Jeremy Hunt Unveils 'Biggest Package Of Tax Cuts Since 1980s'

But the overall tax burden is set to hit a new post-war high - and economic growth will be weaker than previously forecast.
Jeremy Hunt leaves 11 Downing Street ahead of the Autumn Statement.
Jeremy Hunt leaves 11 Downing Street ahead of the Autumn Statement.
Anadolu via Getty Images

Jeremy Hunt today claimed to have unveiled “the biggest package of tax cuts since the 1980s” as he declared the British economy has “turned a corner”.

In a major surprise, the chancellor announced he was slashing the rate of National Insurance by 2% in a move that will benefit 27 million workers and means someone earning £35,000 will save over £450 a year.

Significantly, the change will be introduced from January 6 next year rather than April - increasing speculation about a May general election.

Hunt also used the autumn statement to unveil a package of business tax cuts in a bid to boost productivity.

A tax break worth £250,000 for every £1 million a company invests - known as “full expensing” - will be made permanent, the chancellor announced.

The chancellor described it as “the largest business tax cut in modern British history” and said it would boost business investment by around £3 billion a year.

However, in a blow for Hunt and Rishi Sunak, the Office for Budget Responsibility downgraded its forecasts for economic growth over the next few years.

The OBR also said that while taxes will fall this year, they will rise “to a post-war high” by 2028-29 due to more workers being dragged into paying the higher rate.

Hunt told MPs: “This autumn statement for growth will attract £20bn more business investment a year in the next decade, bring tens of thousands more people into work and support our fastest growing industries.

“In a package which leaves borrowing lower, debt lower and keeps inflation falling, we are delivering the biggest business tax cut in modern British history, the largest ever cut to employee and self-employed National Insurance and the biggest package of tax cuts to be implemented since the 1980s.

“An autumn statement for a country that has turned a corner. An autumn statement for growth.”

However, the small print of the statement painted a far less rosy picture for for the chancellor.

Although the OBR upgraded its economic growth forecast for this year from -0.2% to 0.6%, it said GDP will only grow by 0.7% in 2024 instead of the 1.8% it forecast in March, and by just 1.4% in 2025, instead of 2.5%.

In further gloomy news for the government, the OBR also said that inflation will fall to 2.8% next year, but that is well up on the 0.9% they forecast in March.

Hunt also confirmed that the National Living Wage will rise by nearly 10% next year to £11.44 an hour.

But he also unveiled a crackdown on benefits which could see claimants have their payments stopped if they refuse to accept a job.


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