Chancellor sets out plan to stabilise economy

The government has re-iterated its commitment to HS2, Sizewell C and Northern Powerhouse Rail in an autumn statement which saw widespread tax rises and spending cuts and revealed that the UK is now in recession.

Chancellor Jeremy Hunt said his statement had prioritised “stability, growth and public services” but said he had to take “difficult decisions” to tackle inflation.

Blaming “unprecedented global headwinds” including covid-19 and a “made in Russia energy crisis”, the chancellor outlined plans to save £55bn over the coming years, divided nearly equally between tax rises and spending cuts.

Revealing the Office for Budget Responsibility’s assessment that gross domestic product will fall by 1.3% next year, the chancellor announced the following measures:

  • Contracts to progress the Sizewell C nuclear plant will be signed in the coming weeks
  • More than £600bn of capital investment over the next five years, including HS2, Northern Powerhouse Rail, East-West Rail and the New Hospitals Programme, will be safeguarded
  • The energy industry will be targeted with an expanded windfall tax of 35%, up from 25%,raising an extra £14bn
  • Stamp duty cuts, announced by the Truss government in September, will go ahead as planned but will now be time-limited to 31 March 2025. The threshold will increase from £150,000 to £250,000 and from £300,000 to £425,000 for first time buyers. The maximum purchase price for which First Time Buyers’ Relief can be claimed was increased from £500,000 to £625,000
  • Investment zones - geographical areas with reduced planning regulation and lower taxes to boost growth announced by the Truss government- will remain but be ‘refocused’ and “centred on universities in left behind areas to help build clusters for..growth”
  • The government will implement a £13.6bn package of business rate support
  • Social housing rent increases will be limited to 7% next year, rather than 5% as originally suggested by the government
  • Increases in department spending already set out will be maintained but departments will have to make efficiencies to compensate for inflation
  • The government will no longer focus Liz Truss’ set list of infrastructure projects to accelerate but will ”seek to accelerate delivery of projects across its infrastructure portfolio
  • The second round of the Levelling Up Fund will invest a minimum of £1.7bn in local projects across the country
  • Suffolk will get an elected mayor, with devolution deals for Norfolk, Cornwall and the North-east in advanced stages
  • From April next year, the National Living Wage will be increased from £9.50 an hour for over-23s to £10.42