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Millions more Britons will pay more tax as Jeremy Hunt cut the top-rate threshold and announced freezes on several other taxes in his autumn statement.

The total amount of savings from the autumn statement has been costed at £55bn, through tax rises and cutting government spending.

However, in real-term costs, UK households’ disposable incomes will fall by 7.1% over the next two years – the lowest levels since records began in 1956/7, taking incomes down to 2013 levels, according to the independent Office for Budget Responsibility.

Britons face ‘staggering’ fall in disposable income – live autumn statement updates

Some of the main announcements:

• Higher rate of tax threshold reduced to £125,140
• Benefits and state pension to rise in line with inflation
• Windfall tax extended to March 2028 and increased to 35%
• Electric cars no longer exempt from road tax from April 2025
• An extra £2.4bn per year on schools
• NHS to get £3.3bn and adult social care £1bn next year and £1.7bn in 2024
• Freeze on income tax personal allowance, national insurance and inheritance tax thresholds
• Minimum wage increases to £10.42 an hour
• Social housing rent increases capped at 7% from next year.

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Key announcements from the autumn statement

Jaw-dropping change of tack by Jeremy Hunt – analysis

More on Autumn Statement 2022

The chancellor said the government is introducing two new fiscal rules: that underlying debt must fall as a percentage of GDP by the fifth year in a rolling five-year period: and public sector borrowing over the same period must be below 3% of GDP.

He said he had “tried to be fair” in his decisions by asking those “with more to contribute more” and avoided tax rises that “most damage growth”.

Mr Hunt promised to “protect the vulnerable” and said his plan to plug what he previously called a fiscal “black hole” will lead to “a shallower downturn and lower energy bills”, while revealing his three priorities: “stability, growth and public services”.

But opposition parties and unions have accused the chancellor of holding the country back, with Labour saying the plan means “working people are paying the price” for the Tories’ “failure”.

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’12 weeks of Conservative chaos’

Higher tax rates for the wealthiest and energy companies

The chancellor said the 45p higher rate of tax will now be payable from £125,140, as opposed to the current £150,000.

He said those earning £150,000 or more will now pay just over £1,200 more a year.

Mr Hunt also expanded and increased the windfall tax, so from 1 January 2023 until March 2028 energy giants will have to pay 35%, instead of the current 25% on their profits.

And there will be a temporary new 45% levy on electricity generators, which is in addition to the tax on the companies that provide energy to households and businesses.

He also said electric car owners will no longer be exempt from vehicle excise duty from April 2025.

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And he announced the government, as expected, will proceed with the building of the new Sizewell C nuclear plant in Suffolk, which will create 10,000 highly skilled jobs and provide energy to the equivalent of six million homes over 50 years.

However, there was no mention of fuel duty in the statement, as the law means it goes up by the Retail Price Index – which is set to be 23% in March next year.

The OBR said that would add £5.7bn to the government coffers and would be a “record cash increase” and the “first time any government has raised fuel duty rates in cash terms since 1 January 2011, with an expected rise of around 12p a litre on petrol and diesel.

It is understood the government is not making a decision on fuel duty now but will in the spring budget next year.

Extra cash for schools and the NHS

Much of the chancellor’s statement had been pre-briefed following the economic turmoil the mini-budget created after his predecessor announced surprise unfunded tax cuts.

But Mr Hunt did pull a rabbit out of his hat as he announced an extra £2.3bn each year will be invested in schools for the next two years.

As was expected, he increased the NHS budget by £3.3bn and said he has asked former Labour health secretary Patricia Hewitt to advise on how to make sure the new Integrated Care Boards work properly. They were introduced in April and are aimed at bringing NHS services in local areas together.

Adult social care will get £1bn more next year and £1.7bn in 2024 and he said altogether, along with previous commitments, that means the government is committing to a “record £8bn” package for the health and social care system.

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‘£8bn package for health and social care’

‘Stealth taxes’

There will be a freeze on income tax personal allowance, the main National Insurance thresholds and inheritance tax thresholds for a further two years, until April 2028.

These have been branded “stealth taxes”, with the freeze on income tax to bring in £6.8bn for the government as more people will be pushed into a higher tax bracket.

On personal income allowances, he said the dividend allowance will be cut from £2,000 to £1,000 next year then to £500 from April 2024.

The annual exempt amount for capital gains tax, which is paid on the profit of selling an asset that has increased in value such as property, will also be cut from £12,300 to £6,000 next year then to £3,000 from April 2024. It means people will have to pay tax at a lower threshold than before.

Cost of living and minimum wage help

On help for energy bills, Mr Hunt said the Energy Price Guarantee will continue for a further 12 months from April 2023 at a higher level of £3,000 per year for the average household. It is currently capped at an average of £2,500.

There will also be additional cost of living payments next year for the most vulnerable, with £900 for households on means-tested benefits, £300 for pensioner households and £150 for those on disability benefits.

