Autumn statement 2023: key points at a glance
Hunt’s opening remarks
Jeremy Hunt says the government has taken difficult decisions to put the economy back on track and halve inflation, but “the work is not done”. The chancellor says his priorities are to avoid big government spending and high tax, and instead cut taxes and “reward hard work” with 110 “growth measures” for business.
Aletha Adu, political correspondent: The chancellor opens his second autumn statement with a few attempted jabs at the Labour party, insisting the government will not give the unions “unaffordable pay offers”, not ban new gas and oil exploration or increase borrowing by £28bn a year. Labour’s £28bn “green prosperity plan” is the party’s biggest single spending commitment; that has already been watered down.
Before he kicked off with economic forecasts, Hunt hoped to create some more distance between the Conservatives and Labour by using the moment to express his horror at the 7 October Hamas attack in Israel and announced up to £7m a year over the next few years for organisations such as the Holocaust Educational Trust to tackle antisemitism in schools and universities.
Growth
The chancellor says forecasts from the Office for Budget Responsibility show the economy will grow by 0.6% this year and 0.7% next.
It is now 1.8% larger than it was before the Covid-19 pandemic, according to the official figures, he says.
Inflation is expected to fall to 2.8% by the end of 2024 according to the spending watchdog, down from 11.1% last year when Hunt and Sunak took office.
GDP will then grow 1.4% in 2025, and 1.9% in 2026 and 2% in 2027 and 1.7% in 2028.
In March, the OBR had forecast the economy would shrink by 0.2% in 2023, before growing by 1.8% in 2024, 2.5 % in 2025, 2.1% in 2026 and 1.9% in 2027.
Aletha Adu, political correspondent: In what is meant to be an uplifting statement that could be the last before the next general election, Hunt leaned on the Office for Budget Responsibility forecast claiming the 110 measures announced will raise business investment, get more people into work, reduce inflation next year and increase GDP. The chancellor sought to portray the prime minister as getting the job done, in order to charm voters, suggesting Sunak has already ticked off three of his pledges.
Inflation
Inflation is expected to fall to 2.8% by the end of 2024 according to the spending watchdog, down from 11.1% last year when Hunt and Rishi Sunak took office.
Wages and benefits
As pre-announced, the national living wage will increase by more than a pound an hour from April to £11.44. It will also be extended to 21-year-olds.
Benefits will be increased by 6.7%, and there will be tougher requirements for those who claim them to look for work.
The state pension will be increased by 8.5%.
Hunt says he will increase the local housing allowance, which has been frozen since 2020, in a measure worth £800 for some households next year.
Borrowing
Hunt says headline debt is to be worth 94% of GDP by the end of the forecast period, lower than forecast by the OBR in March.
In cash terms, the OBR estimates the budget deficit – the gap between spending and income – is 4.5% of GDP in 2023-24.
In its previous forecasts in March, the OBR had estimated borrowing would be 5.1% of GDP or £132bn in cash terms, in 2023-24.