Sector Reaction to Jeremy Hunt’s Autumn Statement 2022 – UK now in Recession
Chancellor Jeremy Hunt gave his Autumn Statement today (17th November 2022), confirming that the UK is now in recession, calling it a ‘Recession made in Russia’ with the cost of living and interest rates causing a downturn in the economy.
As growth slows and unemployment rises, with employment at 3.6% and predicted to be 4.9% in 2024. Hunt said that 70,000 jobs are predicted to be saved by decisions in his statement today, aiming for a shallower downturn.
- Chancellor unveils a plan for stability, growth, and public services.
- To protect the most vulnerable the Chancellor unveiled £26 billion of support for the cost of living including continued energy support, as well as 10.1% rises in benefits and the State Pension and the largest ever cash increase in the National Living Wage.
- Necessary and fair tax changes will raise around £25 billion, including an increase in the Energy Profits Levy and a new tax on the extraordinary profits of electricity generators.
- Decisions on spending set to save £30 billion whilst NHS and Social Care get access to £8 billion and schools get an additional £2.3billion reflecting people’s priorities.
- To deliver prosperity, he’s also committed to infrastructure projects including Sizewell C and Northern Powerhouse Rail, along with protecting the £20billion R&D budget
Rise in Economic Inactivity to be looked into by DWP at PM’s request
Sharp increase in economically inactive people. PM asked DWP to look into barriers to people to get into, or back into work. 600,000 more people are going to be asked to meet a Work Coach to increase hours or earnings.
Pro Education is Pro Growth
In schools, we have risen nine Global places in Maths and Reading in the past seven years.
Sir Michael Barber to lead Skills Reform Programme
The Chancellor highlights that the current Education Secretary (Gillian Keegan) was an Apprentice and the importance of skills. He has announced that Sir Michael Barber will lead the Skills Reform Programme, as Jeremy Hunt wants to know will our school leavers have the same skills opportunities as Japan or Switzerland.
You Cannot Borrow your way to growth
The Chancellor talked about a high-wage and high-skill economy of the future with People, Capital and Ideas.
Innovation and Britain to be the next World’s next Silicon Valley
Three of the top ten universities Globally at in Britain. Jeremy Hunt highlights that AI, Quantum Technology and Robotics will be the growth areas in the 21st Century. Hunt said he wants to make the UK a science super power and to transform World Class Innovation into World Class businesses.
The Chancellor has today (Thursday 17th November) announced his Autumn Statement, aiming to restore stability to the economy, protect high-quality public services and build long-term prosperity for the United Kingdom.
Jeremy Hunt outlined a targeted package of support for the most vulnerable, alongside measures to get debt and government borrowing down. The plan he set out is designed to fight inflation in the face of unprecedented global pressures brought about by the pandemic and the war in Ukraine.
The Chancellor of the Exchequer Jeremy Hunt said:
“There is a global energy crisis, a global inflation crisis and a global economic crisis. But today with this plan for stability, growth and public services, we will face into the storm. We do so today with British resilience and British compassion.
“Because of the difficult decisions we take in our plan, we strengthen our public finances, bring down inflation and protect jobs.”
To protect the most vulnerable from the worst of cost-of-living pressures, the Chancellor announced a package of targeted support worth £26 billion, which includes continued support for rising energy bills. More than eight million households on means-tested benefits will receive a cost-of-living payment of £900 in instalments, with £300 to pensioners and £150 for people on disability benefits.
Working age benefits will rise by 10.1%, boosting the finances of millions of the poorest people in the UK, and the Triple Lock will be protected, meaning pensioners will also get a rise in the State Pension and the Pension Credit in line with inflation.
The National Living Wage
The National Living Wage will be increased by 9.7% to £10.42 an hour, giving a full-time worker a pay rise of over £1,600 a year, benefitting 2 million of the lowest paid workers.
The Chancellor also announced a £13.6 billion package of support for business rates payers in England. To protect businesses from rising inflation the multiplier will be frozen in 2023-24 while relief for 230,000 businesses in retail, hospitality and leisure sectors was also increased from 50% to 75% next year.
To help businesses adjust to the revaluation of their properties, which takes effect from April 2023, the Chancellor announced a £1.6 billion Transitional Relief scheme to cap bill increases for those who will see higher bills. This limits bill increases for the smallest properties to 5%. Businesses seeing lower bills as a result of the revaluation will benefit from that decrease in full straight away, as the Chancellor abolished downwards transitional reliefs caps. Small businesses who lose eligibility for either Small Business or Rural Rate Relief as a result of the new property revaluations will see their bill increases capped at £50 a month through a new separate scheme worth over £500 million.
Public Services
To protect high-quality front-line public services, access to funding for the NHS and social care is being increased by up to £8 billion in 2024-25. This will enable the NHS to take action to improve access to urgent and emergency care, get waiting times down, and will mean double the number of people can be released from hospital into care every day from 2024. The schools budget will receive £2.3 billion of additional funding in each of 2023-24 and 2024-25, enabling continued investment in high-quality teaching and tutoring and restoring 2010 levels of per pupil funding in real terms.
All other departments will have their Spending Review settlements to 2024-25 honoured
All other departments will have their Spending Review settlements to 2024-25 honoured in full, with no cash cuts, but will be expected to work more efficiently to live within these and support the government’s mission of fiscal discipline. To improve public finances, from 2025-26 onwards day to day spending will increase more slowly by 1% above inflation, with capital spending maintained at current levels in cash terms. This means departmental spending will still be £90 billion higher in real terms by 2027-28, compared with 2019-20 while £30 billion of public spending will be saved.
Tax Changes
To raise further funds, the Chancellor has introduced tax rises of £25 billion by 2027-28. Based around the principle of fairness, all taxpayers will be asked to contribute but those with the broadest shoulders will be asked to contribute a greater share.
The threshold at which higher earners start to pay the 45p rate will be reduced from £150,000 to £125,140, while Income Tax, Inheritance Tax and National Insurance thresholds will be frozen for a further two years until April 2028. The Dividend Allowance will be reduced from £2,000 to £1,000 next year, and £500 from April 2024 and the Annual Exempt Amount in capital gains tax will be reduced from £12,300 to £6,000 next year and then to £3,000 from April 2024.
The most profitable businesses with the broadest shoulders will also be asked to bear more of the burden. The threshold for employer National Insurance contributions will be fixed until April 2028, but the Employment Allowance will continue to protect 40% of businesses from paying any NICS at all.
Corporation Tax changes
In addition, the government is implementing the reforms developed by the OECD and agreed internationally to ensure multinational corporations pay their fair share of tax. And as confirmed last month, the main rate of Corporation Tax will increase to 25% from April 2023.
To ensure businesses making extraordinary profits as a result of high energy prices also pay their fair share, from 1 January 2023 the Energy Profits Levy on oil and gas companies will increase from 25% to 35%, with the levy remaining in place until the end of March 2028, and a new, temporary 45% levy will be introduced for electricity generators. Together these measures will raise over £55 billion from this year until 2027-28.
