Chancellor confirms National Insurance cut to 10 per cent
Chancellor Jeremy Hunt has announced a cut to National Insurance, to come into force from the start of the new year.
Delivering the autumn statement in the Commons, Hunt confirmed he would introduce urgent legislation to reduce National Insurance to 10 per cent from 6 January.
He said his government’s plan for the economy is “working” and the range of measures announced in the statement would “reward efforts and work”.
But Labour’s Rachel Reeves argued that “working people are still worse off” under the Conservatives.
And the SNP said measures to support struggling households were “too little too late”.
This autumn statement is likely to be the last before the next general election.
Hunt has been under pressure to cut taxes from the right of his party, but has held off on such action previously arguing he would only do so when it was economically responsible.
However, he said the UK economy had “outperformed expectations” in the last month and therefore he had “double the headroom” than had been forecast previously.
In addition to the National Insurance cut, the chancellor confirmed the abolition of class 2 NI for self-employed people and the continuation of “full expensing” for businesses.
The National Living Wage will be increased to £11.44 an hour, Universal Credit will increase by 6.7 per cent, while the state pension will increase by 8.5 per cent.
Hunt also said the government would bring in the “biggest set of welfare reforms in a decade” by altering work capability assessments and more support for those seeking work.
He said that if, after 18 months of support, a person had not found a job they would be offered a mandatory work placement. Refusal to take up such a placement for six months will result in cases being closed and benefits being stopped.
Shadow chancellor Reeves argued that under this statement, “taxes will be higher at the next election than they were at the last”.
She added: “The cost of living crisis has hit us harder because Tory mismanagement has left us so exposed. Eleven million UK households don’t have enough savings to cover three weeks of living expenses. Working families have been skating on thin ice for too long.”
Other measures in the autumn statement include:
- £7m for organisations like the Holocaust Educational Trust to tackle anti-semitism;
- freezing alcohol duty until 1 August 2024;
- £4.5bn investment in manufacturing, including for the green and life science sectors;
- £80m for levelling-up partnerships in Scotland.
SNP economy spokesperson Drew Hendry said: “With UK energy bills, mortgages, rents and food prices soaring, the very limited measures in the chancellor's statement won't touch the sides for most households… The UK economy is trapped in a vicious cycle of poor growth, stagnant wages and rising poverty as a result of Brexit and Tory cuts – but neither Rishi Sunak nor Keir Starmer will change course from the damaging Westminster policies that got the UK into this mess.”