Autumn statement 2022
On November 17th the Chancellor, Jeremy Hunt MP, delivered his Autumn Statement setting out the Government’s tax and spending plans. We will look closely at these plans – in particular the implications for our campaigning on health and social care and on the financial impact of MND during a cost-of-living crisis.
We welcome the news that key benefits will rise in line with inflation, having joined our voice at Westminster with many other charities in calling for this in recent months. In the meantime, here are the key points from the statement:
Recession: The Chancellor’s statement and accompanying forecasts confirm that the UK has officially entered recession, predicted to last for around a year, during which the economy will shrink by 1.4%.
The Chancellor’s plan involves fiscal consolidation of £55 billion, consisting of both tax increases and public spending reductions.
Taxation: Personal allowance thresholds for income tax and National Insurance will be frozen until 2028, meaning that proportions of wages taken up by taxation will increase as wages rise.
The threshold for paying the highest 45p tax rate will be reduced from £150,000 to £125,140, increasing the rates paid by the highest earners, and tax-free allowances on unearned income will be reduced.
There will be an increased windfall tax of 35% on energy profits and a new 45% temporary levy on electricity generators.
Welfare benefits: Working age benefits and disability benefits will rise in line with inflation. 600,000 more people receiving Universal Credit will be asked to meet with a work coach.
The move from Employment and Support Allowance to Universal Credit has been delayed until 2028. The Government will publish a review of the state pension age early in 2023.
NHS and social care: The Government will publish an independently verified long-term workforce plan for the NHS. The NHS budget will receive a £3.3 billion increase for the next two years, and social care funding will increase by £2.7 billion over the next two years.
The Government’s planned reforms to social care, including the introduction of a lifetime cost cap, will be delayed until 2025.
Cost of living support: The current energy price subsidy, which ends in April 2023, will continue for a further 12 months at a less generous level.
The average household will pay £3,000 per year for energy under the revised cost cap, compared to £2,500 at the current subsidy level.
There will be additional cost of living payments of £900 to households on means tested benefits, £300 to pensioner households, and £150 to households receiving disability benefits The National Living Wage will be increased from £9.50 an hour for over-23s to £10.42 from April next year.
The state pension ‘triple lock’ is maintained, meaning that the state pension will increase in line with inflation from next year.