To ensure fiscal discipline while providing support for the most vulnerable, the Chancellor has introduced two new fiscal rules, that the UK’s national debt must fall as a share of GDP by the fifth year of a rolling five-year period, and that public sector borrowing in the same year must be below 3% of GDP. Overall, the Autumn Statement improves public finances by £55 billion by 2027-28, and the OBR forecasts both of these rules to be met a year early in 2026-27.
To ensure prosperity in the future, the Chancellor recommitted to the £20 billion R&D budget and made numerous infrastructure commitments. Sizewell C nuclear plant will go ahead, with the EDF contract to be signed at the end of the month, providing reliable, low-carbon power to the equivalent of 6 million homes for over 50 years.
Second round of the Levelling Up Fund
Plans for the second round of the Levelling Up Fund were confirmed, with at least £1.7 billion to be allocated to priority local infrastructure projects around the UK before the end of the year. In further efforts to level up the UK, a new Mayor will be elected in Suffolk as part of a devolution deal agreed with Suffolk County Council, and the government is in advanced discussions on mayoral devolution deals with local authorities in Cornwall, Norfolk and the North East of England.
Devolution Deals
Many of today’s tax and spending decisions apply in Scotland, Wales and Northern Ireland. As a result of decisions that do not apply UK-wide, the Scottish Government will receive around an additional £1.5 billion over 2023-24 and 2024-25, the Welsh Government will receive £1.2 billion and the Northern Ireland Executive will receive £650 million.
Sector Response
Ben Harrison, Director of the Work Foundation at Lancaster University, a leading think tank for improving working lives in the UK:
“It’s welcome that the Chancellor has focused spending on protecting those workers hit hardest by the cost of living crisis through uprating benefits in line with inflation and providing further energy support for those most in need.
“But let’s be clear – inflation is already outstripping Universal Credit payments, and increases in benefit levels won’t arrive for another five months. Those least well off in the UK still face a hugely challenging winter.
“If today’s statement was ultimately about averting a looming fiscal crisis, we also needed to see urgent action on the specific challenges blighting the UK labour market in the weeks and months to come.
“Instead, further reviews on economic inactivity and adult skills were announced, with no specific policy proposals or resources allocated. These reviews must be conducted rapidly, harnessing the wealth of available evidence to provide and in the case of skills, the conclusions of the countless other such reviews already undertaken. Otherwise the Government will fail to deliver on its growth ambitions.
“The Chancellor also announced increased conditionality for hundreds of thousands of those receiving Universal Credit, yet made no commitments to tackle unaffordable childcare, flexible working policies, employment support for those with long term health conditions or employment regulations that too often mean people cannot access more hours or progress to better paid more secure work.
“This will heap more pressure on those already facing the anxiety of low paid and insecure work at a time when the economy is heading into recession, and unemployment is forecast to rise.”
Walid Koudmani, Chief Market Analyst at online investment platform XTB comments:
“Markets were awaiting today’s autumn budget which was meant to shine some light on the government’s plans to tackle rampant inflation while outlining its economic forecasts. As some expected, there were several announcements related to public spending, new policies and the need to deal with rising costs despite the extent of some of the measures mentioned remaining unclear.
The new economic forecast for 2022 was better than the previous one as UK GDP is expected to grow 4.2% this year, up from 3.8% in the previous forecast. The Pound reacted negatively to the announcement with the cable pair pulling back and reaching a low of 1.18 after several days of consolidation.
Meanwhile, some investors were looking closely for a reaction in gilts, which had been rising throughout the first part of the day, particularly after what happened following the announcement of the mini-budget by the Truss government shortly before its fall. At the same time, stocks managed to rebound slightly after facing some difficulty in the first part of the session with the FTSE100 managing to hold around the 7300 handle.
All in all, markets seem to be slightly reassured by today’s statement despite a variety of policies that may prove to be unpopular, but one thing is clear, the economic backdrop remains negative, at least for the short term with the economy in a recession and a variety of new policies which could impact incomes across the board.”
Geoff Barton, General Secretary of the Association of School and College Leaders, said:
“Today’s announcement sounds like positive news for education, and suggests the voice of school leaders, parents and communities about the desperate state of education funding has cut through and been listened to by the government.
“However, the devil tends to be in the detail and we’ll be closely looking at the figures to fully understand the implications. In particular, we’ll be looking at where this leaves special educational needs and post-16 provision which are both facing extraordinarily difficult financial circumstances.
“We recognise this commitment to education is made in the context of a bleak economic picture but to put it into perspective this comes after a decade of real-terms cuts to schools and colleges.
“If we are to ever achieve the long-term national economic stability and growth which everyone wants then we have to develop a plan which has more investment in education at its heart because this is crucial to ensure we have a workforce with the skills and knowledge to deliver that goal.
“It is also important to remember that besides funding, the education sector is facing a teacher recruitment and retention crisis which is largely caused by the erosion of the real value of teachers’ pay since 2010.
“This also has to be addressed as no aspiration or target for education is achievable if you cannot put teachers in front of classes.”
Howard Malloy, SVP, Managing Director Europe, Ensono said:
“The Autumn Budget is, as many expected, a signal of challenging times ahead for businesses across various sectors, as well as their customers. However, all is not lost, and there are always opportunities in a crisis. Times of economic uncertainty can be a defining period for organisations that are willing to double down on their vision while having the courage to remain open to innovation.
“Looking ahead, business leaders will be keen to see the government engage and consult with them as the recession unfolds. Cuts made for their own sake do not work. Instead, they need insights from businesses to identify what is and isn’t working, and shape conducive long-term policies that will help deliver long-term growth.
“Focussing on the tech sector specifically, it was good to see innovation and skills at the heart of the government’s vision for growth, but we need more concrete commitments to tackle the challenges ahead. To echo Helen Dickinson’s comments on the retail sector, it is vital that we see the government treat skills and apprenticeships as an educational priority moving forward. There are jobs to fill within the technology sector, and bolstering alternative educational and career opportunities is an excellent way to fill them while diversifying the workforce
“The most successful businesses in the months ahead will stay connected with the challenges facing their customers. Leaders should be under no illusions that they will lose some customers as budgets get tighter and tighter in the coming months. The key will be delivering for your core, loyal customers, creating solid foundations for your organisation to survive the uncertainty and eventually bounce back from the crisis.”
Paul Whiteman, general secretary of school leaders’ union NAHT, said:
“After so many years of campaigning I am pleased to see that this Chancellor agrees with us when he says that education is key to growth. The work schools do to support and educate children and young people is vital for our country’s future.
“We hope that the additional money announced today will help bring schools back from the cliff edge that they have been teetering on. The devil is always in the detail of these things but the headline announcement is welcome.
“That said, this doesn’t mean schools are completely off the hook. The truly dire cuts we have been warning about will hopefully no longer have to be made, but there are a myriad of pressures still facing schools that will need consideration very soon. Inflationary pressures are still predicted to rise, with support for energy bills only guaranteed until April. The demand for support for special educational needs is huge and core school funding isn’t enough to solve it. And we still have a serious recruitment and retention crisis which this does not solve – this doesn’t go far enough to restore teachers’ and school leaders’ pay after a decade of erosion.
