Autumn Statement: Energy price cap increase dampens Hunt’s ‘tax cuts’ as he denies pre-election handout – live

Chancellor insists public spending freeze in autumn statement will not result in worse public services

Autumn budget 2023: Key announcements from Jeremy Hunt's statement

Energy bills will rise again in a blow to millions, as analysts warned that the tax cuts unveiled in chancellor Jeremy Hunt’s autumn statement would be “dwarfed” by other tax rises already in motion.

Experts lamented that ministers had “missed the opportunity” to announce extra support for households in desperate need this winter, as Ofgem announced its energy price cap would rise by 5 per cent in January, adding £94 to a typical gas and electricity bill.

Mr Hunt defended tax cuts that will leave public services – already buckling after years of austerity – facing what economists called an “implausible” spending squeeze.

The Institute for Fiscal Studies warned Britain was on course for drastic public-sector cuts even more “painful” than the austerity of the 2010s.

The Resolution Foundation said the national insurance cuts were “dwarfed by tax rises already under way”, set to make households an average of £1,400 poorer. The think-tank also criticised the chancellor’s public spending freeze, asking: “What's the plan here? Abolish the criminal justice system and public transport maybe?”

Key Points

• Jeremy Hunt ‘missed opportunity’ to ease energy bill increases
• Cuts even more painful than austerity era on way, say economists
• Households ‘will be £1,200 worse off' despite cuts in autumn statement
• ‘What’s the plan here?’: Hunt’s tax plans ‘risk completely implausible’ public spending cuts
• Economy to grow just 0.6% as OBR downgrades forecasts
• Recap: Taxes cut, pensions triple locked and benefits at threat in autumn statement

[22 November 2023 16:29 · Jane Dalton]

How Hunt - one of UK’s richest politicians - made his money

Prior to his career in parliament, Mr Hunt attended Charterhouse School in Godalming and received a first-class degree in philosophy, politics and economics at Oxford before working as an English teacher in Japan.

In 1991, aged 25, he co-founded a business with a childhood friend:

[22 November 2023 16:45 · Matt Mathers]

IFS: Hunt tax cuts are ‘not a recipe for good management of the public finances’

Jeremy Hunt’s tax cuts amid uncertain times are “not a recipe for good management of the public finances”, one of the UK’s top think tanks has warned, Archie Mitchell reports.

The influential Institute for Fiscal Studies (IFS) said “the prudent thing to do” would have been to use the financial headroom to “build a larger buffer into his plans”. Instead Mr Hunt relied on the government’s “poorly designed and loose fiscal target” to pay for tax cuts which will hamstring whoever is chancellor after the next election, it said.

“That might make for good politics. It does not make for good policymaking,” IFS director Paul Johnson added.

In a scathing verdict on Mr Hunt’s autumn statement, Mr Johnson said: “There’s a material risk that those plans prove undeliverable and today’s tax cuts will not prove to be sustainable.”

And he noted that despite the significant cut to national insurance, “these tax cuts won’t be enough to prevent this from being the biggest tax raising parliament in modern times”.

[22 November 2023 17:00 · Jane Dalton]

What autumn statement means for benefits

From universal credit to pensions and a fresh crackdown on benefit claimants who do not find work within 18 months, here are the effects on state benefits:

[22 November 2023 17:17 · Jane Dalton]

Rishi Sunak’s £200bn stealth tax bombshell revealed

While Jeremy Hunt boasted about giving out the biggest tax cut since the 1980s, the official spending watchdog revealed Rishi Sunak would take in £200bn in a stealth tax bombshell.

The prime minister’s decision to freeze the threshold at which people pay national insurance and other taxes will cost £200bn in the next six years, the Office for Budget Responsibility said.

In a budget which many said would give with one hand while taking with the other, the cost of “personal tax threshold measures” was laid bare.

Freezing tax thresholds drags more people into paying tax, and means those that do are pulled into higher tax bands as their pay rises with inflation.

This financial year the decision to freeze tax thresholds will cost £12.4bn, with that figure climbing to £44.6bn by 2028-29.

[22 November 2023 17:31 · Jane Dalton]

Money-saving expert Martin Lewis’s snap verdict

Money-saving expert Martin Lewis said the cut to National Insurance goes some way to cover the cost of freezing tax thresholds but lamented the absence of Lifetime ISA reform:

[22 November 2023 17:50 · Jane Dalton]

Budget winners and losers

[22 November 2023 18:10 · Jane Dalton]

Watch: Rachel Reeves quotes The Independent in clash with Hunt

[22 November 2023 18:42 · Jane Dalton]

Hunt leaves ‘ticking time bomb of austerity' for next government

Stephanie Flanders, head of economics at Bloomberg, said the predicted spending cuts in future years would leave a “ticking time bomb” for whoever is in charge in the next parliament.

The Office for Budgetary Responsibility (OBR) said Jeremy Hunt had spent “virtually all” of the £27bn-worth of “fiscal headroom” – mainly on the £21bn cost of tax cuts, plus some more on the cost of welfare reforms.

It also warned that the windfall spent on tax cuts was “mainly a reflection of a £19.1bn erosion in the real value of departmental spending”.

The OBR said “a 2.3 per cent-a-year real-terms fall in day-to-day spending” would “present challenges” – polite speak for painful spending cuts.

Ian Mulheirn, an economist at the Resolution Foundation think tank, said it showed the “completely implausible implications” of the tax cuts.

[22 November 2023 18:44 · Jane Dalton]

IFS: Tax cuts ‘not recipe for good public finances management’

Jeremy Hunt’s tax cuts amid uncertain times are “not a recipe for good management of the public finances”, one of the UK’s top think tanks has warned.

The influential Institute for Fiscal Studies (IFS) said “the prudent thing to do” would have been to use the financial headroom to “build a larger buffer into his plans”. Instead Mr Hunt relied on the government’s “poorly designed and loose fiscal target” to pay for tax cuts that will hamstring whoever is chancellor after the next election, it said.

“That might make for good politics. It does not make for good policymaking,” IFS director Paul Johnson added.

In a scathing verdict on Mr Hunt’s autumn statement, Mr Johnson said: “There’s a material risk that those plans prove undeliverable and today’s tax cuts will not prove to be sustainable.”

And he noted that despite the significant cut to national insurance, “these tax cuts won’t be enough to prevent this from being the biggest tax-raising parliament in modern times”.

[22 November 2023 19:00 · Jane Dalton]

House prices forecast to fall by thousands of pounds next year

House prices are set to fall by thousands of pounds next year as interest rates remain high, forecasters have said: