The chancellor of the exchequer, Jeremy Hunt, has now given his first Autumn Statement, which was, as expected, a full budget in all but name. Against the backdrop of a £55bn hole in public finances and a challenging economic situation, the statement delivered both record-breaking tax rises and a new era of austerity. The government priorities are stability, growth and protecting public services. Rather than raising tax rates, the chancellor has relied on tax rises via a freezing of rates and allowances, as well as measures which are intended to fall on ‘those with the broadest shoulders’, although the nature of threshold freezes means most people will end up being affected in some way. The freezing of personal tax rates and thresholds alone is expected to raise £26bn a year by the 2027/28 tax year.
The government is seeking to protect the most vulnerable in society and the chancellor’s statement announced investment into education and healthcare, both areas that have suffered during the pandemic. The other spending measures are designed to promote growth and investment in the UK – a return to Rishi Sunak’s agenda of ‘people, capital and ideas’. Ultimately though, this was a matinee show that few will want to see again, and many will be hoping this provides the tonic to markets that the chancellor is hoping for, and that more positive economic times lie ahead in the Budget next spring.