National insurance to be cut from 12% to 10% – but tax burden to remain at record high
National insurance is to be cut by two percentage points, the chancellor has announced.
In a boost to employee’s pay packets, Jeremy Hunt told the Commons that the main 12% national insurance rate would fall to 10% from 6 January – saving those on an average salary of £35,000 over £450 a year.
In his autumn statement, he also abolished NI payments for the self-employed, known as class two national insurance, to recognise the government “values their work”.
Politics latest: Chancellor delivers autumn statement amid pressure in the polls
The tax cuts follow long-standing pressure from the Tory backbenches to reduce the burden on both the public and business, which has been sat at a 70-year high.
But it also comes as a general election looms, with the Conservatives still lagging behind Labour in the polls.
Delivering his autumn statement in the Commons, the chancellor said: “If we want people to get up early in the morning, if we want people to work nights, if we want an economy where people go the extra mile and work hard then we need to recognise that their hard work benefits all of us.”
However, Sky News’ economics editor Ed Conway said the overall tax burden on the public would still remain at a record high as the government continued its freeze on tax thresholds.
Forecasts from the Office for Budget Responsibility (OBR) showed taxes were still trending upwards, with a post-war high of 37.7% set to be reached by 2028/29 under the current government plans.
They put this down to so-called “fiscal drag”, as while people’s wages may increase, the level at which they start paying tax remains unchanged, and that leads to more people being moved into the higher tax rates – four million more, if the OBR’s prediction is correct.
Labour’s shadow chancellor, Rachel Reeves, said Mr Hunts announcements owed “more to the cynicism of a party desperate to cling onto power than the real priorities of this high tax, low growth Conservative government”, adding: “So I think we can forgive taxpayers for not celebrating when they see the truth behind today’s announcements.”
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Shadow chancellor Rachel Reeves responds to Jeremy Hunt’s autumn statement
Elsewhere in his speech, Mr Hunt confirmed Universal Credit would be increased by inflation next April in line with September’s inflation figure of 6.7% – an average increase of £470 for 5.5 million households – despite rumours the government was planning a smaller rise.
And he said the full state pension would go up by 8.5% to £220 per week – worth up to £900 more a year, honouring the Tories’ commitment to the triple lock.
But the chancellor also announced new tougher measures for job seekers, saying those who fail to find work after 18 months of “intensive support” will be given mandatory work placements.
Those who do not engage with the process for six months will lose their benefits altogether.
Mr Hunt also confirmed the much trailed plans to reform the benefits process for those who are signed off work because of sickness or disability.
He called the over 100,000 people signed off each year a “waste of potential” that was “wrong economically and wrong morally”.
As a result, the chancellor said the government would reform the Work Capability Assessment to “reflect greater flexibility and availability of home working after the pandemic”.
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Key announcements from chancellor at a glance
Mr Hunt said: “Our choice is not big government, high spending and high tax because we know that leads to less growth, not more.
“Instead we reduce debt, cut taxes and reward work. We deliver world class education. We build domestic sustainable energy and we back British business”.
He added: “Conservatives say we should unlock the potential we have right here at home, which we do with the biggest set of welfare reforms in a decade.”
Other announcements in the autumn statement included:
• Freezing all alcohol duty until 1 August 2024
• Extend 75% business rates discount for retail, hospitality and leisure businesses for another year
• Increasing the local housing allowance rate, giving 1.6 million households an average of £800 of support next year
• Consult on giving savers a legal right to have one pension pot for life that employers pay into
• Make the super deduction tax break for large businesses investing in the UK permanent
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The chancellor insisted the government’s plan for the British economy was “working” as ministers had “taken difficult decisions to put our economy back on track”.
He celebrated a reduction in government borrowing and the halving of inflation since last autumn’s record high after Liz Truss’ disastrous mini budget, saying that gave him the room to make tax cuts.
However, inflation still sits at 4.6% – double the target of the Bank of England.
Labour’s Ms Reeves said: “The chancellor claims the economy has ‘turned a corner’, yet the truth is that under the Conservatives growth has hit a dead end.
“What has been laid bare today is the full scale of the damage that this government has done to our economy over thirteen years, and nothing that has been announced today will remotely compensate.”
She added: “As the sun begins to set on this divided, out of touch, weak government, the only conclusion the British people will reach is this – after thirteen years of the Conservatives, the economy simply isn’t working.
“And, despite all the promises today, working people are still worse off.”
