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Autumn Statement 2023

Chancellor of the Exchequer Jeremy Hunt MP delivered his Autumn Statement 2023. Please find a summary of his Statement below, alongside a roundup of the publications and consultations launched to accompany the speech, key details from the Office for Budget Responsibility’s latest Economic and Fiscal Outlook, and reaction from political parties, business groups, think tanks and trade unions.

The Chancellor's Speech

Personal taxes


  • Hand-rolling tobacco to be increased by additional 10% above Tobacco Duty Escalator

  • All rates of alcohol duty frozen until 01 August 2024

  • Employee National Insurance cut from 12% to 10%, from 06 January 2024

  • The Low Pay Commission’s recommendation to increase the National Living Wage by 9.8% to £11.44 per hour has been accepted


Business support


  • National Insurance relief for employers of eligible veterans to be extended for a further year

  • All headline recommendations from Lord Harrington’s review in Foreign Direct Investment accepted, in particular his recommendation to put in place a concierge service for large international investors, with funding for the Office for Investment increased to deliver this

  • HM Treasury will explore options for a Nat West retail share offer in the next 12 months subject to market conditions and achieving value for money


Science and Manufacturing


  • £500m will be invested over the next two years to fund further Innovation Centres “to help make the UK an AI powerhouse”

  • A further £50m of funding will be provided to pilot ways to increase number of apprentices in engineering and other key growth sectors where there are shortages

  • A call for evidence will be launched on how to bring in more investment by increasing the generosity of the Film and High End TV tax credits

  • A new simplified R&D tax relief will be created to combine the existing R&D expenditure credit and SME schemes, and reduce the rate at which loss-making companies are taxed within the merged scheme from 25% to 19%, and lower the threshold for additional support for R&D intensive loss-making SMEs to 30%

  • £4.5bn of support will be made available over 5 years to 2030 to attract investment into strategic manufacturing sectors, including £2bn of support for zero emission investments in automotive sector, £975m for aerospace, £520m for life sciences, and £960m for a new Green Industries Growth Accelerator focused on offshore wind, electricity networks, nuclear and hydrogen

  • Full expensing made permanent and a wider consultation launched on changes to capital allowances legislation

  • £5m will be granted to Imperial College to set up a Fleming Centre


Small businesses


  • To tackle late payments, a new condition will be introduced for any company bidding for large government contracts, to demonstrate that they pay their own invoices within an average of 55 days, with this reducing progressively to 30 days

  • The Small Business Multiplier for business rates will be frozen for a further year

  • The 75% business rate discount for retail, hospitality and leisure will be extended for a further year

  • Class 2 National Insurance will be abolished

  • Class 4 National Insurance will be reduced from 9% to 8% from April 2024




  • The state pension will be increased by 8.5% to £221.20 per week from April 2024

  • Support will be provided for the establishment of investment vehicles for pension funds, including through LIFTS competition, a new growth fund run by British Business Bank and opening the Pension Protection Fund as an investment vehicle for smaller defined benefit pension schemes

  • The Government will consult on giving savers a legal right to require a new employer to pay their pension contributions into their existing pension pot if they choose


Welfare, Benefits and Pensions


  • Universal Credit will be increased by 6.7% from April 2024 (equal to inflation in September 2023)

  • The Local Housing Allowance will be increased to the 30th percentile of local market rents

  • Over 180,000 more people will be helped through the Universal Support Programme and nearly 5,000 people will be offered treatment for mental health conditions and employment support

  • It will reform the fit note process “so treatment rather than time off becomes the default”, will reform the Work Capability Assessment to reflect greater flexibility and availability of home working, and will spend £1.3bn over next five years to help 700,000 with health conditions find jobs

  • £1.3bn of funding will be provided to help 300,000 people unemployed for over a year without an sickness or disability find work. Should they not find work after 18 months of intensive support, they will need to take part in mandatory work placement to increase their skills and improve their employability for their benefits to remain




  • The Government will publish its response to the Windsor Review and connections action plan, cutting grid access delays by 90% and offering up to £10,000 off electricity bills for those living closest to new transmission infrastructure, following conversations with National Grid, Octopus Energy and SSE


Housing and Planning


  • The planning system will be reformed to allow local authorities to recover the full costs of major business planning applications, in return for being required to meet guaranteed faster timelines

  • £110m will be invested to deliver high quality nutrient mitigation schemes

  • £32m will be invested to break the planning backlog and develop new housing quarters in Cambridge, London and Leeds