Social housing rents will have their increases capped at a maximum of 7% in 2023-24, he added.

And the hourly minimum wage will increase by 9.7% from April next year to £10.42 from the current £9.50.

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Energy price cap to rise again in 2023

Pensions and benefits rise

Mr Hunt committed to maintaining the triple lock on pensions, which promises to increase the state pension each year in line with the highest of inflation, average earnings or 2.5%. At the moment, that is inflation which reached a 41-year high on Wednesday of 11.1%.

From April, pensions will rise in line with inflation of 10.1%, meaning an £870 annual increase.

Benefits will also rise in line with inflation while a further 600,000 people on Universal Credit will be made to meet with a work coach to get more people into the workforce and in better-paid jobs.

Defence and overseas aid

Defence Secretary Ben Wallace had previously said he would quit if the government did not stick to spending 3% of GDP on defence by 2030.

He has tempered his tone since as the economy dived but will have been disappointed by Mr Hunt announcing he is committing to “at least 2%”.

On overseas aid, the chancellor said it will remain at 0.5% as he said the “significant shock to public finances” means it will not be possible to return to the 0.7% target.

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UK ‘moving at glacial pace’ on national plan for defending foreign attack, say MPs

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UK 'moving at glacial pace' on national plan for defending foreign attack, say MPs

The UK lacks a national plan to defend itself from attack and is moving at a “glacial” pace to fix the problem despite threats from Russia and China, a report by MPs has warned.

With the whole country needing to understand what it means to be ready for war, the Defence Select Committee also said it had seen no sign of a promised “national conversation on defence and security” that was launched by Sir Keir Starmer in June.

Sky News and other journalists were even blocked on Monday from interviewing sailors aboard HMS Prince of Wales, the Royal Navy’s flagship aircraft carrier, in direct contrast to the prime minister’s stated aim of greater engagement.

Royal Navy aircraft carrier HMS Prince of Wales. File pic: AP
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Royal Navy aircraft carrier HMS Prince of Wales. File pic: AP

Public needs to know ‘what to expect’ from war

“We have repeatedly heard concerns about the UK’s ability to defend itself from attack,” said Labour MP Tan Dhesi, chair of the committee.

“Government must be willing to grasp the nettle and prioritise homeland defence and resilience.

“In achieving this, government cannot shy away from direct engagement with the public.

“Wars aren’t won just by generals, but by the whole of the population getting behind the Armed Forces and playing our part.

“There needs to be a co-ordinated effort to communicate with the public on the level of threat we face and what to expect in the event of conflict.”

The Royal Navy tracked a Russian submarine in UK waters last month.  Pic: Royal Navy/MOD
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The Royal Navy tracked a Russian submarine in UK waters last month. Pic: Royal Navy/MOD

‘The Wargame’ made real?

The findings of the report support a podcast series by Sky News and Tortoise Media called The Wargame – released in June.

It simulated a Russian attack on the UK and played out what the impact might be for the country in the absence of a credible, resourced and rehearsed national defence plan – something Britain maintained rigorously during the Cold War.

Sky News first revealed in April 2024 that the previous government no longer had such a plan, though work was under way to develop one.

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Flagship aircraft carrier to be placed under NATO command

Report’s assessment of war-readiness

The Defence Select Committee report – based on a nearly year-long inquiry – found: “The UK lacks a plan for defending the homeland and overseas territories with little progress on the Home Defence Programme.”

It said this meant the government was failing to meet a fundamental commitment to the NATO alliance – the Article 3 requirement to maintain the “capacity to resist armed attack”.

The report quoted Luke Pollard, a defence minister, acknowledging that “we have been very clear that we are not satisfied with Article 3 in the UK”.

Britain's new Ajax fighting vehicle, which arrived overdue and at great financial cost. Pic: PA
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Britain’s new Ajax fighting vehicle, which arrived overdue and at great financial cost. Pic: PA

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Yet the MPs’ report added: “Despite this recognition from government… measures to remediate seem to be moving at a glacial pace.”

It said: “Cross-government working on homeland defence and resilience is nowhere near where it needs to be. The government has said repeatedly that we are in an era of new threat, yet decision-making is slow and opaque.”

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The rebuke from the MPs was published as John Healey, the defence secretary, prepares to announce that 13 sites across the UK have been identified as possible locations for at least six new weapons factories.

“This is a new era of threat,” he will say at a speech in Westminster later.

“We are making defence an engine for growth, unambiguously backing British jobs and British skills as we make the UK better ready to fight and better able to deter future conflicts.

“This is the path that delivers national and economic security.”

Industry will be invited to submit proposals to produce ammunition and explosives, with the Ministry of Defence saying it hopes work on the first factory will begin next year.

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Ultra-processed foods leading cause of ‘chronic disease pandemic’, say experts

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Ultra-processed foods leading cause of 'chronic disease pandemic', say experts

Ultra-processed foods (UPFs) are a leading cause of a “chronic disease pandemic” linked to worsening diets, experts have warned.

