Autumn Statement 2023 - Anticipated key announcements

Anticipation is building for the Chancellor’s Autumn statement, particularly with a general election on the horizon and a backdrop of the fight against inflation and rising interest rates, this year’s statement is set to be an interesting one.

In a speech to the Conservative Party conference, The Chancellor Jeremy Hunt guaranteed that the national living wage will rise to at least £11 an hour. 

As inflation has eroded the purchasing power of individuals over the last year, immense pressure has been put on policymakers to address wage levels, especially the minimum wage. The current rates from April 2023 are set out below: 

The proposed increase is expected to consider inflation, as well as other factors like the cost of living and average wage growth. This meets a 2019 manifesto commitment to increase pay for the lowest paid to two-thirds of median earnings. 

There are numerous benefits to a raise in the minimum wage such as:

• Improved living standards: It can help low-income workers maintain a decent standard of living.
• Income equality: Ensures that the benefits of economic growth are more evenly distributed. 
• Economic stimulus: Increasing the minimum wage can boost consumer spending, which is a crucial driver of economic growth. This can stimulate demand for goods and services. 

However, along with the benefits, there are potential challenges and concerns to consider:

• Impact on small businesses: Some small businesses may struggle to absorb the increased labour costs associated with a higher minimum wage, potentially leading to job cuts or price increases. Therefore, businesses may have to look at price increases and/or reducing overheads to help absorb the extra money they will be paying out on wages.
• Inflationary pressures: Some critics argue that raising the minimum wage could contribute to higher inflation if manufacturers and suppliers pass on their increased labour costs to their customers with price increases.

There are various other anticipated points: 

• Tax cuts: The Chancellor has said that tax cuts will be ‘virtually impossible’. Although being under pressure from some Tory MPs to cut taxes, the chances of this are very slim and this will be impossible until the country’s high levels of debt are brought down, and the country is under control. 
• Tougher benefits rules: Hunt has promised tougher sanctions for benefits claimants who refuse to take active steps to find work. “Around 100,000 people are leaving the labour force every year for a life on benefits.” Hunt has stated it is a fundamental matter of fairness to ensure that people who were not looking for work received lower benefits.  
• ISA savings shake-up: The current system of ISA savings accounts could be reformed to make it simpler and easier for customers to invest their money, it is hoped that these changes would boost investment into companies listed on the London Stock Exchange. 

The Autumn Statement promises to be a pivotal moment in the UK’s economic recovery journey and it is clear that its outcomes will have extensive implications for individuals, businesses, and the broader economy.

We will be holding a Rapid Review webinar of all the Chancellor’s Autumn Statement on the same day, and sending out a detailed summary the following day, to ensure that you stay informed of all the changes announced. To secure your place on our free webinar please click here. 

If you have any queries or concerns about these proposed changes then you should speak to your advisers who can help you navigate the changes and help you to ensure you are compliant with them. For more information on how we could help you and your business, contact us at info@oldfieldadvisory.com or call 02476673160.

Please note: This article is provided for information only and was correct as at time of writing (12/10/23). Any lists and details provided above are not exhaustive and are not intended to be full and complete guidance.  No action should be taken without consulting detailed legislation or seeking independent professional advice. Therefore no responsibility for loss occasioned by any person acting or refraining from action as a result of the material contained in this article can be accepted.