Autumn Statement: Business Roundup

The chancellor of the exchequer, Jeremy Hunt, delivered the government’s Autumn Statement to the House of Commons on Wednesday. 

Mr. Hunt updated the gathered members of parliament on the Office for Budget Responsibility’s (OBR) latest forecasts for the British economy. He reported that GDP growth was stronger than previously expected this year, but had been revised down for three consecutive years starting from 2024. He also stated that inflation was expected to fall to the Bank of England’s target of 2 percent in 2025.  

For businesses 

The chancellor announced several measures designed to help business or encourage investment.  

These included: 

• £500m over the next two years to fund more "innovation centres" to help make the UK an "AI powerhouse". 
• An additional £4.5bn of support for manufacturing between 2025 and 2030. This includes £975m for aerospace firms, £520m for life sciences like medical research companies, and £960m for the new green industry firms. 
• Three new investment zones were announced, with one being Manchester. The local zone will focus on advanced manufacturing and materials. It is hoped that it will help to leverage £1.1bn in private investment and help to create 32,000 jobs in the region over the next ten years. 
• The financial incentives for Investment Zones and tax reliefs for Freeports will be extended from five to 10 years. There will also be a new £150m Investment Opportunity Fund for the programme. 
• The “full expensing” for businesses has been made permanent. For every £1 that a business invests in IT, machinery and equipment, they can claim back 25p in corporation tax. This benefits those companies which invest heavily in equipment, such as manufacturers. But companies which aren't profitable, or which mainly invest in people and equipment, won't benefit as much. 
• There will be a freeze in the way business rates are calculated for an extra year and a 75% discount on rates for hospitality will stay for another year too. 

• The government will freeze the small business multiplier for a further year and extend the 75% discount on business rates up to £110,000 discount for retail hospitality and leisure businesses for another year as well. 
• £50m in funding over the next two years to increase the number of apprentices in engineering and "other key growth sectors". 

National Insurance and National Living Wage 

The chancellor announced that the self-employed who pay Class 2 National Insurance will no longer have to. However, self-employed people who pay "Class 4" National Insurance at 9% on all earnings between £12,570 and £50,270 will see that cut by 1 percentage point to 8% from April. 

In a move to help more people the National Insurance rate will be cut by 2 percentage points from 12% to 10%. from 6 January. 

The minimum wage - or National Living Wage - will rise from £10.42 to £11.44 per hour in April next year, a rise of 9.8% and worth up to £1,800 for a full-time worker. For the first time the higher wage will also be paid to 21 and 22-year-olds. 

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