Last roll of the dice? A closer look at the Autumn Statement 2023

The Chancellor delivered the 2023 Autumn Statement this week, 22 November, following a damaging month for the Conservative Party. During this chaotic period, we saw Suella Braverman sacked, and the Government’s flagship policy to send immigrants to Rwanda deemed unlawful by the Supreme Court. In the reshuffle following the home secretary’s sacking, and in a surprising move, former PM David Cameron was brought back into government as foreign secretary, perhaps revealing the prime minister’s view of the candidates available to him in the party’s cohort of MPs. The week prior to the Autumn Statement was capped off with fresh polling which shows that the Labour Party leads the Conservatives by 17 points.

Pledge to half inflation

Despite all this, Jeremy Hunt approached the despatch box with an air of confidence. His second Autumn Statement comes amid recent figures which show that, due to cost-of-living wage increases of an average 7.7%, there are more people than ever in the upper tax bracket. His confidence was likely spurred on by the Bank of England’s confirmation on 15 November that inflation has fallen to 4.6%, down from 10.8% in January 2023, delivering on the PM’s pledge to half inflation. In addition, the Office of Budgetary Responsibility (OBR) confirmed that Mr Hunt had £25 billion of headroom in the UK’s finances ahead of this week’s statement.

Personal and business tax cuts

The chancellor used his statement to outline 110 measures designed to encourage growth, with his decision to cut National Insurance from 12% to 10% for 27 million workers grabbing the lion’s share of coverage in the media. However, this cut has been viewed sceptically by some, who describe it as “crowd-pleasing” designed to warm up the voters ahead of a looming general election in 2024.

Alongside Mr Hunt’s statement were forecasts from the OBR that the amount of tax being raised will reach the highest level in 70 years by 2028 – a fact which has invited criticism from the Labour Party. The chancellor also raised universal credit and other state benefits by 6.7%, in line with September's inflation figure, and confirmed the government’s intention to deliver, in full, the triple lock pension, increasing the state pension by 8.5% to £221.20 per week. In another move, it was announced that businesses would receive a significant tax cut of £11bn a year through permanent full expensing.

Aside from these headline-grabbing announcements, the chancellor’s statement focussed largely on measures that reduce debt, cut taxes, and reward work. This includes divisive measures to remove benefits and step up monitoring of welfare recipients to bring more people into work, putting them at risk of losing free medicines and legal aid if they are found not to be seeking employment.

Last chance saloon?

Labour’s shadow chancellor Rachel Reeves was quick to criticise Mr Hunt’s statement, putting her party forward as the only option for sound financial decision making and offering an alternative vision with a Labour government.

With a looming general election, the PM and chancellor have shrewdly kept their powder dry for a pre-election spring budget, which really is the Conservative’s last-chance saloon to coax back their soft voters from Labour, however, some would argue too little, too late.

The election is now well and truly on the agenda of all the UK political parties, with the latest media reports suggesting that Conservative MPs have been told to “expect November but prepare for May”.

The Conservatives have this week given us a glimpse at what five more years in power could look like through last-minute tax cuts and a vision of economic growth, and while Labour have been election ready since last year’s Autumn Statement, campaigning will kick off in earnest in the new year.

Businesses have an opportunity to be heard

The stage is set for constituencies across Scotland to be key battlegrounds in next year’s election, with Labour seeking to capitalise on a weakened SNP and pave the way to Downing Street. The coming months are a crucial period for businesses looking to be heard by the political parties as they develop their election manifestos with a proactive public affairs strategy at the heart of any successful engagement.

Stay tuned for the Budget summary coming next month!

We’re here to help you navigate the political landscape and deliver outcomes that work for your business or organisation. Our in-depth knowledge and strong network mean we can help shape and deliver effective public affairs strategies that can build relationships and influence policy. Get in touch with our public affairs team to have an informal and confidential chat.