UPFs include items such as processed meats, some ready meals and cereals, ice cream, crisps, biscuits, mass-produced bread and fizzy drinks.

They often contain a high level of saturated fat, salt and sugar – as well as additives such as sweeteners and preservatives.

UPFs leave less room for more nutritious foods and are also believed to negatively affect gut health.

Forty-three scientists and researchers have now sounded the alarm and accused food companies of putting “profitability above all else”.

Writing in The Lancet, they said the firms’ economic and political power is growing and “the global public health response is still nascent, akin to where the tobacco control movement was decades ago”.

They warned that while some countries have brought in controls on UPFs, policy is lagging due to “co-ordinated efforts of the industry to skew decision-making, frame policy debates in their interest, and manufacture the appearance of scientific doubt”.

Professor Chris Van Tulleken, from University College London, one of the authors, said obesity and diet-related disease had increased in line with a “three-decade history of reformulation by the food industry”.

“This is not a product level discussion. The entire diet is being ultra-processed,” he warned.

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However, several experts not involved with the article urged more research, cautioning that existing studies had shown a link with poor health and UPFs but not established causation.

Kate Halliwell, chief scientific officer at the Food and Drink Federation (FDF), which represents the industry, said companies had made a “series of changes over many years to make the food and drink we all buy healthier, in line with government guidelines”.

She said FDF-member products now contained a third less salt and sugar and a quarter fewer calories than in 2015.

Previous studies cited by the British Heart Foundation have linked UPFs to a greater risk of heart disease, stroke, and early death.

A 2023 meta analysis in the PubMed journal said evidence suggested an association between UPF intake “and the risk of overall and several cancers, including colorectal, breast and pancreatic cancer”.

Get cancer symptoms checked, charity urges

It comes as Cancer Research UK warned too many Britons are putting off getting potential symptoms checked.

A poll for the charity suggested the top reasons people delay getting potential signs of cancer checked is because of a lack of GP appointments, or thinking their symptoms might not be serious.

More than half (53%) of the 6,844 surveyed said they were put off as they believed getting seen would be difficult, while 47% said they actually had found it difficult to get an appointment.

Some 44% put it off as they though the symptom wasn’t serious, 41% believed they could manage things themselves, and 40% didn’t want to be seen as making a fuss.

Cancer Research UK said it had now trained Tesco pharmacists to spot possible cancer signs – and that people can speak to them in private if they needed.

The pharmacists will be able to give advice on next steps and whether a GP appointment is recommended.

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Scotland secure men’s World Cup spot for first time since 1998 after beating Denmark

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Scotland secure men's World Cup spot for first time since 1998 after beating Denmark

Scotland secured a place at the men’s World Cup for the first time since 1998 as stoppage-time goals by Kieran Tierney and Kenny McLean secured a thrilling 4-2 win over Denmark at Hampden Park.

Scott McTominay’s spectacular third-minute bicycle kick had given the hosts a half-time lead.

Rasmus Hojlund equalised for the Danes in the 57th minute shortly before Rasmus Kristensen was sent off, but Lawrence Shankland restored Scotland’s advantage.

When Patrick Dorgu brought Denmark level again with nine minutes remaining, it seemed they would claim the point needed to top the group and book their place at next year’s tournament in the US, Canada, and Mexico.

However, Tierney fired an unstoppable shot past Kasper Schmeichel in the third minute of stoppage time

And then, with the Denmark goalkeeper up in attack at the other end of the pitch, McLean hit a long-range effort from his own half to spark delirious scenes.

Scotland's Kenny McLean celebrates scoring his side's fourth goal against Denmark. Pic: PA
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Scotland’s Kenny McLean celebrates scoring his side’s fourth goal against Denmark. Pic: PA

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The victory saw Scotland top Group C and secure automatic qualification for the 2026 World Cup.

Head coach Steve Clarke had already led his country to back-to-back European Championships.

He told the BBC: “Scott McTominay scored the best overhead kick I’ve ever seen, and it might not have been the best goal of the night!”

Scott McTominay celebrates scoring the opening goal for Scotland. Pic: Reuters
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Scott McTominay celebrates scoring the opening goal for Scotland. Pic: Reuters

Scotland captain Andy Robertson dedicated the victory to his former Liverpool teammate Diogo Jota, who died earlier this year in a car accident.

He told the BBC: “We certainly put the country through it, but I’m sure it will be worth it.”

“I couldn’t get my mate Diogo Jota out of my head today,” he added. We spoke so much together about the World Cup. When he missed out in Qatar through injury and I missed out when Scotland never went.

“We always discussed what it would be like going to this World Cup. I know he’ll be somewhere smiling over me tonight.”

The draw for the 2026 World Cup will take place in Washington on 5 December.

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