JEREMY Hunt will finally unveil his long-awaited Autumn Statement on Wednesday.
The major fiscal event will centre around desperately desired personal tax cuts, alongside a huge overhaul of universal credit payments.
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It comes as inflation has fallen to its lowest level for two years, dropping to 4.6 per cent in the year to October – down from 6.7 per cent in September.
In a major speech today Rishi Sunak laid out a blueprint to boost flatlining growth – saying Britain faces a “critical” choice ahead of Wednesday.
His pledges also includes reducing debt, shoring up domestic energy supply, backing businesses and delivering a world-class education.
Tory MPs have been clamouring for tax cuts to win back squeezed voters – shouldering the highest burden since the war – ahead of next year’s election.
Answering their pleas he said today: “We will do that carefully, we will do that responsibly, but that time is now here.”
He begged people to trust him on steering the economy “whether you like me or not”.
The Autumn Statement is set to be one of the final chances for Mr Sunak and the Chancellor to try and win over voters using economic policy.
Here are five major announcements to expect on Wednesday.
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Personal Tax Cuts
Mr Hunt will make desperately desired cuts to personal tax rates at the Autumn Statement.
Today Mr Sunak said: “The country faces a critical choice about how we grow the economy.
“Do we continue with the big government, high spending, high borrowing and high taxes that were necessary through the pandemic?
“Or, as we believe, should we change our approach and grow the economy through the dynamism of the private sector.”
Yesterday he insisted that “everything was on the table” as it emerged he was looking at an income tax and national insurance reduction for workers, despite fears it could hike inflation.
Mr Hunt said: “I want to show people there’s a path to lower taxes.
“But we also want to be honest with people, this is not going to happen overnight. It requires enormous discipline year in, year out.”
The Chancellor added: “If you want to bring down personal taxes the only way to do that sustainably is to spend public money more efficiently.
“Rome wasn’t built in a day, these things take time.”
It isn’t currently clear whether changes to personal tax rates will come through National Insurance contributions or income tax.
A Treasury source told The Sun that changes to personal tax rates will be conducted in a “serious, phased and responsible way – in a way that keeps inflation down and debt on track to fall”.
The source added that “any measures on tax on Wednesday will be absolutely squarely focussed on the supply side of the economy, which is the only way to sustainably drive up growth”.
Earlier speculation about changes to the rate of inheritance tax were shut down by sources over the weekend.
They said that slashing the “death levy” would “not land well” with the public during a cost of living crisis.
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Benefits crackdown
Hundreds of thousands of benefits claimants who “choose to coast” face losing their hand-outs under a radical shake-up to be announced on Wednesday.
The Chancellor has vowed that fit and able Brits who refuse to take up work will be hit with a range of sanctions.
The move is part of a major back to work drive with a record high 2.6 million people long-term sick.
Sanctions will see the worst-offending claimants lose parts of their benefits.
Benefit recipients who don’t look for jobs risk losing access to free NHS prescriptions, dental care, legal aid and energy bill support.
And sick notes will be approved by civil servants instead of doctors in a trial where patients will be treated by therapists working for DWP.
New mums will still get the 12 month free prescriptions and dental care.
Digital technology will be used to track claimants’ attendance at job fairs and interviews as part of the beefed-up regime.
The Chancellor said the changes are the biggest set of welfare reforms since the introduction of Universal Credit back in 2012.
Reforms also mean that no claimant should hit 18 months out of work on full benefits if they’ve not taken all reasonable steps to comply with Job centre demands.
Business rates and alcohol duty
Business rates are a tax that firms such as shops, offices, pubs and factories pay to their local council.
Companies have repeatedly called for an overhaul of the system, complaining that it’s outdated and unfair.
Business rates relief is currently 75%, but hospitality suggest the pub sector will face a near £1billion whack if the Government does not extend current support.
Meanwhile, heated alcohol levies increased by 10.1% on August 1.
This represented the biggest shake-up to duty rates since 1975.
The new system will now tax liquor on its alcoholic strength and consist of six standardised alcohol duty bands.
Hospitality UK say one in ten boozers could go out of business if the Chancellor fails to extend business rates relief in his Autumn Statement.
The Sun launches a Save Our Sups campaign to protect the great British boozer.
The rate of closures now means there are fewer than 100,000 pubs across the UK.
UK Hospitality reckons freezing business rates relief will save the sector £630million and spare it an inflation-linked rise costing a further £230million.
Help for First Time Buyers
There are a number of schemes to help first-time buyers already – but there could be more on its way.
If you are unable to save the deposit needed to buy a home or can’t afford the mortgage payments, Shared Ownership could be worth a closer look.
The government-backed scheme allows people to buy a portion of a property and pay rent to a landlord on the rest.
First-time buyers can bag a home with a discount of up to 50% using this government scheme.
The home’s discount will stay with the property forever and you won’t be able to cash in on the saving when it comes to selling.
To access the scheme, you will need to have a deposit worth at least 5% of the discounted purchase price and earn less than £80,000 a year or £90,000 in London.
Local councils may also add further rules such as a local connection or reserving the properties for key workers only.
Meanwhile, Lifetime Isas can be opened by anyone aged 18 to 39.
When you open a Lifetime Isa the government will add 25% to your savings, up to a maximum of £1,000 a year.
That means if you put in £4,000 a year you’ll get a £1,000 free cash bonus to put towards your first home.
Mr Hunt is said to be mulling over a package of support to help first-time buyers get on the property ladder.
One of the options said to be being considered is an extension to the government’s mortgage guarantee scheme.
It allows buyers with a small deposit of 5% to get a 95% loan to value (LTV) mortgage.
The initiative was originally due to finish at the end of 2022, but it is now set to come to an end on December 31, 2023.
The Treasury is also said to be considering a new type of individual savings account (ISA), targeted at people looking to get a deposit together.
Benefit and State Pension payments
Ministers are under pressure to hike the pensions triple lock by average earnings of 8.5 per cent, rather than 7.8 per cent if you strip out bonuses.
And Mr Hunt could face fury if he increases benefits in line with the usual September rate of inflation, which was 6.7 per cent or the lower 4.6 per cent, offering a saving £2 billion.
Benefits payments generally rise every April in order to keep up with the cost of things like food and household bills.
The process is known as “uprating” and tends to see payments go up by the previous September’s inflation rate.
Inflation stuck at 6.7% in September.
The Chancellor will confirm how much benefits will be uprated by in his statement.
Uprating ensures that payments can keep up with the cost of living like food, clothes and fuel.
The government might freeze benefit payments for working-age people.
Ministers are rumoured to be considering cuts that would slice billions off the UK’s welfare budget.
