Jeremy Hunt used his autumn statement to announce tax cuts, tighter welfare rules and further measures aimed at getting more people into work.
The speech, delivered to the Commons on Wednesday, is the Chancellor’s main opportunity outside the budget to make tax and spending announcements.
Mr Hunt used the statement to introduce changes aimed at reviving the UK’s struggling economy and the Tories’ election chances.
The Chancellor said the full package has 110 measures he hopes will boost growth.
Here is a summary of what has been announced:
Employee national insurance will be cut from 12% to 10% from January 6.
Two million self-employed will benefit from the axing of class two national insurance and a cut to class four national insurance to 8%, Mr Hunt said, which he said will save them about £350 a year.
But it comes after Mr Hunt froze thresholds for income tax, meaning that “fiscal drag” has meant that as people’s earnings have increased they have either been brought into tax for the first time or moved into higher bands.
Tighter welfare rules
Welfare recipients who do not get a job within 18 months will be forced to take on work experience under plans to get more people into employment, the Government had already announced.
Those who do not comply will have their benefits, including access to free prescriptions and legal aid, cut off.
Universal credit increase
The Government chose to raise universal credit by September’s 6.7% rate of inflation, despite speculation it could have based the increase on October’s lower rate of 4.6% to save money.
The standard multiplier for rates on high-value properties will increase in line with inflation, while the small business multiplier will freeze for a further year. The 75% rates discount for retail, hospitality and leisure will all be extended for another year.
Pensions will be increased by 8.5% in line with average earnings to £221 a week from April, maintaining the so-called “triple-lock” policy whereby the amount paid is whichever is highest out of average earnings growth, Consumer Price Index (CPI) inflation or 2.5%.
Savers could be given the right to pick the pension scheme their employer pays into, similar to the approach taken by countries like Australia, under proposals being put out to consultation.
A £320 million plan to help unlock pension fund investment for technology and science schemes was also announced.
The national living wage will rise by £1.02 to £11.44 from April, with the policy extended to cover workers aged 21 and over for the first time rather than 23 and over.
It means the lowest paid will receive a boost of £1,800 a year.
Full expensing – a scheme allowing companies to offset investment in machinery and equipment against their tax bills – will be made permanent, Mr Hunt said.
Alcohol and tobacco duty
Alcohol duty will be frozen until August 1 2024, meaning no increase in duty on beer, cider, wine or spirits, but duty on hand-rolling tobacco will rise by 10%.
Local housing allowance
The three-year freeze on the local housing allowance will end, Mr Hunt said. The Chancellor will increase the rate to 30% of local market rents, which he says will give 1.6 million households an average of £800 of support next year.
The Government is considering selling shares in NatWest to the general public in the coming year as it moves to offload its stake in the British bank, presenting the move as a way to get more people saving and investing.