Jeremy Hunt’s statement focused on growth in the economy and business investment with cuts to National Insurance and a freeze on business rates. This is on the back of the previously announced rise to National Minimum Wage to £11.44, a 9.1% increase, which was also extended to 21 and 22 year olds.

National Insurance

For the self-employed, Class 2 National Insurance will be abolished, saving around £192 per year, coming in next April. Class 4 NI also receives a 1% deduction.

For employees (including umbrella employees), National Insurance on earnings between £12,571 and £50,271 is going to be cut from 12% to 10%. For example, someone earning £35,000 will see a saving of £450 per year. Unusually, this is coming in from January 6th 2024.

Pensions

Pensions will be increased by 8.5% in line with the triple-lock. This will be effective as of April 2024 and will be worth around £900 per year. This is one of the largest state pension increases ever.

Employees are now able to take their pension pot with them when they change employers instead of being forced into whichever one a company uses for their employees. This would result in employees having several different pensions; now people can stick with their choice of pension provider.

Businesses

Mr Hunt has committed to cut red tape when it comes to business investments from SMEs to R&D businesses.

Planning applications are to be reformed including refunds to fees if they are unsuccessful or if it’s not processed in a timely manner.

£4.5 billion has been earmarked to be split between aerospace, medical research and green industries and also in newly announced “investment zones” in East and West Midlands and Greater Manchester. This is on top of the investment zones announced previously. Furthermore £500 million will be put towards AI “innovation centres” in a bid to make a Britain a “powerhouse” in artificial intelligence.

“Full expensing” has been made a permanent benefit meaning that businesses can claim back 25p per £1 spent on IT equipment and machinery in corporation tax.

The late payment terms, which affects how soon payment is received in a supply chain, was also addressed, relating to all new public sector tenders over £5 million. These would have to demonstrate payments terms within 55 days, falling to 45 days in April 25 and within 30 over the coming years.

Business rate relief of 75% has been extended for another year for small businesses in pubs and hospitality.

Benefits

Although benefits will see a 6.7% rise from next April, Mr Hunt announced a crackdown on unemployment benefit claimants. Anyone still unemployed after 18 months from the beginning of their claim could see themselves forced into work experience placements, with refusal resulting in their case being closed and benefits cut off.

Other points

Tobacco duty has been increased by 10%, however alcohol duty has been frozen.

The chancellor announced 110 points with only the above being showcased in Parliament. In the coming days we will share more insights across those points.