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.
UK
Rishi Sunak delivers ‘kitchen sink’ manifesto – but he was unable to promise biggest thing Conservative MPs want
As Rishi Sunak was winding up his manifesto launch at metaphor-heavy Silverstone race track, the scale of the prime minister’s task in the remainder of the election campaign was becoming clear.
According to the exclusive Sky News-YouGov poll, Sunak needs to go through the gears at once or he’s in danger of dropping to the bottom step of the podium.
He was speaking hours before it emerged voting intention for the Conservatives had dropped to the joint lowest in this parliament – 18% – now putting Sunak’s party just one point ahead of Nigel Farage’s Reform UK on 17%, tantalisingly close to a crossover.
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A full third of 2019 Tory voters – the cohort that endorsed Boris Johnson last time – now say they will switch to Reform UK, while the proportion who think Sunak will be a good prime minister is down two points – to 22% – in the last fortnight. That last figure is possibly a casualty of the PM’s decision to leave D-Day commemorations early – and could conceivably have been worse.
The notable drop in Labour’s vote – three points to 38% – will do little to cheer a Tory party in the doldrums, consumed with their own existential angst. This is because the switch seems to match the Lib Dems jumping up four point to 15%. Much of the YouGov fieldwork was done when the Lib Dem manifesto was receiving peak coverage.
The question is whether the Tory manifesto launch could possibly have provided anything new with which to turn things around, from a position as dire as any Conservative can remember in living memory.
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What is in the Conservative Party manifesto?
Sunak has thrown everything at this manifesto: it’s 72 pages long, with nearly £20bn worth of tax and spending announcements.
There are pledges designed to appease and appeal to just about every demographic, from 2p off national insurance for working families, to accelerated national insurance abolition for the self-employed, to tax cuts for pensions, to help for first-time buyers and tax breaks for wealthier parents. This is to be paid for, Sunak said, in large part by yet more promises to pare back welfare, squeeze the public sector and more anti-avoidance measures.
It is a “kitchen sink” manifesto for the Tories. But it is not the first “kitchen sink” manifesto in recent memory.
Sir Keir Starmer boldly compared Sunak’s offering with that of Jeremy Corbyn – stuffed with policies that seem, and poll as, popular but are not sustainably affordable as an overall package.
The Labour leader was, of course, displaying the chutzpah of a man 20 points ahead in the polls by casually disowning a manifesto he himself stood on five years ago.
Nevertheless, his political purpose by making this point is two-fold: firstly, he is attempting to needle away further at the Conservatives’ claim of economic credibility, while also reminding people that manifestos stacked with popular policies do not automatically win elections.
Read more:
Who’ll win the election? Check our poll tracker
Objects thrown at Farage
What are the Tories and Lib Dems’ key pledges?
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PM launches party manifesto
But despite having individually popular ideas, the prime minister was unable to deliver perhaps the biggest thing Tory MPs might have wanted – a promise to reduce the overall tax burden in the next parliament.
It is the tax burden that hangs around the neck of a party proud of its low tax heritage, at an event at which Sunak had the audacity to invoke Nigel Lawson, the 1980s tax-cutting chancellor.
Sunak cannot bring it down. Yet he is unwilling to be completely automatically transparent over this point.
Rishi Sunak with wife Akshata Murty and supporters at the launch. Pic: PA
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Examine carefully this painful exchange in the questions from the media afterwards, when Sunak’s sleight of hand was noticeable.
He was asked by the Daily Mail: “Can you today guarantee that if you get in, overall taxes will be lower by the time you finish?”
To this, Sunak replied: “Because of the measures that are announced in the manifesto and you can see that document afterwards, the tax burden will be about one percentage point lower in every single year compared to the forecast that you saw at the spring budget a few months ago that Jeremy (Hunt, the chancellor) outlined.”
This answer is deliberately elliptical, because the truth is hard: more people are dragged into higher tax bands because of frozen thresholds, designed to pay back some of the debt incurred in COVID.
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As my colleague Ed Conway, Sky’s economics editor, says, even after the tax cuts in this manifesto, everyone will still be paying higher taxes in 2028-29 than we are today.
So the answer to the Daily Mail is yes – the tax burden will be higher, albeit not as high as previously planned.
Sunak’s answer, while true, made it sound like the picture is better than it is when it comes to tax – and it’s a complication for a Tory leader trying to make tax the key dividing line with his Labour opposition in this election.
As Beth Rigby pointed out, a recent poll shows that only one in six voters believe Sunak won’t raise their taxes, or raise major taxes, compared with one in four for Labour – and she asked him whether this means he has “blown it”.
“I’m not afraid to do things that are difficult,” he pleaded in response. It’s not clear many on his own side believe this argument will wash with the public at this late stage in the political cycle.
Rishi Sunak and Sir Keir Starmer will face questions from Beth Rigby and members of the public during Sky News’ special leaders’ event on Wednesday.
The programme airs live from Grimsby from 7pm on Sky News – Freeview channel 233, Sky 501, Virgin 603, BT 313 – and streaming on the Sky News website, app and across social channels. It is also available to watch on Sky Showcase.
Animal rights activists have targeted a portrait of the King, pasting over his face with a picture of the animated character Wallace.
A speech bubble, reading, “No cheese Gromit. Look at all this cruelty on RSPCA farms,” was also put onto the painting at the Philip Mould gallery in central London.
It was the first official portrait of the King, by artist Jonathan Yeo, since the coronation, which was unveiled at Buckingham Palace last month.
Animal Rising said two of its supporters were responsible for the stunt, saying the artwork was targeted because of the King’s love of the British stop-motion Wallace and Gromit comedy franchise created by Nick Park and his status as Royal Patron of the RSPCA.
