Here are the key components of Jeremy Hunt’s £55 billion package of tax increases and spending cutbacks to put the United Kingdom “on a balanced path to stability.”
Here are the key points from Chancellor Jeremy Hunt’s fall statement to the House of Commons:
• Energy bill assistance for homes is extended under the energy price guarantee for a further year beyond April, but the average yearly payment will increase from £2,500 to £3,000. Amounts to around £500 in household assistance.
• Additional cost of living payments of £900 for households receiving means-tested benefits the next year, £300 for households of pensioners, and £150 for persons receiving disability benefits.
• An additional £1 billion in money to extend the household support fund for an additional twelve months.
• The government will proceed with the Sizewell C new nuclear reactor with a £700 million investment from taxpayers to increase energy security and diversify away from carbon.
• New financing of an additional £6 billion in energy efficiency beginning in 2025.
• Working age and disability benefits are increased by inflation by 10.1% for £11 billion.
• More than 600,000 Universal Credit recipients will be required to meet with a work coach to bring them into the workforce and higher-paying jobs.
In 2023/24, the increase in social rents will be controlled at a maximum of 7 percent.
• Beginning in April, the National Living Wage will increase by 9.7 percent to £10.42 per hour, equating to an annual wage increase of over $1,600 for full-time workers.
• The pension credit will increase by 10.1%, from £1470 for couples to £960 for single pensioners. This fulfills the so-called triple-lock guarantee.
• Reduces the threshold for payment of the 45p rate from £150,000 to £125,140.
• Maintains the income tax personal exemption, the higher rate threshold, the major national insurance thresholds, and the inheritance tax thresholds at their current levels for a further two years, until April 2028.
The dividend allowed will be reduced from £2,000 to £1,000 in 2019 and £500 in April 2024.
• The yearly exemption allowance for capital gains tax will decrease from £12,300 to £6,000 in 2019 and to £3,000 in April 2024, down from its current level of £12,300.
• Electric vehicles will no longer be exempt from vehicle excise charges beginning in April 2025.
• The stamp duty reductions announced in the mini-budget will continue in effect until March 31, 2025.
• While the threshold for employer contributions to National Insurance will be frozen until April 2028, the employment allowance will remain at its new, higher amount of £5,000 until March 2026.
• Reduce the deduction rate for R&D tax relief for SMBs to 86% and the credit rate to 10%, but increase the credit rate for separate R&D expenditures from 13% to 20%.
• Increase the windfall tax on big oil and gas companies from 25% to 35%. Next year, a 45% energy earnings levy will be imposed on electricity generators to raise a total of £14 billion.
Nearly two-thirds of premises would see no increase in business rates the following year. Thousands of pubs, restaurants, and small high street retailers will get £14 billion over the next five years, according to the report.
• By the end of the next year, decisions will have been made regarding reforms to EU laws in five growing industries: digital technology, life sciences, green industries, financial services, and advanced manufacturing.
• Public investment for R&D (research and development) would increase to £20bn by 2024/25, as part of a plan to make Britain the “new Silicon Valley.”
• “We will implement the Northern Powerhouse Rail core” Promises current funding for HS2 to Manchester, East West Rail, the new hospitals initiative, and the introduction of gigabit broadband.
• Adult social care will receive an additional £1 billion in grant cash next year and £1.7 billion the following year. This increases the available funds for the social care industry by up to £2.8 billion and £4.7 billion, respectively.
• Increases the NHS funding by £3.3 billion in each of the next two years.
• To invest an additional £2.3 billion annually in our schools.
• An additional £1,500,000,000 for the Scottish government, £1,200,000,000,000 for the Welsh government, and £650,000,000 for the Northern Ireland Executive.
• The Office of Budget Responsibility (OBR) projects that borrowing will total $177 billion this fiscal year and $140 billion in 2023/4.
• The OBR predicts “overall” growth of 4.2% for the UK economy in 2022, while the economy is now in recession. In 2023, a contraction of 1.4% is anticipated.
• According to the OBR, unemployment will climb from 3.6% today to 4.9% in 2024.
• The OBR anticipates an average inflation rate of 9.1% this year and 7.4% next year.
• Two new fiscal rules: underlying debt must decline as a proportion of gross domestic product by the fifth year of a rolling five-year period, and public sector borrowing must be less than 3 percent of GDP during the same period.
