On Thursday 17 November, the Chancellor presented the Autumn Statement outlining three priorities - stability, growth and public services.
While we await further details, below we have outlined a summary of the key announcements; however as always, we advise checking the GOV.UK website for the most up-to-date information and advice.
OBR forecasts: The Office for Budget Responsibility (OBR) predicts inflation to be 9.1% this year, falling to 7.4% next year.
Recession: The UK is in recession. GDP is forecast to grow by 4.2% this year then fall by 1.4% in 2023, before rising again by 1.3%, 2.6% and 2.7% in the following three years.
Borrowing: Government borrowing in the current financial year will be 7.1% of GDP. It forecasts that it will fall to 5.5% next year and 2.4% by 2028.
Minimum wage rise: Around two million low-paid workers will receive an increase in the National Living Wage, which will rise from £9.50 to £10.42 for staff over the age of 23 - a rise of £1,600 per year for those on lowest wages.
The rate for 21-22 year olds increase by 10.9% to £10.18 an hour; while for 18-20 year olds it will rise by 9.7% to £7.49 an hour.
Apprentices and those aged 17-18 will be paid at least £5.28 an hour, an increase of 9.7%.
Employer National Insurance: This has been frozen until 2028, meaning firms will pay 13.8% in contributions on all employees who earn more than £9,100 a year - a move that will net around £5billion a year.
Windfall tax: 35% levy on oil and gas company profits, a decision set to raise around £45 billion over five years. Electricity generators will also receive a temporary 45% levy, with the measures set to raise £14billion for the Treasury.
Income tax thresholds frozen: The additional rate threshold will be reduced from £150,000 to £125,140, increasing taxes for those on higher incomes. The £12,570 Income Tax and National Insurance thresholds will remain in place until April 2028.
National Insurance thresholds frozen: As above - these remain at their current levels for a further two years until 2028.
Council tax rises: Local authorities will be permitted to raise council tax by 4.99% - currently this is capped at 2.99% without a referendum.
Capital Gains Tax: The threshold for paying tax on sales of shares and second homes will be reduced to £6,000 from £12,300.
Dividend taxes: Those who profit from the sale of shares will pay more with the dividend tax rate rising by 1.25% and the threshold dropping to £1,000 from £2,000.
Inheritance tax: The freeze on rates will be extended until 2027/28, meaning a rate of 40% will be paid on estates worth more than £325,000 for an individual and £650,000 for a couple.
Stamp duty: Stamp duty cuts announced in the mini-budget will remain in place - but only until March 31 2025. The OBR expects housing activity to slow over the next two years.
Energy Bills and Cost of Living
Energy Price Guarantee: Energy bills will rise to £3,000 a year for the typical household from April - up from £2,500 now.
Cost of living payments: Additional cost-of-living payments for the "most vulnerable", with £900 for those on benefits, £300 for pensioners and £150 for those on a disability benefit.
Rent controls: The government will cap increases in social rents to a maximum of 7% in 2023/24.
Benefits and State Pension
State pension: This will rise by 10.1% meaning the average pensioner will see a £18.70 per week uplift.
Universal Credit and other benefits: Similarly, these are set to increase in-line with inflation. While there will be variation depending on circumstances, it means a single person over the age of 25 on Universal Credit will see payments rise by nearly £34 a month.
Benefit fraud crackdown: DWP will be given £280 million to tackle fraud and error.
Managed migration: The government will move back the managed transition of people on ESA to Universal Credit to 2028 - a four year delay on top of many delays already.
Public Spending Cuts
Public spending: Public spending is forecast to grow "slower than the economy". The government said it will protect the increases in departmental budgets already set out in cash terms, before growing resource spending at 1% a year in real terms over the next three years.
Public sector pay: No announcement, but we were told: "The government is seeking recommendations from Pay Review Bodies where applicable for pay awards for 2023-24."
NHS spending: Extra funding for social care of up to £2.8bn next year and £4.7bn the year after. NHS budget to be raised by £3.3bn in each of the next three years.
Defence spending: The defence budget will be maintained at at least 2% of GDP, but there was no commitment to the previously-pledged 3% by 2030.
NHS and Social Care
Adult social care: £1bn of extra funding next year and an extra £1.7bn the year after.
Care home costs: The planned cap on costs has been delayed; the government previously pledged an £86,000 lifetime cap on how much anyone would need to pay for care, due to be implemented from October 2023 - this has been delayed for two years.
NHS: Patricia Hewitt has been asked to advice on how local NHS bodies operate with a view to making efficiency savings. However the NHS budget is set to increase in each of the next two years to £3.3billion.
Transport and Infrastructure
Tax on electric cars: Currently drivers do not have to pay tax on electric cars, but this will change from 2025-26.
HS2 and Northern Powerhouse Rail: HS2 will be delivered to Manchester, and Northern Powerhouse would go ahead, as well as the East-West rail project. More than £600bn pledged over capital investment across the next five years.
Schools funding: A further £2.3 billion per year to be spent on schools over the next two years.
Reduction in emissions: Maintained commitment to a 68% reduction in emissions by 2030.
Energy efficiency: An extra £6 billion of investment in energy efficiency from 2025 - saving £28 billion from the national energy bill or £450 from the average household bill.
Sizewell C: New nuclear plant at Sizewell C to go ahead as planned.
For further information, please visit GOV.UK website.
UKHospitality Chief Executive Kate Nicholls said:
“The Chancellor painted a grim picture of what we’re facing as a nation and Britain’s hospitality businesses are already in the midst of severe economic turmoil.
“Survival this winter is the priority for venues across the country and there is the very real possibility that a significant proportion of our sector will not survive the winter. It was crucial that the Government addressed this today.
“I’m pleased that the Chancellor has listened to the vast majority of UKHospitality’s proposals on business rates, covering a freeze in the multiplier, extended reliefs and no downward transition. This means those seeing their valuations decrease will see the benefit in their bills immediately, at the same time as increases are capped.
“However, it remains the case that the current system is outdated and not fit-for-purpose. The Government made a manifesto commitment of root and branch review and it’s essential that this delivered as soon as possible.
“It was also encouraging that the Chancellor confirmed that energy support will continue post-April for the most vulnerable sectors, of which hospitality has already been recognised.
“What we failed to hear today from the Chancellor was any plan for economic growth, despite him recognising its importance. Businesses create jobs, deliver higher wages and contribute millions in tax revenues but without a serious plan from the Government, margins continue to be squeezed without a path forward to growth.
“There is nothing to give firms confidence, let alone invest, and we need to see an urgent plan for economic growth and how business will be at the centre of that. UKHospitality stands ready to work with Government to develop such a plan and on the essential package of energy support post-April.”