“None-the-less, this brings some relief for schools. We acknowledge that the Statement has recognised the incredibly important work that the education sector does. We now await the full detail behind the announcements – it is crucial that this money is given to schools to spend as they know is most needed.”
Stephen Evans, chief executive of Learning and Work Institute, said:
“The uprating of benefits in line with prices and other support is welcome, though will still leave many people struggling with a large hit in living standards. The Government is right that ultimately the way out of this is to grow the economy, including by investing in employment and skills, but we need concrete action rather than just further reviews.
“The Barber Review of skills reforms is welcome, but we also need to tackle the £1 billion drop in skills budgets in England since 2010. The DWP review of labour market participation is also welcome, but the Government could have widened access to employment support given only one in ten out-of-work disabled and older people get help to find work each year. This fiscal plan needs to be followed by a plan for growth.”
Camellia Chan, CEO and Founder of X-PHY, a Flexxon brand on what this means for the tech industry:
“The Autumn Statement outlined two exciting developments for the tech industry. The Government has announced £2.3 billion extra spending for schools. Nurturing the next generation is crucial for plugging the global technology skills gap. In particular, the cybersecurity industry is suffering, with the World Economic Forum reporting there is a cybersecurity workforce gap of more than 2.72 million. It’s a combination of softer skills, like being forward-thinking, and technical skills, like understanding AI, that’s lacking. Emphasising these in schools is a good first step and spending this money wisely will be crucial.
What’s more, the fact that UK R&D spending will increase to £20 billion a year is welcome news for everyone in tech. With the UK aiming to be the “next Silicon Valley” this will drive competition across the world. Embracing emerging technology such as AI will be a huge part of this, if the UK wants to become a world leader.”
Philip Le Feuvre, Chief Strategy Officer at NCFE, said:
“It’s good to see a renewed focus on skills and education. However, we need to see this move beyond the rhetoric. The cost-of-living crisis will impact disproportionately on disadvantaged groups and more needs to be done to support the poorest and most vulnerable.
“We have seen, from our work supporting initiatives such as the Good for Me Good for FE campaign, there are hundreds of thousands of young people and adults who are in desperate need of basic support and services. Increasingly, schools, colleges and providers are filling the gaps in welfare, recognising that it is impossible to educate someone who is hungry or cold. Failure to address growing poverty will serve to widen the disadvantage gap and see poorer educational outcomes for the most deprived.
“This crisis exacerbates engrained inequalities. People from disadvantaged backgrounds are less able to take on the personal cost of retraining, and unable to afford the unpaid leave they would need to do so. This means they are prevented from acquiring the skills they need to get on in their careers.
“For students and apprentices, the increased cost of living has left many far less able to access learning opportunities, and even see them have no other choice but to opt for full-time employment. Low apprenticeship wages also continue to contribute to the decline in students pursuing a vocational route and creates a circle of inequality, as a lack of training and qualifications often limits their future earning potential.
“There needs to be further investment and the removal of perverse incentives in our system to ensure access to opportunity is truly “levelled-up.”
David Hughes, AoC Chief Executive said:
“The Chancellor is right that being pro-education is being pro-growth. That is why it is so baffling that Jeremy Hunt has not chosen to invest in colleges which are vital drivers of skills for young people entering work, the adult workforce and employers.
“I’m pleased to see some extra school funding – they need it. But the failure to extend that to colleges is devastating. The Education Secretary Gillian Keegan joined me on stage at the AoC annual conference this week and assured college leaders that they are a priority for this government and that she understands skills.
“Those words and her whole speech will ring hollow today for college leaders trying to absorb soaring energy prices and wider inflationary pressures while also finding the cash to pay college staff what they need to live and what they deserve for their hard work.
“Once again, we seem to have a Chancellor who talks a good game on skills, but does not deliver and can only offer a review led by Sir Michael Barber rather than cash.
“My only hope now is that Gillian Keegan and Robert Halfon will be able to use underspends on 16-18 and clawbacks from the adult education budget to invest in colleges rather than using it to plug problems elsewhere. With colleges facing another massive hike in energy bills next April as support ends, we urgently need a long-term strategy to help colleges stay financially viable.”
TUC General Secretary Frances O’Grady said:
“The Conservatives crashed the economy – now they are making working people take the hit.
“This is a recession made in 10 Downing Street, which will put jobs at risk and hit workers’ wages.
“We are all paying the price for the last decade of Tory governments, which decimated growth and living standards. Today’s statement shows it will be two decades until real wages recover.
“Millions of key workers across the public sector – who got us through the pandemic – face years of pay misery as departmental budgets are brutally squeezed.
“The chancellor talked about everyone making sacrifices, but the super-rich have once again been let off the hook – token tweaks to tax will do little to dent their bank balances.
“This is a government more interested in rewarding wealth than work. This is a government choosing to hold down the wages of nurses and teachers while it allows bankers unlimited bonuses.
“This winter, workers will be taking action to defend their jobs and pay. They need a government that is on their side – not one determined to hold down their pay at any cost.”
On the government’s cuts to public services, Frances added:
“Public services face a crisis of soaring inflation, meaning real spending cuts now. There is no more fat to trim.
“The Tories seem hellbent on breaking Britain. Our public services needed a real plan to get Britain back on its feet – the chancellor failed to deliver that today.”
On the rise in the minimum wage and benefits, Frances added:
“Ministers have announced the bare minimum on the national minimum wage and universal credit.
“With bills and living costs soaring, we need to ensure that everyone has enough to get by.
“That means raising the minimum wage to £15 an hour as soon as possible. And it means a significant boost to universal credit and child benefits”
“The basic amount of universal credit will be worth £43 a month less than in 2010.”
NUS Vice President Higher Education, Chloe Field, said:
“This week, thousands of students wrote to their MPs demanding action in today’s Budget. All they asked for was enough support to survive the worst cost-of-living crisis for decades, but once again they have been totally ignored. Our survey of 6,600 students this week found that 42% are living on £100 or less a month. Over a quarter are living on £50 or less.
“Not only have they been ignored, they’ve been frozen out. Students under the age of 23 will continue to struggle by on a lower National Minimum Wage and full-time students won’t benefit from the Universal Credit uplift. The Apprentice Minimum Wage remains at an exploitatively low £5.28 and has not risen with inflation, meaning the worst paid people in Britain just got a real-terms pay cut for the first time.
“The government is making a political choice about who to support and who to leave behind, and they’re choosing to neglect an entire generation of students and young people. For a budget that claims to be prioritising education, it was painfully silent on students and post-16 education. This is an outrage and the government will have to act sooner or later to avert the full-scale student poverty crisis that we’re already experiencing.”
Rebecca McDonald, Chief Economist for the Joseph Rowntree Foundation said:
“It will be a huge relief to families on benefits that they are not facing what would have amounted to a historic cut. In taking this stand, the government has acknowledged that people cannot withstand benefits being eroded any further. However families are facing the worst winter many will remember and can’t wait for April – they need the help now to get through a winter of soaring costs. Even with uprating, rates are at historic lows and households facing difficult times are increasingly not able to cover the essentials.