  • £450m will be allocated to the Local Authority Housing Fund to deliver 2,400 homes

  • The Government will consult on a new permitted development right to allow any house to be developed into two flats, provided the exterior remains unaffected


Levelling Up


  • Financial Incentives for investment zones and tax relief for freeports will be extended from 5 years to 10 years, with the Government also setting up a £150m investment opportunity fund

  • Three new investment zones focused on advanced manufacturing will be created in the West Midlands, East Midlands and Greater Manchester, and a further investment zone will be created in Wrexham and Flintshire

  • £50m of additional funding will be provided for high quality regeneration projects

  • £80 will be provided for new levelling up partnerships in Scotland, £500,000 will be provided to support the Hay Festival in Wales and £3m of additional funding will be provided to support the Tackling Paramilitarism Programme in Northern Ireland

Defence and Foreign Affairs


  • The Government will meet its NATO commitment to spend 2% of GDP on defence

  • £10m will be provided to support the Veterans Places, Pathways and People Programme




  • £7m will be provided over three years for organisations such as the Holocaust Education Trust to tackle anti-Semitism in schools and universities, and the £3m uplift to Community Security Trust will be repeated




  • Noted the Government will be bringing forward plans for a smoke-free generation

Accompanying Documents

  • Also published alongside the Autumn Statement was: a letter from the Chancellor and Business Secretary to regulators outlining the potential approaches to Growth Duty; Chief Scientific Adviser Angela McLean’s cross-cutting review on pro-innovation regulation and the government response;  the outcome the Making Tax Digital Small Business Review; the electricity networks connections action plan; an MoU for the Single Settlements for Greater Manchester and West Midlands Combined Authorities; the Harrington Review of Foreign Direct Investment and the government’s response; devolution deals for Hull and East Yorkshire, Greater Lincolnshire, Lancashire and Cornwall; two (1, 2) further papers on devolution;  consultation responses and a draft Statutory Instrument relating to Short Selling; proposals on speeding up infrastructure delivery; an evaluation of Venture Capital schemes; the National Quantum Strategy Missions; the Shared Outcomes Fund Round Three projects; a draft Statutory Instrument to create a new UK retail disclosure framework; and Government responses to reports on university spin-out companies, the RDI organisational landscape, improving nationally significant infrastructure planning, accelerating electricity transmission network build, and on the 2023 Fiscal Risks and Sustainability Report.

  • In addition, a National Insurance factsheet; the Annual Report on the UK Government’s Contingent Liabilities; a collection page related to Pensions Reform; a technical note on the Electricity Generator Levy and new investment exemption; details of the reforms to R&D tax reliefs; a letter from the Business Secretary to the FRC on the FRC’s remit and from the Chancellor to the Bank of England on the MPC’s remit and the FPC’s remit; a collection page on National Policy Statements for energy infrastructure; and a letter on Corporate Governance reform were also published.


  • The Government published outcomes to consultations on: extending the Growth Duty to include Ofgem, Ofwat and Ofcom; the Oil and Gas Fiscal Regime Review; the Digital Securities Sandbox; changes to the Construction Industry Scheme; extending the Income Tax cash basis for self-employed businesses; a discussion note on the Energy Profits Levy and the Energy Security Investment Mechanism; off-payroll working IR35 rules and non-compliance; the Work Capability Assessment; Occupational Health Services; and on community benefits for electricity transmission network infrastructure

  • In addition, consultations have been launched on: proposals to improve the economic regulation of the water, energy and fixed telecoms sectors; revised statutory guidance for the Growth Duty; recent trends, challenges and opportunities in the visual effects industry; permanent full expensing; and on proposals for a new 6-year Climate Change Agreements scheme. 

OBR Forecast

  • The Office for Budget Responsibility published its economic and fiscal outlook to accompany the Autumn Statement, in which it forecast growth of 0.7% next year and stated that inflation would take ‘until the second quarter of 2025 to return to the 2% target, more than a year later than forecast in March’. It also forecast that: borrowing will fall steadily from 5% of GDP this year to 1.1% of GDP by 2028-29, its lowest level since 2001-02; the tax burden will rise in every year to a post-war high of 37.7% of GDP by 2028-29; living standards are set to be 3.5% lower in 2024-25 than their pre-pandemic level; and that the medium-term fiscal outlook had ‘improved materially compared to March, with pre-measures borrowing forecast to be £26.8 billion lower in 2027-28’.