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Sky’s Ed Conway crunches through the numbers following the Chancellor’s autumn statement
The OBR has upgraded its growth forecast for gross domestic product – a measure of the size of the economy – this year, but downgraded the figure for subsequent years.
The budget watchdog’s forecast in March was for the economy to shrink by 0.2% in 2023, but that has now been revised up to 0.6%.
But in 2024 growth is forecast to be 0.7% rather than the 1.8% expected at the time of the Budget, 2025 is expected to see 1.4% rather than 2.5% and 2026 could be 1.9% instead of 2.1%.
Growth is then expected to go beyond the previous forecast, with 2% in 2027, slightly above the 1.9% predicted in March, with 1.7% in 2028.
“If we want those numbers to be higher, we need higher productivity,” the chancellor said.
On the eve of the autumn statement, the Treasury confirmed it would be increasing the national living wage, rising from £10.42 to £11.44 from April, and that it will benefit workers aged 21 and over, rather than 23 and over.
It will mean an £1,800 annual pay rise next year for a full-time worker on the living wage, while 18 to 20-year-olds will receive a £1.11 hourly rise to £8.60.
The changes are expected to impact about two million people.
Eight men have been arrested by the Metropolitan Police in two unconnected but “significant” terrorism investigations.
In one operation on Saturday, counter-terror officers arrested five men – four of whom are Iranian nationals – as they swooped in on various locations around the country. All are in police custody.
The Met said the arrests related to a “suspected plot to target a specific premises”.
In an update shortly after midnight, the force said: “Officers have been in contact with the affected site to make them aware and provide relevant advice and support, but for operational reasons, we are not able to provide further information at this time.”
Commander Dominic Murphy, head of the Met’s Counter Terrorism Command, said: “Counter-terrorism policing, supported by police and colleagues from across the country, have conducted arrests in two really significant operations, both of which have been designed to keep the public safe from threats.
“There are several hundred officers and staff working on this investigation, and we will work very hard to ensure we understand the threats to the wider public.”
He refused to say if the plot was related to Israel, but described it as “certainly significant” and said “it is unusual for us to conduct this scale of activity”.
He also asked the public to “avoid speculation and some of the things that are being posted online”.
MI5 director general Ken McCallum said in October that the intelligence agency had responded to 20 “potentially lethal” Iran-backed plots since 2022. He warned of the risk of an “increase or broadening of Iranian state aggression in the UK”.
Read more: Terror arrests came in context of raised warnings about Iran
Children ‘petrified’ by armed police
Rochdale resident Kyle Warren, who witnessed one of the arrests at a neighbouring house, said his children had been playing in the garden when they came running into the house, saying a man in a mask had told them to go inside.
“Obviously, I was a bit worried,” Mr Warren told Sky News’ Lisa Dowd, and so he went into the garden to investigate.
“As we’ve come out, we just heard a massive bang, seen loads of police everywhere with guns, shouting at us to get inside the house.”
Kyle Warren said his children were ‘petrified’
From upstairs in his house, he then heard “loads of shouting in the house” and saw a man being pulled out of the back of the house, “dragged down the side entry and thrown into all the bushes and then handcuffed”.
There were about 20 to 30 officers with guns, he believes.
“It’s just shocking, really. You don’t expect it on your doorstep.”
His daughters were “petrified… I don’t think they’ve ever seen a gun, so to see 20 masked men with guns running round was quite scary for them”.
Mr Warren, who only moved into his house a year ago, said he had “never really seen anyone going in or out” of the house and actually thought it was empty.
One suspect was arrested in Cheadle Hulme, Greater Manchester. Pic: Sarah Cash
One suspect was arrested in Cheadle Hulme, Greater Manchester. Pic: Sarah Cash
Arrests and searches around the country
The Met added officers were carrying out searches at a number of addresses in the Greater Manchester, London and Swindon areas in connection with the investigation.
It said those detained were:
• A 29-year-old man arrested in the Swindon area
• A 46-year-old man arrested in west London
• A 29-year-old man arrested in the Stockport area
• A 40-year-old man arrested in the Rochdale area
• A man whose age was not confirmed arrested in the Manchester area.
A 29-year-old man was arrested in the Stockport area
Terror arrests in separate investigation
Police also arrested three further Iranian nationals in London on Saturday as part of another, unrelated counter-terror investigation.
The suspects were detained under section 27 of the National Security Act 2023, which allows police to arrest those suspected of being “involved in foreign power threat activity”.