“Through the course of this year we have seen an increase in the number of families who are falling behind with their bills, unable to afford hot meals and going without the essentials they need. The use of one-off payments to help with the cost of living may mitigate some of the looming disaster, but those who narrowly don’t qualify will be hit hard.
“This winter and beyond is still going to be a frightening obstacle course just to afford the essentials. Rises in council tax, food and rents are all looking insurmountable for large swathes of the population. The welcome increase to the benefit cap from April has recognised the pressures facing people on low incomes but the continuing freeze on LHA will hit private renters very hard.
“The Government must ensure that they help everyone who needs it this winter and plug urgent shortfalls during such historically difficult times.”
FAB chief exec, Tom Bewick said:
‘The announcement of the fourth major government Skills Review in a decade demonstrates that we are still some way off from the certainty and stability the sector wants to see.
‘Sir Michael Barber comes with a long track record in central government and public service reform. He recently conducted a strategic review of policing, where he put reforms to training at the centre of his recommendations.
‘While he is a classic technocrat, believing very much in top-down targets and Whitehall-driven change, he will bring a systems level review mindset to his work, which could be helpful to the sector in terms of arguing for a skills ecosystem approach; built on higher trust, lower regulation, innovation and more flexibility in skills delivery.
‘Sir Michael knows the world of AOs, so we should get a fair hearing.
‘The FAB board will want to consult with our all member National Strategy Forum, in due course, as we look to make a full submission to the latest Skills Review.’
On energy bills and cost of living support, Amy Norman, Senior Researcher said:
“It is welcome news that the Energy Price Guarantee will remain in place for the millions of households who would have otherwise faced much greater hardship. However, the choice to retain a universal system simply highlights the fact that our system of delivering support is both inadequate and inefficient.
“In all, the Chancellor’s plans mean low-income households who are outside the benefits system will see their average energy bill rise from April. Meanwhile, higher-income pensioners will receive additional cash support from taxpayers. This is not just a political choice but an administrative one – the social security system is the only real means we have for providing targeted support with energy, but that system isn’t able to identify all the millions of people who are in need of help with energy bills.
“This raises obvious questions about fairness and the responsible use of public money. As bills are expected to remain above pre-crisis levels for the rest of the decade, a sustainable policy for energy bills needs a more accurate and less wasteful way of delivering help.”
On energy efficiency, Niamh O Regan, SMF Researcher said:
“Energy efficiency is the key to reducing consumption and therefore costs for households and businesses over the long-term. It is welcome that the Government has recognised this and committed additional new funding to insulate the UK’s drafty, leaky buildings.
“But additional support for energy efficiency measures is needed now, not in two years’ time. Energy bills are highest now and will continue to burden households as the weather gets colder. With bills expected to remain high this decade, the sooner efficiency measures are put in place, the sooner households, businesses, and the taxpayer benefit.
“It is concerning that the promised additional £6bn of funding for 2025-2028 is not included in the Treasury’s policy costings published today. This naturally causes us to question how serious this Government is about supporting energy efficiency or whether it will be left to the next government to act.”
On education spending, Aveek Bhattacharya, SMF Research Director, said:
“It is encouraging to see the Government putting education at the heart of its economic strategy, with the Chancellor claiming that ‘being pro-education is being pro-growth’. Yet the sector needs more than warm words to ensure that more people are able to learn, enhance their skills, and fulfil their potential. More money for schools is welcome, but the fear is that post-16 and adult education, so often overlooked, will not get the support they need to help people navigate an increasingly choppy labour market.”
On the triple lock and welfare, James Kirkup, SMF Director, said:
“Maintaining the triple lock is a crude and wasteful way of looking after those pensioners who are in need, because it means handing more and more cash to the large numbers of pensioners who are quite comfortably off.
“Instead of prioritizing cash for all pensioners, a government motivated by fairness and careful use of public money would find ways to target help more accurately on those pensioners who really need it, and avoid more handouts to the 3 million pensioners who live in households with more than £1 million in assets.
“It is right and sensible that welfare payments for working-age people will rise in line with inflation, but waiting until April for that to take effect exposes some of the poorest members of our society to a significant period of further hardship as their costs rise but their incomes don’t.”
On immigration, James Kirkup, SMF director, said:
“The Government’s entire economic plan now relies on a forecast of net immigration at more than 200,000 a year, around 50% higher than the numbers used in previous forecasts. Those migrants will bring skills and commitment to the British economy, supporting growth that benefits everyone. Without these workers, Britain would face bigger tax rises and deeper cuts.
“It’s good that the Treasury has accepted the economic reality that an open approach to immigration brings benefits to the UK, but ministers now need to start an open and honest conversation with voters about that economic reality. Voters with concerns about immigration should be listened to and policy must ensure that they feel they share in the economic benefits that migration brings.”
On VED on electric vehicles, Gideon Salutin, SMF Researcher said:
“Waiving vehicle excise duty on electric vehicles was a helpful way to encourage green transport uptake, although one that has disproportionately benefited wealthier households so far. Yet with EV prices to remain higher than petrol-diesel vehicles until 2030, those incentives will be needed to make them affordable to poorer customers. While other countries such as France and Norway are experimenting with subsidies for electric vehicles, the UK is driving the wrong way.
“By removing the tax difference in VED between polluting cars and electric vehicles, ministers have set back the UK’s climate goals while encouraging lower income drivers to pay for petrol vehicles that will cost more to run in the long-run.”
“This was a missed opportunity for the Chancellor to develop a route map to a more sustainable approach to road travel and tax, culminating in a system of road pricing. This would charge drivers based on the distance they travel and its associated cost to infrastructure, while maintaining a preference for electric vehicles through subsidies and VED. Levying an old tax on a new technology is a policy choice from the past, not the future.”
On the fiscal rules, Aveek Bhattacharya, SMF research director, said:
“This Budget was intended to reassert the Government’s fiscal credibility, but by introducing the 19th and 20th fiscal rules since 2010, it also served to highlight the fragility of our fiscal regime. That inconsistency demonstrates politicians’ tendency to chop and change its targets at will, largely driven by political considerations. This endless carousel of fiscal rules has done little to help the UK economy, and may well have done harm.
“What is needed is an independent fiscal watchdog that can properly hold the government to account, ensuring that fiscal policy responds to objective economic circumstances rather than politicians’’ own moving targets.”
On the new National Living Wage rate, Jake Shepherd, Senior Researcher said:
“In meeting the Low Pay Commission’s recommendations to raise the National Living Wage, the Chancellor has provided a much-needed boost for low-paid workers. The increase will give millions of households additional spending power and help them to absorb living costs – it is an announcement many will be grateful for.
“But the 9.7% uprating is still not in line with inflation. For many workers, the new rate will not be enough to meet the cost of living. Equally, businesses continue to stare down the barrel of growing overhead pressures. For some, particularly smaller films, it will be a tough challenge to rise to the new requirements. Some may even feel the need to pass on their wage bills to the consumer.”
