

Chancellor Jeremy Hunt has delivered an Autumn budget aimed at stabilising the economy and to address increasing inflation.

Spending cuts totalling £30bn have been announced while tax rises equate to £24bn. This is in light of October’s inflation rate of 11.1% and warnings from the Bank of England that the UK is in a 2-year long recession, the longest on record.

Spending review:

• There will be spending squeezes across government departments, but the health budget will be protected.
• There will be targeted support for those on low incomes with the aid of a “work coach”.
• Households will see their energy bills rise from April when the government’s package of support becomes less generous. Typical users of gas and electricity will pay £3,000, up from £2,500, as the Energy Price Guarantee rises.

Increased support:

• An additional £2.3bn will be spent annually to support schools in England.
• The NHS budget will rise by £3.3bn.
• Schools and the NHS in Scotland, Wales and Northern Ireland will get an additional £1.5bn, £1.2bn and £650m respectively annually, going forward.
• The National Living Wage will be increased from the current level at £9.50 an hour for over-23s to £10.42, from April 2023.
• The state pension, benefits and tax credits will rise by 10.1%, in line with inflation.
• Additional cost of living payments will be made of £900 to those on means-tested benefits, £300 for pensioners and £150 for those on disability benefits.

Tax rises:

• The top rate of tax of 45% will now be applicable for income of £125,140, down from £150,000.
• Freezing thresholds for income tax and national insurance means millions will be paying more tax on their incomes.
• The windfall tax will increase from 25% up to 35%.
• Capital Gains Tax Annual Exempt amount reduced from £12,300 to £6,000 from April 2023, and to £3,000 from April 2024.
• Electric vehicles will no longer be exempt from the Vehicle Excise Duty from April 2025.
• Stamp duty cuts announced previously will now only be in place until March 2025.
In addition:
• The government remains committed to a 68% reduction in emissions by 2030, a promise made at COP26.
• Low-carbon energy remains a priority. As such, a new nuclear plant at Sizewell C will begin generating up to 7% of the UK’s electricity needs by the 2030s.
• Northern Powerhouse Rail, HS2 and the East West Rail projects will go ahead as planned.

The OBR (Office for Budget Responsibility) have confirmed that measures announced today will contribute to a shallower recession than initially feared.