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110 Reasons to Grow
Traditionally the Autumn Statement marks a time of reflection, of checking in on the state of the economy, and perhaps taking the time to set reviews and processes in motion which will bear fruit in the Budget the following spring.
This year the Chancellor of the Exchequer, Jeremy Hunt, gave us something more; a 110-point plan for boosting business growth and promoting productivity. That he felt able to do so was due to the economy having fared better than was previously predicted by the Office for Budget Responsibility (OBR) in the spring of 2023. Headlines included:
- inflation having fallen to 4.6% and predicted to fall further throughout 2024,
- borrowing in 2023 some £0.7billion lower than expected,
- debt as a percentage of GDP having fallen,
- and the economy performing stronger than expected with a new OBR prediction of 0.6% growth in 2023 and 0.7% in 2024.
The measures announced were wide-ranging, from the extending of investment zones and freeports, to an extension of the small business rates discount scheme. Along the way, tweaks to planning, the energy grid, foreign direct investment support and making the capital allowance “expensing” scheme permanent, were just some of the measures designed to boost productivity and business investment. R&D tax reform should also help to cut red tape for those businesses which are looking to invest in technology. Taken together the measures are expected to boost business investment as a percentage of GDP from an average of 9.5% over the last ten years to 10.5%.
Measures more likely to directly affect individuals include:
- Abolition of the self-employed class 2 national insurance charge with class 4 national insurance rates for the same group being cut from 9% to 8% with effect from April 2024.
- Employee national insurance rates to be cut from 12% to 10% from January 2024.
- Confirmation of the triple lock boost for pensioners leading to a rise of 8.5% from April 2024 with working age benefits to rise by 6.7% from the same date. The national living wage will also rise in April by 9.8% giving a 21 year old a new rate of £11.44.
- Alcohol duty to be frozen until 1 August 2024.
- A study is to be undertaken into the feasibility of individuals being able to ask new employers to pay into an existing pension when individuals change jobs.
Schools, the NHS and adult social care will also receive additional funding, primarily with a view to provide extra help for those who need it most.