Centre for Social Justice Andy Cook, CEO, said:
“The return of ‘compassion’ to the government’s political lexicon is welcome and overdue. Today the Government answered calls from the Centre for Social Justice and others to uprate the incomes of the poorest households in line with inflation, against fiercely competing pressures on the public purse. For this the Chancellor deserves credit.
“But the cost-of-living crisis is far from over. Many people who are just about managing will, come Christmas, be barely coping if at all. As recession darkens over the UK economy the Government must go further than welfare top-ups and accelerate plans to help people into productive employment.
“That means realising the untapped potential in our communities rather than always reaching for the easy lever of immigration. To reduce the cost to tax-payers of the 23 per cent increase in working-age welfare since Covid, the government should:
- Reverse its decision to delay the migration of claimants onto the Universal Credit system where they face fewer barriers to work
- Make work pay by restoring Work Allowances to their pre-2016 levels, an effective tax cut for over a million of the poorest working households
- Roll out Universal Support to reduce economic inactivity”
Kirstie Donnelly MBE, CEO at City & Guilds Group:
“With the significant skills gap the country is facing, it is disappointing to see the lack of consideration for growth through skills. We ask that the Government works with employers and skills providers to nurture growth and the UK’s position on the world stage. The Future Skills Coalition has set out solutions put forward by Association of Colleges (AoC), Association of Employment and Learning Providers (AELP) and City & Guilds and we welcome the opportunity to work together with Government on realising the vision behind existing policy, whilst bringing more partners to the table for a future that is about opportunity for all.”
Anders la Cour, CEO of Banking Circle Group:
During today’s autumn statement, the Chancellor emphasised the desire to turn Britain into the ‘next Silicon Valley’, made possible by the combination of science and technology innovation with world-leading financial services. In hugely positive news for the tech and FinTech industries, the statement outlined that R&D spending will increase to £20 billion per year by 2024-2025, encouraging long-term growth.
The Chancellor recognised that innovation drives competition – this is true for FinTech, and if the UK takes a lead, Europe and the rest of the world will also step up. This investment will be channelled directly into the safe and fast introduction of new emerging technologies that will come to define the future. It’s certainly an exciting time to be in tech.”
Nick Molho, Executive Director at the Aldersgate Group, said:
“The Chancellor understandably had to focus his attention today on tackling the gap in public finances. Despite this, it was positive to see the renewed commitment to the UK’s 2030 emission reduction goals made ahead of COP26 and to hear the Chancellor’s recognition that doubling down on low carbon power generation and increasing energy efficiency investments are both essential to address the cost of living and energy security crisis. We welcome the commitment for more funding on energy efficiency – although would add that this funding is needed before 2025 – and the creation of an Energy Efficiency Taskforce could also help tackle key policy gaps as long as it is conducted speedily. However, the Government must ensure that the application of vehicle excise duty on electric vehicles from 2025 does not materially make the purchase of these vehicles less attractive, especially given the cut in upfront grants in recent years.”
Nick Molho added:
“To put the UK on a path to lower energy costs and secure energy supplies, and to attract investment and job creation across the country, the Prime Minister and Chancellor should focus over the coming months on accelerating the UK’s transition to net zero emissions, as this will ultimately slash the UK’s vulnerability to volatile fossil fuel prices and unlock much needed private investment. Beyond increasing much needed investment in energy efficiency, the Government must ensure that the necessary grid infrastructure investments are made to deliver the UK’s critical 50GW target of offshore wind by 2030. It should also maintain momentum on rolling out charging infrastructure for electric vehicles, and accelerate the deployment of innovation funding and market signals to drive investment in critical low carbon industries, such as green steel and cement. As part of its Review of Electricity Market Arrangements, the Government should look at reforms such as a Green Power Pool to delink the price of gas from the price of electricity for the most vulnerable households and energy intensive businesses.”
Nick Molho concluded:
“The Chancellor and Prime Minister should also remember that setting and delivering on ambitious targets on nature restoration and resource efficiency is essential to improving the overall resilience of the UK economy to extreme weather events and supply chain disruptions, as well as a major source of investment and job creation. Key priorities in the coming months should include rolling out environmental land management schemes, strengthening and implementing the Environment Act targets and putting forward a new Environmental Improvement Plan.”
Dr Mary Bousted, Joint General Secretary of the National Education Union, said:
“Today’s budget demonstrates the scale of this government’s failure to grow the economy. It presages a terrible period of austerity where the reduction in household disposable income per person will be the biggest on record, taking incomes down to 2013 levels. Teachers know what this means – more children coming to school hungry, cold and unable to learn. It is they who will pay the price of Liz Truss and Kwasi Kwarteng’s disastrous budget which created a £30 billion fiscal black hole – which will be filled by inflicting misery and want on children, young people and their families.
“The government’s announced increase in school funding is clearly a result of both the relaunch last week of the School Cuts campaign with NAHT, ASCL and Parentkind, and of the ballots for fully-funded inflation-proof pay rises.
“Any additional funding for our schools will meet some of their desperate need. However, the money announced by the Chancellor will not be sufficient to prevent schools from having to make cuts. It will still result in schools having less funding than in 2015. Public services have been cut to the bone. For schools and colleges, there are no more efficiency savings to make. We will study closely today’s commitment on education funding and revise the School Cuts site accordingly, so that parents can judge for themselves. But there is no doubt that challenges will remain. Despite some progress this increase is still below inflation forecast by the OBR
“Schools are more than buildings and materials. Teachers and support staff are also homeowners, renters, consumers and parents. The impact of rising costs will be felt by all, and it is simply not sustainable for them to continue with real-terms pay cuts. Teacher pay had already fallen by 20% in real terms between 2010 and 2021, even before the Government’s attempt to impose another hugereal-terms pay cut against inflation in 2022. Support staff pay has fallen by 27% over the same period. The latest teacher pay deal offered by Government is well below inflation. The much-vaunted increases to teacher starting pay are also well below inflation.
“If benefits and pensions are both to rise in line with inflation, then the same should also be true for pay. Today’s announcement on additional money for schools and colleges could go towards funding a pay rise, but it would still not be enough. Yesterday, the Government issued its remit letter to the School Teachers’ Review Body advocating a 2% pay rise for 2023/24, which would represent yet another real-terms cut. This is surely a mixed message that will do nothing to resolve the longstanding recruitment and retention crisis in the profession, and will not avert the pay strike on which our members are currently balloting. The case for a fully funded, above inflation pay rise remains.
“Jeremy Hunt speaks of wanting to continue to raise standards in schools, but his position on food poverty will deter this. Good nutrition and regular meals are what makes the difference for many disadvantaged pupils. It ensures they can fully engage in learning and thrive at school. The Government could have used this moment to help the millions of children facing food poverty by widening the eligibility of free school meals but are apparently happy to see children go hungry whilst at school.
“We welcome plans for skills reform and look forward to discussing them with Government at the earliest opportunity. The current education secretary is a passionate advocate of skills, which is welcome too, but we will need to see how these plans develop and whether they are properly supported and funded.
“As a society, we need to invest in our young people and those who educate them if we are to have a chance of a secure future for our children.”
