Autumn Statement 2023: A summary

The Chancellor of the Exchequer, Jeremy Hunt, presented his 2023 Autumn Statement to Parliament on 22 November and published supporting documents. Once the Chancellor finished his statement, the Office for Budget Responsibility (OBR) published updated forecasts for the UK’s economic and fiscal outlook.

As the Library briefing Autumn Statement 2023: Background briefing explains, UK economic growth has been weak since early 2022. High inflation and rising interest rates have constricted household budgets and consumer and business spending.

The OBR forecasts that the economy will grow more slowly than it had forecast in March 2023. Inflation is now forecast to be more persistent and domestically driven. Higher domestically driven inflation improves the outlook for the public finances, boosting tax revenues by more than it raises public spending.

The Chancellor used much of the improvement in the public finances to fund business and personal tax cuts.

The Autumn Statement speech

In his speech, the Chancellor said he was delivering an “Autumn Statement for growth”. He said the OBR’s forecast shows that the Prime Minister’s priorities for the economy are being met. The economic priorities are to halve inflation, grow the economy and reduce debt.

The Chancellor said the Autumn Statement set out “growth measures to back British business” and “measures to make work pay”.

Tax and spending announcements

The Chancellor announced policies on:

• National insurance – including cutting the rate of Class 1 NICs paid by employees from 12% to 10% from 6 January 2024 and cutting the main rate of Class 4 NICs, paid by the self-employed, from 9% to 8% from 6 April 2024.
• The “full expensing” capital allowance, which allows companies to deduct spending on new machinery and equipment from profits. This was made permanent, having been introduced temporarily in the 2023 Spring Budget.
• Business rates – including extending the current 75% business rates relief for eligible retail, hospitality and leisure properties for one year in 2024/25 and freezing the small business rates multiplier for business in 2024/25.
• Freeports – extending the duration of tax reliefs available from five to ten years.
• Investment zones – extending the programme from five to ten years.
• Alcohol duties – freezes alcohol duties until 1 August 2024 and delays the annual uprating decision to the 2024 Spring Budget.
• A package of welfare reforms, including a strengthening of work search requirements for some, designed to increase employment.
• Local housing allowance – rates will be increased to equal the 30th percentile of an area’s market rents in 2024/25. Rates will then be maintained in cash terms in subsequent years.
• Planning – including plans for accelerated planning decision dates for major developments in England to be guaranteed in exchange for a fee.
• National living wage – this will be raised from £10.42 per hour to £11.44 from April 2024. It will apply to those aged 21 or over, after an extension of the rate to 21 and 22 year olds.

The OBR forecasts

The OBR forecasts that the economy will grow more slowly than it forecast in March 2023. Inflation is now forecast to be more persistent and domestically driven.

Higher domestically driven inflation improves the outlook for the public finances, boosting tax revenues by more than it raises public spending.

The Chancellor’s targets for government debt and borrowing, are often referred to as the “fiscal targets”, are both being met in the OBR’s forecast.

Further information summarising the OBR’s economic and fiscal forecasts are provided in the full Library briefing.

For a quick explainer on what the Autumn Statement is, see our recent Insight: What is the Autumn Statement?

You can find all of the Library’s research on the 2023 Autumn Statement in one place.