Jeremy Hunt is preparing his autumn statement, which is expected to focus on tax cuts and economic growth. Photo: N10-5152
Jeremy Hunt will unveil his biggest business tax cut in half a century on Wednesday, with stimulating economic growth at the heart of his autumn announcement.
The Chancellor will permanently extend “full costs”, allowing companies to claim back costs. up to 25p for every pound invested, which was due to end in March 2026.
The Treasury was keeping a close eye on Tuesday night to see exactly which personal tax cuts would be unveiled in a statement. National insurance is expected to be cut, pushing the population up to 28 million, while income tax cuts are also being considered.
He argues that the economy has changed now that inflation has halved. This year the Chancellor will say: “In today's Autumn Statement on Growth, the Conservatives will reject big government, high spending and high taxes because we know this leads to less growth, not more growth.
“Instead, we will support UK businesses with 110 growth measures to cut planning red tape, speed up access to the national grid, support entrepreneurs raising capital, support our fastest growing industries, open up foreign direct investment, boost productivity, reform the welfare system, expand opportunities in every corner of the country and reduce taxes for business.”
The speech will mark a significant shift in economic approach during Rishi Sunak's premiership, with the focus shifting from controlling rising prices to boosting flagging economic growth.
It is also an attempt to revive the Conservative Party's political fortunes. Labor is still ahead in the polls by around 20 percentage points, despite a number of recent attempts by the Prime Minister to reset his premiership.
The package, which will be delivered to the House of Commons at around 12.45pm, could be the penultimate set of tax and spending announcements before the general election expected next autumn.
There will be noticeable changes to the welfare system, making it more difficult to obtain sick benefits without looking for work, curbs on government spending and pension reforms. Under Mr Hunt's plans, the national living wage would rise by more than a pound to £11.44 an hour from next April, giving support to almost three million of the poorest workers.
But many are expected to voters and Tory MPs will be watching to see what taxes Hunt and Sunak decide to cut after both men pledged to do so in recent days.
The move will cost £10 billion a year.
The full cost recovery scheme, which allows companies to claim back money they have invested in the UK, such as in factories or equipment, was introduced in the spring and was due to run until the end of March 2026.
The Telegraph reported this month that Mr Hunt was determined to expand the scheme and now understands it will become permanent on Wednesday. This would cost around £10 billion a year.
Mr Hunt will mark the move as the biggest business tax cut in modern history. The claim is based on an analysis of a Treasury database dating back to 1970.
Think tank experts had previously questioned whether the move would produce results. costs will be lower given the acceleration in economic growth – a debate likely to unfold in the coming days.
Companies are also pushing for an extension to business rates cuts, which will end next spring when the government talks about tax cuts recent days offer hope.
Mr Hunt will say: “Following the global pandemic and energy crisis, we have made difficult decisions to get our economy back on track. We supported families with rising bills, reduced borrowing and halved inflation.
“The economy has grown. Real incomes have increased. Our plan for the British economy is working. But the work is not finished. Conservatives know that a dynamic economy depends not so much on the decisions and dictates of ministers, but on the energy and enterprise of the British people.
Recent Comments