Political Reaction

  • The Labour Party warned that “growth has hit a dead end”, with none of the announcements “remotely compensating” for failure, including only a 2p cut to National Insurance. In her response to the Chancellor of the Exchequer, Shadow Chancellor Rachel Reeves MP criticised employment levels for not reaching pre-pandemic levels, due to people being out of work for long-term health issues, with growing NHS waiting lists adding to the problem. She listed that the Government have “blown £140 million on a discredited Rwanda scheme”, lost £7.2bn on fraud during the pandemic, £8.7bn on PPE and £57bn on HS2; and although she welcomed the increase in the National Living Wage, suggested that wages have been held back under the Government’s record. She concluded: “The country is crying out for change. This decaying government can change its personnel, but they have failed to change the direction of our country.”

  • The SNP said that the Statement was ‘too little, far too late’, with increased household bills ‘still outpacing the limited help on offer from Westminster’. They criticised the Government for failing to: freeze Council Tax; introduce Mortgage Interest Tax Relief; introduce a £400 energy bill rebate; and take action to reduce food prices.

  • The Liberal Democrats argued the Autumn Statement was ‘more stale nonsense from a Conservative government out of touch and out of ideas’, adding it was a ‘deception from Jeremy Hunt after years of cruel tax hikes on hard-working families from this government.’ The party also focused on health, on which it argues there was a ‘deafening silence’, adding that ‘dismal forecasts show the economy is on life support and reducing NHS waiting lists is the shot in the arm needed.’

  • The Green Party argued that the Government had ‘chosen headline-grabbing pre-election tax cut bribes over doing their job properly’, stating that a “few extra quid” would not help people struggling to access medical care, while also noting that the ‘impacts of the climate crisis are becoming ever more obvious and close to home.’ The Party instead set out a 10-point plan to ‘create a fairer, greener country’.

  • Plaid Cymru criticised the Government for trying to ‘conceal a grim reality for ordinary people across the UK’, stating that ‘The Autumn Statement failed to tackle the inequality crisis and the scourge of poverty’

Business Groups

  • The British Chambers of Commerce described the Statement as ‘giving hope to business’ and welcomed the decision to make full expensing permanent, support to help companies transition to net zero, and planning reforms to address issues with infrastructure. It said that plans to support people back into work have the potential to help grow the economy but called for a focus on ‘getting them into work that matches their capabilities and potential.’

  • The Federation of Small Businesses welcomed action on late payments, small businesses’ rates and self-employed taxation, stating that ‘driving out the worst payers from Government contracts and increasing the reputational risk faced by those large corporates who use their small suppliers as a form of free credit is not only the right thing to do to lessen the absolute stress and strain so many business owners face – it is also the way to increase the amount of working capital small businesses can put to good use building up their businesses and investing in the future.’

  • The CBI said that ‘while the move on National Insurance will give hard-pressed households some much needed breathing room, making full capital expensing a permanent feature of the tax system can be transformational for accelerating growth and improving living standards in the long-term.’ It added that moves to speed up planning and grid connectivity should also bolster business confidence to invest in high growth areas like green technologies, renewable energy and advanced manufacturing.

  • The Institute of Directors praised efforts to boost business investment, including making full expensing a permanent feature of the UK tax system, planning system reform and measures to promote foreign direct investment. However, it called for ‘more substantive measures’ to address skills shortages and warned that reforms to the R&D tax credit regime will offer less support than the earlier scheme.

  • ADS Group called the Statement a ‘welcome and timely step’, but indicated more still needed to be done to ‘secure UK advantage in an increasingly complex geopolitical environment’. 

  • MakeUK welcomed new the permanent extension of full expensing arguing ‘the biggest factor that companies want when planning investment decisions is certainty and this has now been provided’. They also welcomed ‘measures to boost engineering apprenticeships and stimulate advanced manufacturing’.

  • techUK argued Chancellor had 'outlined a significant package of incentives to boost business investment and grow the economy’, adding the ‘package announced was bigger than many expected and the Chancellor has backed many of techUK’s calls’. However it also stated that ‘against a backdrop of revised down economic forecasts from the OBR the Chancellor will need to move at pace to implement his plans.’ It welcomed the announcement of Quantum Missions, arguing that it pushes the UK ‘towards real-world deployment of quantum technologies’, and argued that Pillar 4 of the strategy recognises the role Government plays in driving growth and stated that it would work with the Office of Quantum on its delivery of the programmes missions.

