UK Chancellor Jeremy Hunt has set out “an Autumn Statement for growth” as he sought to boost productivity and business investment against a backdrop of falling inflation.
“Our plan for the British economy is working, but the work is not done,” the Chancellor told the House of Commons on 22 November.
The Chancellor announced new economic measures, including a rise in the National Living Wage and tax cuts focused on productivity and “making work pay”.
The main National Insurance rate paid on earnings between £12,570 and £50,268 was cut to 10% and will take effect from 6 January.
The National Living Wage has been extended to include 21 and 22-year-olds and will go up by £1.02 to £11.44 per hour from April.
Hunt told the Commons the many measures laid out in his statement would boost business investment by £20bn a year, declaring his measures “the biggest-ever boost for business investment in modern times, a decisive step towards closing the productivity gap with other major economies and the most effective way we can raise wages and living standards for every family in the country.”
The Chancellor revealed three new investment zones focused on advanced manufacturing to be based in the West Midlands, East Midlands and Greater Manchester. In addition, there will be a life sciences investment zone for West Yorkshire and a second Welsh investment zone.
“Together they are expected to catalyse £3bn of investment and 65,000 jobs”, he said.
The Chancellor revealed £500m will be invested over two years to fund further innovation centres “to make us an AI powerhouse”.
Analysts noted that businesses in particular will welcome the permanency of the full expensing allowance, R&D relief and extension to cuts to business rates within the hospitality sector where there will be a freezing of alcohol duty until August 2024.
Simon Richards, finance director of industry association beam, welcomed the Chancellor extending the 75% discount on business rates up to £110,000 discount for retail, hospitality and leisure businesses for a further 12 months. “The saving that many of our members have been making has been crucial as they recover from the pandemic and they still need it for at least another year,” he said.
“The freeze on alcohol duty will also be valuable but the increase in the National Living Wage to £11.44 per hour and including 21 and 22-year-olds for the first time will add to costs.
“What was disappointing was that there was no support for investing in people. We think control of apprenticeship funding should be given to the employer instead of the training provider as this would be a great help in developing apprentices.”
