2022 Autumn Statement

Facing into the storm

The new Chancellor Jeremey Hunt took to his feet in the Commons to deliver what he described as “a plan to tackle the cost of living crisis”. He set out three key priorities – stability, growth and public services.

Mr Hunt was careful not to talk about tax rises but did say that those with more would have to contribute more. The changes announced will lead to a substantial tax increase with the threshold for when the highest earners start paying the top rate of tax being brought down from £150,000 to £125,140. That means those earning £150,000 or more will pay just over £1,200 more a year. Freezes to income tax thresholds until 2028 will mean millions of people will also be paying more tax on their incomes over time.

Mr Hunt also announced the dividends allowance would be cut from £2,000 a year to £1000 in 2023 and then £500 the following year.

There was better news for those on lower incomes. He announced an increase in the National Living Wage from the current level of £9.50 an hour to £10.41 for over-23s
He also announced the triple-lock on pensions would remain with a 10% rise in the state pension. The government’s review on the pension age will be published in early 2023. Benefits and tax credits will also increase by 10.1%, in line with September’s inflation figure.

He also announced there will be targeted support with the cost of living for those on low incomes, disability benefits and pensioners. Additional payments of £900 will be paid to those on means-tested benefits, £300 to pensioner households and £150 to people on disability benefits.

The energy industry will be hit with an expanded windfall tax of 35% up from 25% from 1 January until March 2028.

There was a significant change for motorists too with the announcement that electric vehicles will no longer be exempt from Vehicle Excise Duty from April 2025 to make the motoring tax system “fairer”.

He also reversed his predecessor’s stamp duty cut from 2025. So while currently you pay no stamp duty until property costs £250,000 (£400,000 for first time buyers) the rates will revert back to £125,000 (and £300,000 for first time buyers)

Under these plans the Treasury said that the highest-earners will contribute more because it’s fair those with the broadest shoulders should help the most vulnerable.

Labour have condemned the Autumn Statement saying the country is not recovering but is heading into recession.

But Mr Hunt pledged that today’s measures would lead to a shallower recession and lower inflation the Commons that his plans will tackle the cost of living crisis, “rebuild our economy” and significantly reduce borrowing over coming years.