The UK Chancellor, Jeremy Hunt, today announced the UK Government’s Autumn Statement, their budget for the year ahead. Making the full expensing programme permanent, along with improvements to the National Grid and reforms to the planning system in England had been key asks of the British Chambers network, and are part of a package of measures aimed at boosting business investment by £20bn in a decade’s time.

A cut to National Insurance from 12% to 10% was another headline announcement. As a result of decisions at the Autumn Statement, the Scottish Government will be receiving £545 million through Barnett consequentials. Other announcements include:

OBR fiscal and economic forecasts

• Inflation is expected to fall to 2.8% by the end of 2024, and then finally reach the Bank of England’s 2% target by the end of 2025
• Whilst the economy is now 1.8% bigger than pre-pandemic, forecasts for growth have been downgraded – the OBR now predicts that the economy will grow by 0.7% in 2024 and 1.4% in 2025, down from the March forecast of 1.8% and 2.5%.
• Growth of 1.9%, 2%, and 1.7% is then expected each year from 2026-2028

Tax, pay and business support

• National Insurance will be cut from 12% to 10% from 6^th January 2024
• The National Insurance relief for employers of eligible veterans will be extended for a further year
• Class 2 National Insurance – paid by self-employed people earning more than £12,570 – will be abolished from April 2024
• Class 4 National Insurance for the self-employed – paid on profits between £12,570 and £50,270 – will be cut from 9% to 8% from April
• The National Living Wage will be going up to £11.44 an hour from April and will apply to anyone over 21
• The full expensing policy, which allows companies to deduct investment in IT equipment, plant or in full from taxable profits, will be made permanent – a key ask of the British Chamber network
• The 75% discount on non-domestic rates for retail, hospitality and leisure businesses will be extended for another year, as will the freeze on the small business multiplier on rates – it should be noted that Non-Domestic Rates are devolved, so these changes will not automatically apply in Scotland. Instead we will need to wait and see how the Scottish Government respond in their budget on the 19^th
• To help tackle late payments, from April 2024 any company bidding for large UK Government contracts will need to demonstrate they pay their invoices within 55 days, reducing progressively to 30 days
• All alcohol duty will be frozen until 1^st August 2024
• A new, six-year Climate Change Agreement scheme is being introduced, giving reductions in the Climate Change Levy to those who meet agreed energy efficiency or decarbonisation targets between 2025 and 2030

Infrastructure, investment and innovation

• On the National Grid, the Government have promised to accept the recommendations of the Winser Review, aiming to cut delays to access to the grid by 90%
• Up to £10,000 off of electric bills over 10 years will be offered to those living close to new electricity transmission infrastructure
• Reforms to planning have been a major ask from British Chambers of Commerce (BCC), and measures have been announced to allow local authorities in England to recover the full costs of major planning applications in return for meeting strict timelines, helping to speed up the system
• Over £500m was promised to increase housing supply
• £50m will be spent over the next two years to pilot ways to increase apprentices in engineering and other key growth sectors in England
• To increase Foreign Direct Investment, the Government will accept all headline recommendations from the Harrington Review, including offering a concierge service for large international investors
• The Mansion House reforms to pension funds will be taken forward, including measures to consolidate the industry, and consulting on moves to allow new employees to require their workplace pensions to be paid into pre-existing pension pots
• £500m will be invested over the next two years to fund further innovation centres focused on AI
• Launching a call for evidence on making Film and High End TV Tax credits more attractive
• £4.5bn of support to 2030 to attract investment into strategic manufacturing sectors including aerospace and life sciences
• The financial incentives for Investment Zones and tax reliefs for Freeports will be extended from 5 to 10 years
• £80m was also promised for new Levelling Up partnerships in Scotland

Over the coming days and weeks we will engage with members, policy makers and the wider Chamber network to analyse the full impact of the announcement on our members and the wider Edinburgh economy.  As ever, if you have any thoughts, views or comments you’d like to share with us, or any insights into how you believe these measures impact your business, please contact policy@edinburghchamber.co.uk