All the big announcements from today's Autumn budget
Everything you need to know from Jeremy Hunt's first budget statement
Last updated 17th Nov 2022
Here's everything you need to know about what Jeremy Hunt talked about in his Autumn budget statement, from tax rises to stamp duty, NHS funding to energy bills.
What was today's budget announcement about?
Jeremy Hunt promised to “tackle the cost-of-living crisis” and “rebuild our economy” as he set out plans for tax rises and spending cuts.
The Chancellor said there would be a “shallower downturn” as a result of his measures but the Office for Budget Responsibility (OBR) believed the economy was “now in recession”.
The Chancellor said his priorities for this statement were stability, growth and public services, here are the big announcements:
What tax rises were in the Autumn Statement?
The main announcement on tax was that the personal rate of tax was changed for higher earners, with the threshold for those paying the 45p rate of tax being reduced from £150,000 to £125,140 although different rates apply in Scotland.
This means more people will be eligible to pay the highest rate of tax.
Mr Hunt said: “Those earning £150,000 or more will pay just over £1,200 more a year.”
Were energy bills mentioned in today's statement?
Rising energy bills were one of the key factors for inflation rising to a 41-year high yesterday and Mr Hunt today said he wants the UK to become 'energy independent'.
Jeremy Hunt firstly announced that a new nuclear power station will go ahead at Sizewell C to help be less reliant on energy coming from other countries, notably Russia.
On energy bills, the Chancellor went on to say he was going to continue the energy price guarantee scheme until April.
He also said that after April next year the energy price guarantee scheme will be in place but will increase from £2,500 for the average household to £3,000 for 12 months after April.
Those numbers are based on the amount of energy an average household will use, if you use more than that then your bill will be more. The price guarantee caps the unit price you pay and the day rate, not the overall cost of your bill.
Windfall taxes on energy companies
Mr Hunt has increased the windfall tax on oil and gas giants from 25% to 35% and imposed a 45% levy on electricity generators from January 1st until March 2028.
The Chancellor said those measures would raise an estimated £14 billion next year.
Jeremy Hunt told the Commons: “I have no objection to windfall taxes if they are genuinely about windfall profits caused by unexpected increases in energy prices.
Electric cars will now be taxed
From April 2025 electric vehicles will no longer be exempt from Vehicle Excise Duty to make the motoring tax system “fairer” according to Mr Hunt.
He said: “Because the OBR (Office for Budget Responsibility) forecast half of all new vehicles will be electric by 2025, to make our motoring tax system fairer I’ve decided that from then, electric vehicles will no longer be exempt from vehicle excise duty.”
Stamp duty cuts to be continued
The chancellor confirmed stamp duty cuts announced in the mini-budget will remain in place until March 31st 2025.
The Chancellor told the Commons: “The OBR expects housing activity to slow over the next two years, so the stamp duty cuts announced in the mini-budget will remain in place but only until March 31st 2025.
“After that, I will sunset the measure, creating an incentive to support the housing market and all the jobs associated with it by boosting transactions during the period the economy most needs it.”
More money promised for Education
The Chancellor said he will invest an extra £2.3 billion per year in schools over the next two years.
Chancellor also increases money for the NHS and social care
Mr Hunt said he will increase the NHS budget by an extra £3.3 billion in each of the next two years.
He also announced an increase in funding for the social care sector of up to £2.8bn next year and £4.7bn the following year.
National Living Wage increased
The national living wage will be increased to £10.42 from April 2023, the Chancellor announced.
Jeremy Hunt told the Commons: “Today, I am accepting the recommendation of the Low Pay Commission to increase it next year by 9.7%.
“That means, from April 2023, the hourly rate will be £10.42 which represents an annual pay rise worth over £1,600 to a full time worker.
“It is expected to benefit over two million of the lowest paid workers in the country and keeps us on track for our target to reach two-thirds of median earnings by 2024.
“And it is the largest cash increase in the UK’s national living wage ever.”
What about pensions?
The Chancellor said he will increase state pensions in line with inflation in April, announcing the “biggest ever cash increase in the state pension”.
Benefits to rise in line with inflation
Mr Hunt said he will increase working age and disability benefits in line with inflation, with a rise of 10.1%, costing £11 billion.
Defence budget remains at 2% of GDP
Mr Hunt said he will maintain the defence budget at at least 2% of GDP.
The Chancellor told the Commons he and the Prime Minister “both recognise the need to increase defence spending”, adding: “But before we make that commitment it is necessary to revise and update the Integrated Review, written as it was before the Ukraine invasion.
“I have asked for that vital work to be completed ahead of the next Budget and today confirm we will continue to maintain the defence budget at least 2% of GDP to be consistent with our Nato commitment.”
Reaction to the Budget
The Conservatives are responsible for 12 weeks of chaos, but also 12 years of economic failure, Labour's Rachel Reeves said.
The shadow chancellor told MPs: “What people will be asking themselves at the next election is this – are me and my family better off with a Conservative Government? And the answer is no.”
“Yes!” Conservative backbenchers shouted back.
Ms Reeves continued: “The mess we are in is the result of 12 weeks of Conservative chaos, but also 12 years of Conservative economic failure.
“Growth dismal, investment down, wages squeezed, public services crumbling.”
The cost of living crisis in pictures
Interest rates and inflation go up
Inflation rose by 8.8% in the 12 months to January 2023, down from 9.2% in December 2022. With interest rates also rising to 4%, those saving money will earn more interest on their finances, whilst those paying mortgages would pay more interest to the bank.
Energy bills
The price of energy went up incredibly as the cost of living crisis hit, with the gas price spike caused largely by the war in Ukraine. The price cap - which is set by an independent regulator to help offset costs onto customers - was set to rise to £3,549 for an average home in October but a price freeze from the government restricted the typical bill to £2,500. That's still an increase of 27% from the previous energy cap and as it's a cap on unit cost, the more energy you use the higher your bill will be.
Food prices
The cost of a weekly shop also has gone up as a result of the cost of living crisis. As a result of the war in Ukraine, a number of products including cooking oils and wheat have been disrupted. This means that several products are now considerably more expensive, driving bills up for customers.
Prices at the pumps
The average cost of petrol has also rose to unprecedented levels. Supply lines for petrol have been thrown into doubt as a result of the war in Ukraine, as Russia is a large export partner for gas, oil and fuel. In April 2022, the average price for a litre of petrol on the forecourt was 160.2p, whilst a litre of diesel would cost 170.5p. By late June 2022 the price had risen to an average of 190.9p for a litre of unleaded and 198.9p for a litre of diesel. In March 2023 the price wass on average of 147.03 in petrol and 167.04 in diesel.
Average cost of filling up a car with petrol hits £100
On 9th June 2022, the average cost of filling up a car with petrol hit £100 for the first time ever. Diesel had already hit that milestone. It comes as the cost of fuel hit a record high of one pound eighty a litre. The 2p rise was the biggest daily jump in 17 years. Prices have dropped by at least 20p per litre since the high point.