UK Research and Innovation chief executive Professor Dame Ottoline Leyser said:
“In these challenging times, it is hugely welcome that the Government has chosen to maintain its commitment to increasing investment in research and innovation to £20bn by 2024-25, signalling a clear commitment to backing world-class UK R&D.
“Investing in research and innovation fuels economic growth, affordable public services, and high quality job creation across the UK. It is an investment in our future, tackling urgent priorities in energy security, environmental sustainability, and global health.
“As set out in our five-year strategy, UKRI is building a strong portfolio of investments, supporting the talented people, places, infrastructures and ideas needed to foster world-class research and innovation that provides opportunities and benefits all.”
Natalie Perera, Chief Executive at the Education Policy Institute, said:
“We welcome the Chancellor’s recognition of the importance of education within economic growth and the additional funding for schools. However, the allocation of this funding will be key in addressing challenges faced in particular parts of the country and by vulnerable groups of pupils. At this point, it’s unclear whether today’s increase in funding will be sufficient to resolve the real issues schools are facing, alongside such high levels of inflation.
“While the Chancellor re-iterated the Government’s commitment to reviewing the country’s skills system, we still await further detail of what this might entail. Noticeably, funding commitments for both post-16 and early years settings were not outlined in today’s statement. It’s important that they are not overlooked in the months ahead, with each serving incredibly important phases within a young person’s journey through education and toward the employment market.”
Dr Joe Marshall, Chief Executive of the National Centre for Universities and Business (NCUB), said:
“Honouring the commitment to increase public spending on R&D to £20 billion a year by 2024/25 has demonstrated the Government’s recognition that innovation is vital to drive long-term economic growth.
“The Government had previously planned to increase this further to £22 billion by 2026/27, and we would urge them also to maintain this commitment.
“The changes made to the large business R&D tax relief scheme will help attract and maintain business investment in UK R&D. However, we are concerned that reducing the generosity of the SME scheme will dampen the innovation potential of our emerging research-intensive businesses.
“Refocusing Investment Zones to be based around and draw on the strengths of universities aligns to NCUB’s call for the creation of Innovation Collaboration Zones in our 2020 R&D Taskforce. If we are to encourage growth across the country, bringing our key actors together will be critical.”
CEO of WorldSkills UK Dr Neil Bentley-Gockmann OBE said:
“While the UK faces tough economic times, it is reassuring to hear a plan for growth that puts world-class skills front and centre. Raising standards in training through international benchmarking will not only boost productivity and competitiveness, but also help attract the foreign investment the UK needs to create high wage jobs in growth sectors, like digital, green tech, advanced manufacturing and life sciences.
“Successfully training young people to meet global industry standards is at the core of our work with business and education partners and we look forward to working with Sir Michael Barber to make sure investing in world-class skills for the next generation boosts job opportunities, innovation and growth, putting the UK economy in pole position globally.”
Jon Knott, Head of Customer Insight at Dojo:
“Our customers across the UK tell us that their tax burden has already increased since January, most acutely in hospitality where 71% of businesses have felt the impact of this. In tandem with this change, consumer tastes have shifted significantly due to the pandemic meaning consumers expect much more from physical stores. In fact, we found that 58% of consumers place greater value on experiences – from customer service through to personalisation – when they spend. Supporting small businesses in meeting these changing consumer demands today is more important than ever as they provide a vital source of employment, trade, and growth to our local communities.”
Zoë Billingham, director of IPPR North commented:
“This autumn statement leans on local government to raise council tax, just as people are suffering from the soaring cost of living, double digit inflation and stagnant economic growth. This is the wrong call.
“Progress on agreeing devolution deals around the country is welcome, as is the decision to effectively scrap investment zones, as IPPR North has called for, and replace them with university led clusters.
“Overall, the government is showing an ever-weakening grip on levelling up the country. Investing in and growing our regions is how we grow the UK economy. Northern Powerhouse Rail in skeleton form and levelling up funding eroded by high inflation won’t cut it.”
Marcus Johns, a research fellow at IPPR North who carried out today’s analysis added:
“Resilience has been sucked out of local authorities, disproportionately in the North, over the last twelve years and the impacts of this continue to mount. Local authorities and public services face surging costs and are being pushed to the brink, at a critical time when the economic outlook suggests a deep drop in people’s disposable income and increasing hardship.
“People across the country will pay more for less, and inequalities will widen between places as councils with pricier properties will be able to raise more than other areas – like many in the North – because of the chancellor’s decision not to support councils with surging inflation, but instead to raise council tax limits. Of course, improving local authorities’ flexibility to fund services and investment would generally be positive, but specifically raising council tax limits without any other support means less well-off places will be more exposed to inflation than the wealthiest places”.
Jack Shaw, who also carried out today’s analysis and is based in IPPR, said:
“The autumn statement was an opportunity for the chancellor to put tackling inequality at the centre of the government’s agenda, but the rhetoric hasn’t matched the reality.
“The government’s failure to inflation-proof levelling up funding will have a direct impact on local communities as infrastructure projects will have to be scrapped, delayed or scaled back. That means fewer jobs and less growth as a recession looms”.
Manny Gill, Business Lead UK at Project Management Institute:
‘In light of today’s Autumn Statement, it was encouraging to see additional support granted to the education sector and an admission from the chancellor that “being pro-education is being pro-growth”.
‘We hope the government does not see this latest commitment as a silver bullet for the challenges faced by the British education system and entry-level employers. This must form the catalyst for a systematic transformation of our education system, that will address looming issues that are set to arrive in 2023 and beyond.
‘More specifically – as project management specialists – we are concerned that a talent gap is emerging that will damage British productivity in the coming years. Our data shows that, globally, 25 million new project managers by 2030 – or 2.3 million per year – are required to meet the need for project-based work.
‘The power of projects has been witnessed across the UK this year – from the publishing of Levelling Up plans to the opening of the Elizabeth Line and Battersea Power Station. The net zero transition and digital transformation efforts will require immense attention to progress as planned, as will the next steps for HS2 and Northern Powerhouse Rail projects.
‘Without the talent to execute these projects, the UK will quickly fall behind its international peers. For a nation with ambitions to become a global leader in climate and innovation, this cannot become a reality.
‘To guard against this threat, we need a systematic re-think of how we approach skills development. The leading project skills according to professionals – of relationship building, collaborative leadership, strategic thinking, creative problem solving, and commercial awareness – can all be considered soft skills, or power skills. In the past, these skills may have been considered secondary to more technical skills, but they are the keys to unlocking change.
‘We encourage the government to revitalise the school curriculum to channel the development of power skills in young people, equipping them with the tools needed to support an economic bounce-back for the UK.’
Jon Graham, Chief Executive of Lifetime:
The chancellor’s statement today featured a welcome prioritising of the levelling up and wider skills agendas – as demonstrated by the appointment of Sir Michael Barber as Adviser on Skills Reform, the additional investment in schools and the commitment to funding learning later in life.
At Lifetime, we hope that the planned review by DfE and Sir Barber takes full account of the potential of apprenticeships to address skills gaps across the economy – not just for school leavers but as a way of upskilling employees throughout their careers.
