Autumn statement 2023 live updates: Labour stances on new Tory policies

The Chancellor Jeremy Hunt unveiled his autumn statement in parliament today, setting out a budget and new policy announcements that could become key Conservative-Labour dividing lines in the run-up to the general election.

Labour’s Shadow Chancellor Rachel Reeves then set out the opposition’s response, seeking to undermine Tory reset efforts after “13 years of economic failure” and laying out why Labour is “the party of business”.

LabourList will be keeping tabs throughout the day on both major new Tory policies and crucially what Labour’s responses are, rounding them up below as we hear the latest updates.

Employee National Insurance cut

Hunt announced that the government will cut the rate of employee National Insurance by two percentage points, from 12% to 10%. The Chancellor said he would bring forward urgent legislation to introduce the change from January 6th 2024.

In her response, Reeves highlighted the Tories’ decision to increase National Insurance contributions last year, telling MPs: “It was a tax on working people, and we opposed it for that very reason.”

The Shadow Chancellor said she has “long argued that taxes on working people are too high”, adding: “From their failure to uprate income tax or National Insurance bands, to forcing councils to raise council tax, the Conservatives have push the costs of their failure onto others.”

She told MPs that, before today’s statement, the government had put in place tax increases “worth the equivalent of a 10p increase in National Insurance”, adding: “Today’s 2p cut will not remotely compensate for the tax increases already put in place.”

Class 2 National Insurance axed for self-employed

Hunt revealed that the government will axe class 2 National Insurance contributions for self-employed people and reduce the main rate of class 4 contributions from 9% to 8% – in changes the government said would benefit two million people.

We have approached Labour for comment on this policy announcement. Labour’s final National Policy Forum document did not mention National Insurance, but Reeves has signalled that she does not want to raise taxes on working people.

“Back to work plan” launched

Hunt confirmed the launch of a “back to work plan”, which he said will include reform of the fit note process, changes to the work capability assessment and support for people with health conditions to find work.

He added that jobseekers will be required to take part in a mandatory work placement if after 18 months of support they have not found a job. He also said, if jobseekers choose not to engage for six months, their case will be closed and their benefits stopped.

Prior to today’s statement, it was reported that Hunt would launch the plan, pledging £2.5bn of funding over five years for employment support schemes.

Reeves told the Commons today that “if we are going to grow the economy, we must get more people into work”, adding: “People who can work should work.” She noted that Labour has argued previously that the work capability assessment needs replacing, saying that it is “discouraging people from seeking work”.

But she argued that there is a “wider problem” that the government is “failing to face up to”, saying Britain is the only country in G7 where the employment rate is not back to pre-pandemic levels due to an increase in the number of people out of work due to long-term health issues.

She declared that “a healthy nation is critical to a healthy economy”, adding: “The best way to get people back to work is to get our NHS working, but the reality is you can never trust the Tories with our NHS.”

Responding last week following the plan’s initial announcement, Shadow Work and Pensions Secretary Liz Kendall said: “This poor excuse of a proposal does nothing to fundamentally change the state of our health service or our Jobcentres after a decade of failure from the Tories.”

Minimum wage increase

It was confirmed on Tuesday that the minimum wage will increase to £11.44 per hour from April next year – up from its current level of £10.42 an hour for over 23-year-olds. The rate will also apply to 21- and 22-year-olds for the first time. The minimum wage for this age group is currently set at £10.18 an hour.

Younger workers will also see their pay increase, with the minimum wage for 18-20-year-olds rising to £8.60 an hour from £7.49, while apprentices’ wages will increase from £5.28 to £6.40 an hour.

The Chancellor accepted the recommendations of the Low Pay Commission – which advises the government on the minimum wage – in full.

Reeves said it was welcome that Hunt had accepted the commission’s recommendations but added: “The reality is of the Conservatives’ record that average wages for working people have been held back.”

She stressed that it also “important to recognise that the living standards of working women have also been held back” by a gender pay gap she said she was “determined to close”.

Labour has previously committed to “make sure the minimum wage is a real living wage” by changing the Low Pay Commission’s remit so that alongside median wages and economic conditions, the minimum wage reflects the need for pay to take into account the cost of living.

The party has also pledged to remove “discriminatory” age bands to ensure every adult worker benefits.

Planning reform

Hunt announced that local authorities will be able to recover the full costs of planning applications in return for meeting deadlines. Other measures announced included funding to deliver nutrient mitigation schemes and the allocation of £450m to a third round of the Local Authority Housing Fund.

The Chancellor set out plans to speed up construction of new grid infrastructure, including new proposals for “community benefits”, with up to £10,000 off electricity bills.

Reeves declared that the Tories are “following Labour’s lead” on providing money off bills for communities that host grid infrastructure, as well as on speeding up planning decisions, adding: “What’s taken them so long?”

‘Full expensing’ tax break made permanent

Hunt told MPs that ‘full expensing’ – a tax break for companies that enables them to deduct spending on new machinery and equipment from profits – would be made permanent, which he described as “the largest business tax cut in modern British history”.

Reeves welcomed the decision to make full expensing permanent but added: “That doesn’t make up for the years of uncertainty that businesses have faced, with taxes going up and down like a yo-yo.”

She said Labour’s “partnership with business” will “get our economy firing on all cylinders”, highlighting the launch this week of the party’s new British infrastructure council and its plans for a new national wealth fund.

Cost-of-living measures

Hunt announced four measures that he categorised as further cost-of-living support: confirming that Universal Credit and other benefits would be increased in line with the September inflation figure of 6.7% (as is customary); increasing local housing allowance rates; freezing alcohol duty until August 1st 2024; and increasing the state pension by 8.5%.

Reeves said during her response: “If you listen to the benches opposite, you would believe that the cost-of-living crisis was behind us.” She noted that inflation is still double the Bank of England’s target rate.

She continued: “Everything might look a little bit better 10,000ft up in your helicopter, but down here on planet earth people are approaching Christmas and the year ahead with worry and trepidation. The cost-of-living crisis has hit us harder because Tory mismanagement has left us so exposed.”

Support for communities affected by Israel-Gaza conflict

The Chancellor announced that up to £7m will be provided over three years to organisations like the Holocaust Educational Trust. £3m of additional funding that the government has provided to the Community Security Trust will also be maintained in 2024-25.

Reeves welcomed the additional funding, telling MPs: “There is no place for hate in our society, and I know that across the House we will work together to eliminate it.”

More to follow.