- 110 new measures were announced as part of his 'Statement for growth'
- National Insurance has been cut by 2p and Class 2 has been abolished for self-employed workers
Chancellor Jeremy Hunt announced 110 new measures during Wednesday’s Autumn Statement as part of his ‘Statement for growth’. He told MPs that “the Conservatives will reject big government, high spending and high tax because we know that leads to less growth, not more”.
He announced a 2p cut in the rate of employee National Insurance and abolished Class 2 National Insurance contributions for almost 2mn self-employed workers.
This Autumn Statement struck a more optimistic tone than last year’s austere affair. However the Office for Budget Responsibility, the fiscal watchdog, actually released more downbeat forecasts to accompany the announcement. HT
Read more about how the Autumn Statement affects the economy here
Workers given right to choose their own pension
Chancellor Jeremy Hunt has announced a consultation to reform workplace pensions, with the aim of allowing workers to set up a “pot for life” with a pension fund of their choice.
Pension contributions are currently paid into the workplace pension scheme chosen by the employer, so employees who change jobs often end up with multiple small pots in different schemes, especially in the early part of their careers. Hunt is now consulting on giving people the legal right to ask their employers to pay contributions in a pension pot of their choice, so they can keep the same pot throughout their career. VC
Government backs state pension triple lock
The government has confirmed that the state pension will increase by 8.5 per cent in April 2024 in line with the pension ‘triple lock’, despite pressure for it to adjust the figures and use a lower rate.
The triple lock mandates that the state pension rises every year in line with whichever is the highest between average annual earnings growth from May to July, inflation in the year to September or 2.5 per cent.
The earnings growth figure was the highest of the three this year, at 8.5 per cent. However, there had been speculation the government would tweak the numbers and use a lower 'smoothed' 7.8 per cent wage growth figure, which excludes bonuses, or scrap the earnings element of the triple lock altogether. VC
Hunt announces changes to Isa rules
Rules on Individual Savings Accounts (Isas) will be changed to allow savers to pay into multiple Isas of the same type in one year and to facilitate transfers between providers.
In today’s Autumn Statement, Chancellor Jeremy Hunt announced the new rules but disappointed savers who had anticipated a complete overhaul, something that was on the cards earlier this autumn.
From April 2024, people will be able to subscribe to multiple Isas of the same type every year and to partially transfer Isa funds between different providers. This should make it easier for savers to switch providers if they are unsatisfied with their service. VC
Hunt pledges reforms to planning system
Chancellor Jeremy Hunt has pledged to allow councils to recover planning application costs in exchange for approval in a given timeframe. If they fail, companies would be refunded automatically. "A prompt service or your money back just as would be the case in the private sector," he said.
Hunt said the measure would help unlock more planning approvals, and it came alongside a promise to consult on a new "permitted development right", allowing developers to split homes into two flats without planning permission.
Former Crest Nicholson (CRST) chief executive Tom Nicholson supported the reforms in principle, but said he would need to see “more ‘meat in the sandwich' to verify if it's genuine reform”.
Meanwhile, Tim Bannister, Rightmove’s (RMV) property expert, expressed his disappointment that there were no demand-side incentives to boost the housing market in the statement, following the end of Help to Buy earlier in the year, describing it as a “missed opportunity”. ML
Markets react to Autumn Statement
On the companies front, there was a variety of activity. Hunt's announcement of a halt in alcohol duty until August 1 next year prompted a 1.2 per cent rise in Diageo’s (DGE) shares. Marston (MARS), the British pub operator, mirrored this trend.
Conversely, NatWest (NWG) shares declined by 0.7 per cent after the Chancellor announced a potential retail share offering. The government still holds a 39 per cent stake in NatWest.
BT (BT.A) experienced a notable 5.5 per cent increase after Mr. Hunt's confirmation of permanent business tax breaks, such as the super deduction tax break on business investment, valued at £11bn a year, propelled BT's stock. The company stands to benefit significantly due to its substantial investments in enhancing Britain's high-speed internet infrastructure.
On the downside, PensionBee (PBEE) saw a decrease of almost 7 per cent before halving those losses. The pension reforms allowing individuals to consolidate their pensions when changing jobs contributed to this decline.
Gilt markets liked what they saw. Yields fell across the curve. However this ultimately was not much of a change on the day. The UK Debt Management Office did announce a small cut to its bond sales for this year: the latest plan for 2023/24 called for sales of £237.3bn, compared with £237.8bn initially. AA
