FINANCE
LOCAL REACTION TO THE AUTUMN STATEMENT
On Wednesday 22nd November the Chancellor of the Exchequer , Jeremy Hunt , presented his 2023 Autumn Statement .
He said that the government has taken difficult decisions to put the economy back on track and halve inflation but “ the work is not done ”. The Chancellor said his priorities are to avoid big government spending and high tax , and instead cut taxes and “ reward hard work ”.
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 .
• “ Full expensing ” Capital Allowance made permanent – Having been introduced temporarily in the 2023 Spring Budget , this policy allows companies to deduct spending on new machinery and equipment from profits .
• The National Living Wage will increase by more than one pound to £ 11.44 ( from £ 10.42 ) per hour from 1 April 2024 .
• • State pension confirmed to rise by 8.5 % from April 2024 , worth almost an extra £ 900 a year .
• The Investment Zones programme and freeport tax reliefs will be extended from 5 years to 10 years , and a new £ 150 million Investment Opportunity Fund will support Investment Zones and Freeports to secure specific business investment opportunities .
• Three new advanced manufacturing Investment Zones will be established in Greater Manchester , East Midlands , and West Midlands – together generating £ 3.4 billion of private investment and creating 65,000 high-quality jobs within the next decade .
Here ’ s a round-up of local reaction :
Matt Griffith , Director of Policy at Business West , said , “ We are naturally disappointed that our region was not more visible in the budget . We have not been chosen as one of the government ’ s investment zones – the second time we have lost out on this flagship government economic policy .
“ Our region is struggling to be recognised at a national level despite the excellent credentials we have in life sciences , clean energy , aerospace and automotive . The risk is that low visibility and level of political ambition starts to undermine our key economic assets and investor sentiment .”
“ There is a pressing need for our region to start raising its profile and making the case for investment support to help transform the South West .”
Ben Rhodes , CBI ( Confederation of British Industry ), South West Director , commented , “ With tough decisions to be made , the Chancellor was right to prioritise ‘ game-changing ’ interventions that will fire the economy .
“ While the move on National Insurance will give hardpressed households some much needed breathing room , making full capital expensing a permanent feature of the tax system can be transformational for accelerating growth and improving living standards in the long-term .
“ Helping firms to unleash pent-up investment is critical to getting momentum into the economy . Making full expensing permanent will give firms the stability they need to press on with decisions on investment whilst keeping the UK at the top table internationally for investment incentives .”
Andy Chamberlain , Director of Policy at IPSE , added , “ We ’ re pleased the Chancellor has recognised the vital contribution of the self-employed sector to the UK economy , backing this with a cut to Class 4 National Insurance .
“ The abolition of Class 2 NI is a welcome simplification and will particularly benefit the self-employed on low incomes .
“ Whilst it ’ s a welcome relief to feel there is some support on offer from government , the self-employed sector is still reeling from gaping gaps in support during the pandemic and the implementation of the off-payroll working rules , which have had a devastating impact on hundreds of thousands .”
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