Pic: Animal Rising/Jonathan Yeo 2024/Reuters
The Queen once revealed that inventor Wallace and his dog Gromit, the stars of hit Aardman films including The Wrong Trousers and A Grand Day Out, were her husband’s “favourite people in the world”.
In a post on the group’s website Daniel Juniper, one of those involved, said they wanted to draw his attention to alleged cruelty reported on RSPCA-assured farms.
“Even though we hope this is amusing to His Majesty, we also call on him to seriously reconsider if he wants to be associated with the awful suffering across farms being endorsed by the RSPCA,” he said.
“Charles has made it clear he is sensitive to the suffering of animals in UK farms; now is the perfect time for him to step up and call on the RSPCA to drop the assured scheme and tell the truth about animal farming.”
A video posted on social media site X shows two protesters approaching the painting before attaching the posters using paint rollers, then walking away.
Pic: Animal Rising
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‘I wasn’t surprised’
Gallery owner Philip Mould said staff had anticipated the painting may be targeted by protesters and is “safely secured in its frame with protective layers”.
“I wasn’t hugely surprised,” he said. “The attack on the picture was not actually of a serious nature. The perpetrators put water on the surface very quickly in a swift manoeuvre and then they added stickers to that.
“No damage was done. The stickers only remained up for about 10 or 15 seconds, and then were taken down by my gallery staff.
“I asked the individuals to leave and they did.”
The Metropolitan Police said in a statement: “In response to footage circulating on social media, officers attended a central London gallery to carry out enquiries. Police had not been called to the incident.
“Staff at the venue were spoken to. They confirmed no damage had been done to either the painting or the glass that covered it. The protesters were asked by staff to leave following the incident, which they did.
“The gallery did not wish to report a crime and as such there is no further action by police.”
Animal Rising – which said the posters were affixed using water sprayed on to the back, so they could be easily removed – is calling for the King to suspend his support for the RSPCA until the charity drops its ethical food labelling scheme.
Spokesperson Orla Coghlan said: “Just as Feathers McGraw fooled Wallace into a bank heist, the RSPCA has been fooling the British public into thinking their factory farms are – in any way – an acceptable place for animals to live. It’s clear from the scenes across 45 RSPCA-assured farms that there’s no kind way to farm animals.”
A portrait of King Charles by artist Jonathan Yeo.
Pic: Reuters
The report, released by Animal Rising on Sunday, contains findings from investigations on 45 farms across the UK featuring chickens, pigs, salmon and trout.
An RSPCA spokesperson said the charity has launched “an immediate, urgent investigation” after receiving the footage on Sunday but was “shocked by this vandalism”.
“We welcome scrutiny of our work, but we cannot condone illegal activity of any kind,” they said, adding the group’s “sustained activity is distracting from our focus on the work that really matters – helping thousands of animals every day”.
The spokesperson said the charity remains “confident” the RSPCA-assured scheme “is the best way to help farmed animals right now, while campaigning to change their lives in the future”.
“We have responded openly and transparently to Animal Rising’s challenges to our farming work,” they said.
“While we understand that Animal Rising, like us, want the best for animals, their activity is a distraction and a challenge to the work we are all doing to create a better world for every animal.”
Buckingham Palace declined to comment.
The portrait shows the King wearing the uniform of the Welsh Guards, which he was made regimental colonel of in 1975, and was originally commissioned in 2020 to mark his 50 years as a member of The Draper’s Company in 2022.
He sat for Mr Yeo on four occasions between June 2021 and November 2023 at both Highgrove in Gloucestershire and Clarence House in London.
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Activists throw cake at King Charles’s waxwork
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The renowned portrait artist’s past subjects include Idris Elba, Cara Delevingne, Sir David Attenborough, Nicole Kidman, Malala Yousafzai, and former prime ministers Lord David Cameron and Sir Tony Blair.
Climate activists smeared the Madame Tussauds waxwork of the King with chocolate cake in October 2022, while artworks including the Mona Lisa in the Louvre have been targeted by protesters.
Activists threw soup at the Leonardo da Vinci masterpiece in January, while members of the Just Stop Oil group used the same tactic on Vincent Van Gogh’s Sunflowers at London’s National Gallery in October 2022.
In the following month, campaigners glued themselves to Goya paintings in Madrid’s Prado museum.
A man has been arrested after objects were thrown at Nigel Farage as he went through Barnsley town centre on an open-top bus.
The Reform party leader was shaking his fist to acknowledge cheers from people below when something hit the side of the vehicle.
Mr Farage raised his arm as he spotted the object flying in – but it missed him.
Election latest – Tories launch election manifesto
Video then showed a man throwing another object from a construction site bin, before being bundled away by people in high-viz vests.
A man throws a cup towards Reform UK leader Nigel Farage. Pic: PA
Pic: PA
He ran off but was detained by police.
Mr Farage said he believed he was targeted by wet cement and a coffee cup.
“My huge thanks to South Yorkshire Police today,” he wrote on X.
“I will not be bullied or cowed by a violent left-wing mob who hate our country.”
Police officers led the man away. Pic: PA
Pic: PA
Police said a 28-year-old had been arrested on suspicion of public order offences and believe the suspect threw objects from a “nearby construction area”.
Read more:
All you need to know about Nigel Farage
The incident comes after a woman threw a milkshake over Mr Farage last week in Clacton in Essex – the constituency he will contest in the election.
Mr Farage changed his mind about standing in the contest and became Reform’s leader.
He’s aiming to become an MP on his eighth attempt.
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