  • BusinessLDN welcomed the announcement that full capital expensing will be permanent, stating that it would ‘encourage more long-term investment’, but criticised the Government’s lack of a funding deal for Transport for London and its failure to ‘re-instate VAT-free shopping for goods for international visitors’. It claimed that TfL requires cash to invest in ‘maintaining and upgrading’ the transport network, arguing that it would ‘drive growth, support its supply chain across the country and keep London moving’.

  • The City of London Corporation welcomed the Statement for its ‘focus on creating a business-friendly environment’ which ‘sends the right signals globally that the UK is a great place to invest’. The Corporation also welcomed the recommendations outlined in Lord Harrington’s review on attracting more foreign direct investment, and the permanent extension of full expensing.

  • The National Housing Federation argued ‘The Chancellor’s decision to unfreeze Local Housing Allowance is one we’ve long been calling for’ and welcomed the additional £3bn for the Affordable Homes Guarantee Scheme; however it also noted with concern ‘that tougher rules and potential benefit reductions for people who are unable to find a job will result in increased hardship’, and argued it was ‘hugely disappointing that the government has not used this Autumn Statement to release the full £3.8bn Social Housing Decarbonisation Fund’.

Think Tanks

  • The IEA argued it was a ‘step in the right direction towards lower taxes and economic growth, not a leap’, noting ‘the frozen income tax thresholds amount to a stealth tax increase of around £40bn annually by some estimates.’ It also warned that ‘the rapid increase in the minimum wage risks businesses cutting jobs and hours of some of the most vulnerable workers, including those with less skills and the young.’

  • The IPPR called for ‘bolder steps’ to help people with the cost of living, criticising the Chancellor for announcing ‘real-terms cuts to public investment, which will hold back economic prosperity’, and stressed that the UK’ sorely’ needs investment in schools, homes, hospitals and in net zero industries of the future.

  • The Institute for Fiscal Studies argued ‘The prudent thing would have been to build in a larger buffer into his plans, rather than only aim to meet the government’s poorly designed, and loose, fiscal target by a tiny margin’, noting that tax cuts have been paid for by ‘a bigger squeeze on the real-terms value of public sector budgets and an even bigger squeeze on public investment.’

  • The Adam Smith Institute emphasised support for the measures related to full expensing, tax relief for freeports and the abolition of Class Two National Insurance, as well as the accepting of many recommendations made by the Harrington Review into FDI. The ASI did add that the Chancellor would need to ‘lay out a plan for public spending restraint’.

  • The TaxPayers’ Alliance said the cut to National Insurance, the freezing of alcohol duty and the freezing of the small business rates multiplier were positive actions, but that increased tobacco taxes and the continuing freeze on tax thresholds were disappointing.

  • The Centre for Policy Studies celebrated the decision to make full expensing permanent, arguing it would ‘maximise business investment, boost productivity, and deliver higher levels of GDP’.

  • Onward emphasised that the Statement had included many of its own ideas, including: pension reform to unlock investment, community benefits to upgrade the grid, and tax cuts for workers.

  • The Growth Commission lamented that Corporation Tax was not cut, while estimating that the cut to National Insurance would increase growth by 0.6% over 20 years.

Trade Unions

  • The TUC criticised the Autumn Statement heavily, arguing it was ‘not a plan for rebuilding Britain’ but rather ‘a plan for levelling the country down’, adding that ‘cutting national insurance won’t make up for 13 continued years of economic failure on wages and living standards’.

  • GMB argued that the National Insurance cut was a ‘drop in the ocean when mortgages have doubled and energy bills are crippling household finances’.

  • UNISON labelled it a ‘desperate attempt to press the reset button’ in which ‘public services didn’t get a look in, aside from being told to deliver more for less’.

  • Prospect highlighted how ‘departmental spending plans would remain the same, meaning that due to inflation unprotected departments face a £19bn spending cut in real terms by 2027-28'.

  • Unite suggested the Statement ‘starves public services of the cash they need and fails to deliver to those on low incomes working on the front line’, noting it does ‘nothing to tackle the corporate profiteering which has fuelled the cost-of-living crisis'

  • The National Education Union declared that the Budget was ‘completely inadequate’ and made a ‘mockery of the Prime Minister’s repeated claim that education is at the heart of this Government’s priorities’.

  • The Transport Salaried Staffs' Association (TSSA) 'dismissed’ the Statement, arguing that the Government has little to offer workers beyond ‘empty union bashing rhetoric’.

  • The Union of Shop, Distributive and Allied Workers (USDAW) claimed that the Statement was a ‘desperate attempt to grab headlines in the hope that voters [would] forget thirteen years of austerity’.


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