We also welcome the planned increase in the apprentice national minimum wage by 9.7% from April next year – although there is still more to be done to ensure that apprentices can earn a living wage in the wider context of rising prices and inflation.
Food Foundation:
Feed the Future and its vast coalition of supporters are deeply concerned that the Chancellor has ignored the chorus of demands to protect children’s health by expanding Free School Meals in today’s Autumn Budget Statement.
The decision means at least 800,000 schoolchildren living in poverty in England will continue to be denied a hot, nutritious meal at school.
The Chancellor has ignored pleas to extend Free School Meals from education leaders and teachers, health professionals, chefs and caterers, supermarket bosses and MPs from across the political spectrum, including members of the current cabinet.
He has also ignored the voices of affected children, many of whom face the shame and anxiety of going without food at school, as well the support of constituents, with 72% of the public supporting expansion of Free School Meals to children from households on Universal Credit.
It is short-sighted for the Chancellor to ignore a policy intervention which expert analysis has shown will boost the economy by at least £8.9 billion over the next 20 years, improving health, educational attainment and workforce productivity.
Feed the Future is asking campaign supporters to write to their MPs immediately to urge them to demand that the Government reverses its decision and extend Free School Meals immediately.
Jane Hickie, Chief Executive of AELP:
“At the Autumn Statement, the Chancellor argued that to be pro-education was to be pro-growth. Indeed, it seems skills are once again high on the government’s agenda. But without appropriate investment, this is little more than warm words. It’s positive to hear department spend will be honoured until 2024/25- the situation could have been much worse. However, we cannot escape the fact there has been systemic underinvestment in the system for a number of years now. To realise economic growth, the government must invest more in the skills programmes that employers need. Training providers are ready to rise to the challenge, but they will not be able to do so without the right funding and conditions in place.”
Paul Johnson, Director of the IFS, said:
‘Jeremy Hunt’s first fiscal event as Chancellor was a sombre affair. Surging global energy prices have made the UK a poorer country. The result is an OBR forecast that the next two years will see the biggest fall in household incomes in generations.
The swing over a couple of months from Kwasi Kwarteng’s fiscal loosening to a big fiscal tightening is a belated recognition of some harsh fiscal realities. The sharp and sustained increase in how much we now expect to spend on debt interest, in particular, has forced difficult decisions elsewhere. At around £100 billion a year by the end of the forecast period, spending on debt interest will be higher than spending on any single public service bar the NHS.
The Chancellor has felt obliged to relax his fiscal mandate. He is no longer looking to balance the current budget at all, and has pushed out to five years the point at which he says he wants debt to be falling as a fraction of national income. Even so, he has had to announce a package of tax rises and spending cuts amounting to around £50 billion (about 2% of GDP) to meet his new mandate. And even with that, we’re still set to be borrowing 2.4% of GDP, or £69 billion, at the end of the forecast. A return to Osborne-era targets of an overall budget surplus, this is not.
The fiscal tightening is heavily back-loaded, with the vast bulk spending cuts in particular pencilled in for after April 2025. Given the profound uncertainty around the outlook, and the potential economic and social costs of an unnecessarily large up-front fiscal tightening, this is probably the right choice, on balance. But delaying all of the difficult decisions until after the next general election does cast doubt on the credibility of these plans. The tight spending plans post-2025, in particular, may stretch credulity.
The Chancellor will be hoping that his clear commitment to fiscal responsibility and the independence of the Bank of England, his full involvement of the Office for Budget Responsibility, and his less pugilistic approach to economic policy-making will be enough to restore the UK’s tattered international reputation. Let’s hope so.’
NUS Scotland President Ellie Gomersall said:
“Make no mistake, this is a bad budget for students here in Scotland – more austerity, more poverty pay for young people and apprentices, and no action on the climate emergency.
“What future can students hope for when our economy is tanking and our planet burning?
“In the Scottish budget next month, those with the broadest shoulders must be asked to contribute more to protect the most vulnerable through this crisis. Students must not be forgotten: we need action now on poverty, homelessness, travel costs and mental health.
“The UK budget was silent on student poverty but the Scottish Government now has an opportunity to rectify this error and deliver on its promises to students in Scotland.”
Scott Parkin – CEO IEP:
“The Chancellor’s decision to give a 10.1% rise in benefits is welcome news as is the aim around investing in employment and skills to help grow the economy, however to tackle the rise in economic activity we would prefer to see an emphasis on incentives and skills development rather than penalties for those already working hard to change their circumstances.
“Employability practitioners have the necessary skills and knowledge to support people with barriers to employment into sustainable work, particularly the Over 50s, a group who have exited the workforce in recent years, and those who have been long-term unemployed due to ill health, disability or other challenges but work can be difficult for some people to access for many different reasons. Encouraging people back into the workforce requires real skill and the building of trusted relationships. Employability professionals, wherever they may be placed, are well-equipped to do this but more people need more access to employability support, not just people who are already claiming benefits. It should be widely available to anyone struggling or facing barriers in getting back to work or progressing in work.”
Sarah Gilchriest, President of Circus Street, commented:
“We are delighted that the Government has today recognised the need for school leavers to have skills fit for a modern economy, and the value that this can offer for the growth of our economy. This ambition shouldn’t be limited by age or situation – the ability to upskill should be available to all our workforce.
There is the opportunity ahead of us for a skills revolution – the biggest transformation in skills seen in years, as we ensure that the UK workforce is prepared for the digitalisation of the economy. In 2021, PwC released a report that detailed how a broad based training program in areas such as digital skills and data could result in an additional 3.4% GDP growth and 200,000 new jobs in the UK. This is the difference between a recession and a booming economy.
“Any action will come not a moment too soon. We have a severe skills shortage in the UK which has only become more acute since Brexit. Skills are needed not only to continue to fuel Britain’s tech industry but also to help organisations modernise by having employees capable of taking advantage of the latest innovations. We can see how the digital skills crisis has manifested itself through the UK’s falling productivity rates and the rise in economic inactivity in the over-50s. Training is needed to future proof people’s careers and create more resilience in the economy.
“A lot of details on the shape and scope of the Government’s skills program need to be addressed, but it is critical that they look to work closely with businesses as well as academic institutions to develop the best framework. It cannot be a top down approach.
“As a global business working with many of the world’s largest brands we have seen first hand the importance of digital skills training right across the world. We welcome this announcement, and look forward to working with businesses and other stakeholders to play our part in supporting this ambitious but necessary commitment to invest in modernising the skills of the UK workforce.”
John Thornhill, CEO of LTE Group, said:
“While the government’s rhetoric on the importance of education and skills in driving up economic growth is to be welcomed, its words are not backed up by its actions, with no funding increases for FE and skills being included in the Autumn Budget.
“Colleges and training providers are having to absorb rising energy prices and wider inflationary pressures. We support the Association of Colleges’ calls for underspends on 16-18 provision and clawbacks from the adult education budget to be invested in skills provision to help ensure that FE providers can continue to remain financially viable to provide a high-quality learner experience.”
