Earlier today, the Chancellor delivered his Autumn Statement.
Like many countries around the world, the UK is facing profound economic challenges. The Covid pandemic cost our country billions and Putin’s illegal invasion of Ukraine has sent inflation soaring. Inflation is the enemy of prosperity, bringing with it higher bills, higher mortgage rates and higher unemployment.
Today’s Autumn Statement set out the Government’s response to these global headwinds. I welcome the Chancellor’s focus on the three priorities for our economy: stability, growth and public services.
Some of the key commitments made by the Chancellor today include:
- Extending the Energy Price Guarantee until April 2024, with an extra £12 billion in additional support for the most vulnerable households.
- Protecting the pensions Triple Lock and uprating benefits in line with inflation.
- Increasing funding for our NHS and schools by an extra £11 billion over the next two years.
- Boosting the National Living Wage from April, meaning an average pay rise of £1,600 for millions of workers.
In order to stabilise the economy and meet these commitments, the Chancellor has balanced certain tax rises with reductions in spending. All taxpayers will be asked to contribute, but those with more will be asked to contribute more. The most profitable businesses will also be asked to meet their share of the burden.
Specific measures include:
- Reducing the threshold for the 45p rate of tax from £150,000 to £125,140.
- Freezing Income Tax, Inheritance Tax and National Insurance thresholds for a further two years.
- Fixing the threshold for employer National Insurance contributions, while retaining the Employment Allowance to ensure that 40% of all businesses pay no NICS at all.
- Increasing and extending the Energy Profits Levy on oil and gas companies, as well as electricity producers.
It is right that we are honest about the challenges we face and fair in our solutions. The Chancellor has made tough decisions, but I believe he has struck the right balance. I am reassured by the OBR’s forecast that this package will reduce peak inflation and unemployment, and set us on a sustainable path for growth.