Government officials have told the media that the Autumn Statement was ‘basically completed’ over the weekend and almost everything is now agreed between Chancellor Jeremy Hunt and Prime Minister Rishi Sunak.
The weekend saw significant speculation about the contents of the fiscal statement as 22 November draws ever closer. Here we round up the weekend’s Autumn Statement news.
Won’t fuel inflation
In a television interview, the Chancellor said that he would not take any measures in the Autumn Statement to fuel inflation. This is hardly surprising as last week’s announcement that October’s inflation figure had dropped to 4.6% was a rare bit of good news for the government.
‘The one thing we won’t do is any kind of tax cut that fuels inflation. We’ve done all this hard work. We’re not going to throw that away,’ Mr Hunt said.
However, the Chancellor added: ‘Everything is on the table in an Autumn Statement.’
Speculation that the Chancellor would cut inheritance tax (IHT) and some business taxes was rife over the weekend.
This was fuelled by the latest economic forecast from the Office for Budget Responsibility (OBR) - a body which assesses the health of the UK's finances and is independent of the government. This is expected to give the Chancellor significant fiscal headroom. Economists are estimating that Mr Hunt could have an extra £10 billion to spend.
The government has already announced a £4.5 billion pot to boost British manufacturing. The investment is being spread across several areas including the Made Smarter Adoption programme and the Green Industries Growth Accelerator. In addition, more details on the Advanced Manufacturing Plan are expected this week.
Businesses in the automotive, aerospace, life sciences and clean energy sectors will be among firms in line to receive government funds where ‘the UK is or could be world-leading’, Mr Hunt said.
Back to Work plan
The government has also announced a Back to Work plan, which provides 'employment focused support' designed to help people move into work.
Announced as part of the Autumn Statement, the Treasury said getting more people into work and ensuring work pays remain 'key priorities' for the government.
The new Back to Work plan builds on the £7 billion employment package announced at the 2023 Spring Budget and expands the employment support and treatment available for those seeking work.
The plan also includes expanding key health and employment programmes.
The Chancellor is expected to extend some tax breaks available to UK freeports by five years in the Autumn Statement.
The government has authorised the creation of eight of the sites in England, two in Scotland and two in Wales, all of which are in various stages of development. It also hopes to set up a freeport in Northern Ireland when power sharing at Stormont is restored.
Under the government’s original policy, most of the tax breaks available would only be available for companies up until either April or September 2026.
In order to help companies set up operations inside the freeports, Mr Hunt will extend some of the tax breaks from 2026 to 2031, according to government officials.
The Chancellor is set to announce a major overhaul of individual savings accounts (ISAs) as he looks to boost use of the tax-free savings vehicles to provide capital for UK firms.
The Chancellor in his Autumn Statement on Wednesday will outline an ‘ISA reform road map’. This will include plans to alter rules around fractional shares and long-term asset funds, a type of open-ended fund invested in illiquid assets including private equity and real estate.
Mr Hunt will also announce proposals to launch an online portal enabling savers to pay into multiple accounts each year.
The Autumn Statement
Whatever happens on 22 November, Mercia’s tax experts will be watching and will provide detailed analysis of the government’s fiscal announcements. Keep your clients up to date with our range of digital products.