Amanda Pritchard, NHS Chief Executive, said:
“When the government – and the country – face such a daunting set of challenges, we welcome the chancellor’s decision to prioritise the NHS with funding to address rising cost pressures and help staff deliver the best possible care for patients. This shows the government has been serious about its commitment to prioritise the NHS.
“The NHS is already one of the most efficient health services in the world and we are committed to delivering further efficiencies, with over £5 billion already freed up for reinvestment in patient care this year.
“NHS staff are delivering a huge amount in the face of record demand with 10% more GP appointments than before Covid, an extra 35 million in a year, more support than ever for peoples’ mental health and the highest level of cancer checks while transforming peoples’ lives with innovative treatments such as laser therapy for epilepsy and genetic testing for sick babies and children.
“While I am under no illusions that NHS staff face very testing times ahead, particularly over winter, this settlement should provide sufficient funding for the NHS to fulfil its key priorities. As ever, we will act with determination to ensure every penny of investment delivers for patients.”
Leora Cruddas CBE, Chief Executive, Confederation of School Trusts said:
“We are delighted that the Government has prioritised schools in the Autumn statement.
“We know economic times are tough. But investment in the education of our children is an investment in our future.
“Schools and school trusts have the talent and expertise to find innovative and cost-effective ways to keep improving education and supporting their local communities, and the announcement today will help them to plan ahead.”
Helen Dickinson, Chief Executive, the British Retail consortium, said:
“High inflation remains a major threat to the UK economy and we support the government’s objective of bringing this down. Inflation is making people poorer, damaging consumer confidence and holding back demand. It pushes up the costs to businesses which further increases prices for consumers. As the retail industry enters the crucial Christmas period, it is vital that inflation is brought to heel.”
Bryan Sanderson, Chair, Low Pay Commission, said:
“The rates announced today include the largest increase to the NLW since its introduction in 2016 and will provide a much-needed pay increase to millions of low-paid workers across the UK, all of whom will be feeling the effects of a sharply rising cost of living. For a full-time worker, today’s increase means nearly £150 more per month. The tightness of the labour market and historically high vacancy rates give us confidence that the economy will be able to absorb these increases.
“Businesses also have to navigate these economically uncertain times and by ensuring we remain on the path to achieve our 2024 target, employers will have greater certainty over the forward path. These recommendations have the full support of the business, trade union and academic representatives who make up the Commission.”
Baldock, CEO, Currys plc, said:
“We’re happy that the Treasury listened to our concerns on business rates, and acted quickly. I’m also delighted at the ditching of the Online Sales Tax, which would have added costs for consumers and depressed business investment. We will continue to support customers and colleagues through this cost-of-living crisis, keeping prices low, jobs well-paid, and helping everyone enjoy amazing technology.”
James Lowman, Chief Executive, Association of Convenience Stores (ACS) said:
“We welcome the freeze of the business rates multiplier for another year. The extension and increase in the retail, hospitality and leisure relief scheme will be warmly welcomed by small business in particular. Scrapping downward transition will help the businesses most adversely impacted by the pandemic and other market factors, and the Supporting Small Business Scheme will help those who have grown their business to the point where they lose some business rates relief they previously claimed. This package of business rates measures meets our asks to the Chancellor and we are delighted that he has listened. We will continue to work with the Treasury and other departments on modernising the whole business rates system.”
A spokesperson for ASOS said:
“We welcome the Chancellor’s decision to rule out an Online Sales Tax after considering the evidence and arguments. Like other online retailers and major High Street names, we opposed this new sales tax which would have added significant business costs against the backdrop of the current challenging economic environment and risked higher prices, so this decision is good news for consumers and businesses alike.”
A spokesperson for GSK said:
“We welcome the Government’s continued commitment to increase investment in R&D and boost incentives for businesses to invest in innovation. Given the challenging economic circumstances we face, it’s even more important that the Government continues to take steps to secure the UK’s leadership in science and technology, including life sciences which are a key source of jobs and growth, and we look forward to working with the Government to deliver this ambition.”
Richard Torbett, Chief Executive, The Association of the British Pharmaceutical Industry (ABPI), said:
“The Chancellor has delivered a pragmatic Autumn Statement, taking some tough decisions while recognising the vital role innovation must play in setting the economy back on the path to recovery.
“The decision to protect spending on research and development, as well as increasing the R&D expenditure credit from 13 to 20 percent are both essential to boosting the UK’s share of global pharmaceutical R&D spending and investment.
“The life sciences industry is uniquely well-placed to deliver the innovation-led growth the UK needs. To realise this opportunity, the government must continue striving to make the UK a more competitive and attractive place to invest. This journey is already well underway, but we need to raise our ambitions even further if we are to truly make the UK a life science superpower.”
Mayor of Greater Manchester Andy Burnham said:
“Today’s Autumn Statement brought mixed blessings for Greater Manchester.
“On a positive note, I am encouraged by the Chancellor’s commitment to a new devolution deal for our city-region. We’ve worked hard to make the case for greater powers over housing, skills and transport and a single, block grant similar to Scotland and Wales. This would represent a major strengthening of devolution in England and the fact that the Government is looking positively at these proposals is itself a significant vote of confidence in what Greater Manchester is achieving.
“Of more concern is the Government’s second retreat on its promise to build Northern Powerhouse Rail in full. This was promised in the Manifesto, watered down in the Integrated Rail Plan, promised again by the previous PM and today withdrawn again. The North deserves much better than being given the run around like this. A new rail line across the North of England via Bradford is the single most important infrastructure investment this country needs and we ask the Government to sit down with Mayors and Leaders to discuss ways in which we can achieve it in full.
“The single biggest unresolved issue is public sector pay. We are facing a long, difficult and potentially dangerous winter and cannot afford to have our emergency service workers forced to take action to protect their living standards due to the lack of a fair pay settlement. Simply passing the buck to local employers on issues like firefighters’ pay is an abdication of responsibility. It will put even more pressure on the Council Tax, already under strain from today’s announcements on social care, and that will hit the poorest hardest. It is the Government’s job to guarantee the continuity of our emergency services this winter and we need them to negotiate practical solutions with workers and trade unions.”
Veejay Lingiah, CEO and Co-Founder of FlashAcademy, a language-learning platform that specialises in helping speakers of other languages learn English, had this to say:
“With the UK in recession, it has been a concerning time for schools that have been wondering what their future might look like. The November budget statement has likely lifted the weight from the shoulders of many school board members across the country, and has provided some level of security about the future of British education.
Schools are so important to the development of children, particularly in their early years. Education provides the foundations on which a lifetime of knowledge is then built.
For all children, having access to a good level of education is critical to ensuring that their language skills develop as they should. For children coming into schools where English is not their first language, they are already starting out at a disadvantage and therefore will require more assistance to bring their language skills in-line with their peers.
We have seen, and data shows, that once these language skills have been acquired, these children do remarkably well in the classroom and excel academically. However, for this to happen, schools require the correct funding to be able to retain a good amount of staff.
The budget announcement will have provided some level of reassurance for schools, with an investment of £2.3 billion being put into the education sector in the next two years. We are hopeful that this funding will help to support schools in their struggles against the issues recently highlighted by the head-teacher’s union, NAHT.”
Responses