Chancellor Jeremy Hunt unveiling his Autumn Statement yesterday (Nov 17), and while aspects of it may bring joy to some, there are a number of details set to bring misery to others. In hour-long speech to MPs in the Commons the politician laid out the government's plans to try take back control of the economy and the chaos caused by former Pm Liz Truss and ex-Chancellor Kwasi Kwarteng.
As well as a stealthy tax rise on people's payslip and other spending cuts, Mr Hunt announced Brits will have to pay more-on their energy bills from April next year. Income and council tax are also set to increase - and all this is before you get into the fine print.
With the avalanche of information that emerged during Mr Hunt's Statement, some of the more miserable points have been harder to find that weren't included in the announcement. However, as reported by the Mirror, 16 hidden details have been uncovered that spell bad news for many.
READ MORE: Who gets the new £900, £300 and £150 cost of living payments
Addressing the small details in the Statement, Lib Dem Treasury Spokesperson Sarah Olney said: “Underneath the surface of this terrible 'cost of chaos' Budget are yet more hidden horrors. Everything from police to social housing to our crumbling schools is being left in the dust by this Conservative Government.”
Highest tax burden since WWII
According to the Office for Budget Responsibility (OBR), Hikes made in the Autumn Statement will mean the UK will face its highest level of tax burdens since World War Two. It has been forecast that by 2024-25, the tax burden will be 37.5 per cent - meaning an estimated 55 per cent of households will be handing out more money in tax. 1948 was the last time tax was anywhere near this high as a share of GDP, at around 37 per cent.
Bombshell £250 rise for council tax payers
A five per cent annual rise to council tax has been given the go-ahead by Mr Hunt, meaning Brits face as much as £250 hike in a single year. The three per cent limit on hikes without holding a referendum has been scrapped, and instead the Chancellor will let town halls raise council tax by five per cent a year indefinitely.
Treasury officials are expecting 95 per cent of town halls to use the full five per cent to reduce their cuts. It is expected to net an extra £3.3bn a year by 2026/27 and £4.8bn a year by 2027-28. The average Band D bill is already almost £2,000 a year. The Office for Budget Responsibility (OBR) says the expected windfall is the equivalent of raising the average Band D bill by £250 in 2027/28.
Electric car owners to be taxed - raking in £1.5bn
Despite previously being exempt, Mr Hunt has now announced owners of electric cars will be taxed. This is set to rake in £1.5billion a year. From 2025, electric car drivers will no longer be exempt from vehicle excise duty - something Jeremy Hunt said in his speech would make the system "fairer."
Fuel duty could rise in 2023
On page 53 of the OBR's document, it is assumed that fuel duty could rocket by 23 per cent from March 2023. Such a move would mean an additional 12p per litre on petrol and diesel - which would raise a whopping £5.7billion for the Treasury. However, it seems unlikely, given fuel duty has been frozen since January 2011 - and Tory MPs are already furiously demanding a temporary 5p cut is extended.
More government spending from 2025
In 2025, the government's spending is on course to rise. Following that, Mr Hunt will make cuts of up to £11.6bn in 2025/26 and then £23.2bn in 2026/27, and £36.3bn in 2027/28. Mr Hunt plans to rolls this out by bumping up day-to-day spending in real terms by one per cent a year. He also plans on slashing capital spending - on big infrastructure projects - by freezing it at the 2025 rate.
Even though spending rises overall, the IFS think tank predicts “unprotected” departments like councils, prisons, police, HMRC and courts will be cut back to make up for bigger rises in the NHS and defence. Meanwhile Cabinet Office spending is due to halve in real terms from £900m in 2021/22 to £400m in 2024/25. And Levelling-Up Department funding - excluding local government - will fall by £500m in real terms by 2024/25.
Nine per cent fall for house prices next year
Between winter and the summer of 2024, house prices are expected to take a tumble, while the cost of paying a mortgage rockets. Average interest rates on the stock of outstanding mortgages are expected to peak at five per cent in the second half of 2024, the highest level since 2008, the OBR added. As the economy recovers, house prices are expected to be around seven times earnings. The OBR said there is significant uncertainty over its forecast.