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Home Secretary Yvette Cooper said: “These were two major operations that reflect some of the biggest counter state threat and counter terrorism operations that we have seen in recent years.
“This reflects the complexity of the kinds of challenges to our national security that we continue to face.”
Earlier, she thanked police and security services in a statement, and called the incidents “serious events that demonstrate the ongoing requirement to adapt our response to national security threats”.
Last year, the government placed the whole of the Iranian state – including its intelligence services – on the enhanced tier of the new foreign influence registration scheme.
It means anyone asked by Iran to carry out actions for the state must declare it, or face prison time.
UK
Terror arrests came in context of raised warnings about Iran, with ongoing chaos in its own backyard
These are two separate and unrelated investigations by counter-terror officers.
But the common thread is nationality – seven out of the eight people arrested are Iranian.
And that comes in the context of increased warnings from government and the security services about Iranian activity on British soil.
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Counter terror officers raid property
Last year, the director general of MI5, Ken McCallum, said his organisation and police had responded to 20 Iran-backed plots presenting potentially lethal threats to British citizens and UK residents since January 2022.
He linked that increase to the ongoing situation in Iran’s own backyard.
“As events unfold in the Middle East, we will give our fullest attention to the risk of an increase in – or a broadening of – Iranian state aggression in the UK,” he said.
The implication is that even as Iran grapples with a rapidly changing situation in its own region, having seen its proxies, Hezbollah in Lebanon and Hamas in Gaza, decimated and itself coming under Israeli attack, it may seek avenues further abroad.
The government reiterated this warning only a few weeks ago, with security minister Dan Jarvis addressing parliament.
“The threat from Iran sits in a wider context of the growing, diversifying and evolving threat that the UK faces from malign activity by a number of states,” Jarvis said.
“The threat from states has become increasingly interconnected in nature, blurring the lines between: domestic and international; online and offline; and states and their proxies.
“Turning specifically to Iran, the regime has become increasingly emboldened, asserting itself more aggressively to advance their objectives and undermine ours.”
Read more:
Anybody working for Iran in UK must register or face jail, government announces
As part of that address, Jarvis highlighted the National Security Act 2023, which “criminalises assisting a foreign intelligence service”, among other things.
So it was notable that this was the act used in one of this weekend’s investigations.
The suspects were detained under section 27 of the same act, which allows police to arrest those suspected of being “involved in foreign power threat activity”.
Those powers are apparently being put to use.
UK
Pictured: Boy killed in Gateshead industrial estate fire – 14 children arrested on suspicion of manslaughter
Tributes have been paid to 14-year-old Layton Carr who died in a fire at an industrial estate.
Eleven boys and three girls, aged between 11 and 14 years, have been arrested on suspicion of manslaughter after the incident in Gateshead on Friday. They remain in police custody.
Police were alerted to a fire at Fairfield industrial park in the Bill Quay area
Firefighters raced to Fairfield industrial park in the Bill Quay area shortly after 8pm, putting out the blaze a short time later.
Police then issued an appeal for a missing boy, Layton Carr, who was believed to be in the area at the time.
In a statement, the force said that “sadly, following searches, a body believed to be that of 14-year-old Layton Carr was located deceased inside the building”.
Layton’s next of kin have been informed and are being supported by specialist officers, police added.
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Teenager dies in industrial estate fire
A fundraising page on GoFundMe has been set up to help Layton’s mother pay for funeral costs.
Organiser Stephanie Simpson said: “The last thing Georgia needs to stress trying to pay for a funeral for her Boy Any donations will help thank you.”
One tribute in a Facebook post read: “Can’t believe I’m writing this my nephew RIP Layton 💔 forever 14 you’ll be a massive miss, thinking of my sister and 2 beautiful nieces right now.”
Another added: “My boy ❤️ my baby cousin, my Layton. Nothing will ever come close to the pain I feel right now. Forever 14. I’ll miss you sausage.”
A third said: “Rest in peace big lad such a beautiful soul taken far to soon my thoughts are with you Gee stay strong girl hear for u always.”
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Detective Chief Inspector Louise Jenkins, of Northumbria Police, also said: “This is an extremely tragic incident where a boy has sadly lost his life.”
She added that the force’s “thoughts are with Layton’s family as they begin to attempt to process the loss of their loved one”.
They are working to establish “the full circumstances surrounding the incident” and officers will be in the area to “offer reassurance to the public”, she added.
A cordon remains in place at the site while police carry out enquiries.
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