Autumn statement: Jeremy Hunt announces sweeping tax cuts for firms and workers

Jeremy Hunt has announced sweeping tax cuts for businesses and workers in an “autumn statement for growth”, with a larger than expected cut in national insurance from January.

Setting out the government’s agenda for the economy before the next general election, the chancellor said a stronger outlook for the public finances meant he could cut national insurance from 12% to 10% and offer firms what he described as the largest business tax cut in modern British history.

In a speech focused on growing the economy, Hunt argued the government was moving to the next stage of its economic plan after declaring victory on Rishi Sunak’s primary target to halve inflation this year.

The chancellor said the “largest ever cut” to employee national insurance would save the average worker £450 a year.

He also confirmed a rise in benefits and the state pension but said he would penalise those who took the taxpayer for granted with a crackdown on the long-term unemployed.

Acknowledging speculation that he was considering lower increases to save money ahead of the autumn statement, Hunt said he would take a “compassionate” approach amid the cost of living crisis by increasing total support to more than £104bn.

“Our choice is not big government high spending, high tax, because we know that leads to less growth not more. Instead, we reduce debt, cut taxes and reward work,” he said.

Publishing updated forecasts from the Office for Budget Responsibility (OBR), the chancellor said the government was moving to “get the economy back on track” after the Covid pandemic and energy crisis. However, while the economy will avoid a recession this year – with a revision to forecasts for a drop of 0.2%, to growth of 0.6% – the OBR slashed its estimates for 2024 from growth of 1.8% to only 0.7%.

Announcing 110 measures to “unlock investment” in Britain, the chancellor said measures taken in the autumn statement would support growth in business spending in the economy by £20bn a year – including steps to speed up planning approvals, subsidies for manufacturing and new investment zones.

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Putting forward plans to help grow the economy, Hunt said he would reform and simplify taxes for the self-employed by abolishing class 2 national insurance for almost 2 million people. Small firms will also receive a £4.3bn tax break through a freeze on business rates.

More details soon ...