Benefit sanctions for 600k people
Universal Credit claimants who already work more than half the week will be told to increase their hours - and could have their benefits stopped if they don’t co-operate. People whose income is equivalent to 15-35 hours a week “will be required to meet with a dedicated work coach in a Jobcentre Plus to increase their hours or earnings”, the small print of the Budget says.
That'll mean 600,000 working benefit claimants having to meet with their work coach. It’s understood those who don’t co-operate can be sanctioned under the existing punishment regime. A phased rollout will begin in September 2023.
Minimum wage is rising by more than NHS pay
The minimum wage is rising by more than many NHS workers’ pay. The hourly rate for over-23s is going up by 92p from £9.50 to £10.42 from April. Jeremy Hunt boasted that “represents an annual pay rise worth over £1,600 to a full-time worker.” Yet the worst-paid NHS workers are getting a minimum pay rise of £1,400 this year, prompting them to strike.
Stealth raid drags 2.6million into paying 40p tax
Jeremy Hunt will drag 3.2million more people into paying 20p income tax - and 2.6million more people into paying the 40p rate - thanks to six years of stealth rises. The Chancellor is freezing the £12,570 threshold for paying Income Tax and National Insurance and the £50,270 threshold for paying the 40p rate up to April 2028. That’ll mean the number of people paying higher-rate tax rises from 11% to 15 per cent, its highest since the current tax regime began in 1990.
Seven per cent fall for living standards
Household disposable income will plummet a staggering 7.1 per cent in real terms over this year and next year - the biggest drop since records began in 1956. The grim conclusion was drawn by the OBR, which said disposable income will still be below pre-pandemic levels by 2028.
Half of households to be worse off in cash terms
Half of all households - everyone in the highest 50 per cent of earners - will be worse off in cash terms as a result of decisions announced in the budget. The biggest impact is caused by the £500 cut in generosity of the Energy Price Guarantee, the Treasury’s own impact assessment shows. But a chunk of the clobbering will come from tax hikes - particularly for the top 10 per cent of earners, who could be a little over £900 worse off overall.
Some help for the high street - but the Amazon tax has been dumped
High street businesses will receive a £14billion tax cut over five years as they compete with online rivals. The business rates multiplier will be frozen for another year, with “extended and increased relief for retail, hospitality and leisure businesses, worth almost £2.1bn” in a boost for the Mirror’s High Street Fightback campaign. Firms with vast, out-of-town warehouses, such as Amazon, will pay more.
But it's not all bad news for Amazon. The mooted Online Sales Tax - planned to try and restore the balance between internet giants and bricks and mortar stores - has been unceremoniously canned. Apparently it would have been too "complex" and create "unintended distortion or unfair outcomes between different business models."
£18billion ‘giveaway’ to banks
Tories have been blasted for an £18billion "giveaway" to big banks by cutting the Bank Surcharge from eight per cent to just three per cent from April. The Lib Dems urged Mr Hunt to reverse the move, along with a cut to the Bank Levy.
Next year the two bank taxes will raise a combined £2.5 billion - down from £4.7billion in 2016-17 – a cut of 56 per cent. This means banks operating in the UK will pay £18billion less in these taxes over the next five years, the party said.
More extra cash to tackle benefit fraud than tax avoidance
The Government plans to put an extra £280million into targeting benefit fraud and error next year. That is three and a half times more than the £79million extra they’re investing in tackling serious tax fraud and avoidance by the super rich over the next five years. They hope to claw back an additional £2.2billion in savings on the benefits bill every year by 27-28, compared to just £725million of prevented tax avoidance in five years.
£1bn less to fix crumbling schools
The amount of money departments can spend on capital projects - like maintaining buildings - has been frozen in cash terms from 2025 to 2027. When inflation is taken into account, that means the Department for Education will have £1 billion less to spend fixing crumbling schools in 2024-25.
Who produced the big private schools claim?
In his speech, Jeremy Hunt said "certain estimates" suggested slapping VAT on private schools - a key Labour policy - would push 90,000 kids to move to state schools. But who made these "certain estimates"? Why, they were made in a report commissioned by the Independent Schools Council - the lobbying body for the private schools industry.
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