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Policy & Public Affairs Updates

Mr Hunt has set out the Government’s response that aims to mitigate the impact of the short lived Truss Administration’s Budget in September, and the continued pressures caused by high energy and food prices.

The key measures in the Autumn Statement are:

  • Presenting a plan for stability, growth, and public services.
  • Tackling inflation to maximise pay cheques and savings, and avoid disruption to growth plans for business. This is a top priority
  • Cost Of Living

  • £26 billion support for the cost of living. This includes:
  • Continued support for energy bills
  • Rises of  10.1% for benefits and the State Pension
  • The largest ever increase in the National Living Wage
  • Equitable changes to taxation what will raise approximately £25 billion including:
  • An increase in the Energy Profits Levy
  • New tax on the very high profits of electricity generating companies
  • Spending decisions that will save £30 billion
  • NHS and Social Care will have access to £8 billion
  • Schools will receive an additional £2.3 billion
  • Infrastructure

  • Go-ahead on major infrastructure projects including Sizewell C and Northern Powerhouse Rail, and protecting the £20 billion R&D budget.
  • More than eight million homes with residents on means-tested benefits will get:
  • A payment of £900 towards cost-of-living, issued in instalments
  • An additional £300 going to to pensioners
  • An additional £150 for those claiming disability benefits
  • The Energy Price Guarantee will continue to support homes after April 2023 but the cap on energy bills will rise from £2,500 to £3,000. Prices will remain higher in 2023 so this means an average of £500 support for households across the year.
  • Living Wage

  • The Triple Lock will be protected which means pensioners will benefit from a rise in the State Pension and the Pension Credit, keeping it in line with inflation.
  • The National Living Wage will increase to £10.42 an hour. For a worker employed full-time this represents over £1,600 a year and will benefit 2 million of the UKs lowest paid workers.
  • Business

  • A £13.6 billion package of support for business rates payers in England. To protect businesses from rising inflation the multiplier will be frozen in 2023-24 while relief for 230,000 businesses in retail, hospitality and leisure sectors was also increased from 50% to 75% next year.
  • To help businesses adjust to the revaluation of their properties, which takes effect from April 2023, the Chancellor announced a £1.6 billion Transitional Relief scheme to cap bill increases for those who will see higher bills. This limits bill increases for the smallest properties to 5%.
  • Businesses seeing lower bills as a result of the revaluation will benefit from that decrease in full straight away, as the Chancellor abolished downwards transitional reliefs caps.
  • Small businesses who lose eligibility for either Small Business or Rural Rate Relief, as a result of the new property revaluations will see their bill increases capped at £50 a month through a new separate scheme worth over £500 million.
  • Public Services

  • To protect high-quality front-line public services, access to funding for the NHS and social care is being increased by up to £8 billion in 2024-25.
  • The schools budget will receive £2.3 billion of additional funding in each of 2023-24 and 2024-25.
  • All other departments will have their Spending Review settlements to 2024-25 honoured in full, with no cash cuts, but will be expected to work more efficiently to live within these and support the government’s mission of fiscal discipline.
  • To improve public finances, from 2025-26 onwards, day to day spending will increase more slowly by 1% above inflation, with capital spending maintained at current levels in cash terms. This means departmental spending will still be £90 billion higher in real terms by 2027-28, compared with 2019-20 while £30 billion of public spending will be saved.
  • To raise further funds, the Chancellor has introduced tax rises of £25 billion by 2027-28.
  • The threshold at which higher earners start to pay the 45p rate will be reduced from £150,000 to £125,140, while Income Tax, Inheritance Tax and National Insurance thresholds will be frozen for a further two years until April 2028.
  • The Dividend Allowance will be reduced from £2,000 to £1,000 next year, and £500 from April 2024 and the Annual Exempt Amount in capital gains tax will be reduced from £12,300 to £6,000 next year and then to £3,000 from April.
  • The threshold for employer National Insurance contributions will be fixed until April 2028, but the Employment Allowance will continue to protect 40% of businesses from paying any NICS at all.
  • In addition, the government is implementing the reforms developed by the OECD and agreed internationally to ensure multinational corporations pay their fair share of tax.
  • As confirmed in October, the main rate of Corporation Tax will increase to 25% from April 2023.
  • To ensure businesses making extraordinary profits as a result of high energy prices also pay their fair share, from 1st January 2023 the Energy Profits Levy on oil and gas companies will increase from 25% to 35%, with the levy remaining in place until the end of March 2028, and a new, temporary 45% levy will be introduced for electricity generators. Together these measures will raise over £55 billion from this year until 2027-28.
  • The Chancellor has introduced two new fiscal rules, that the UK’s national debt must fall as a share of GDP by the fifth year of a rolling five-year period, and that public sector borrowing in the same year must be below 3% of GDP. Overall, the Autumn Statement improves public finances by £55 billion by 2027-28, and the OBR (Office for Budget Responsibility) forecasts both of these rules to be met a year early in 2026-27.
  • Levelling up

  • He also recommitted to the £20 billion R&D budget and made numerous infrastructure commitments. Sizewell C nuclear plant will go ahead, with the EDF contract to be signed at the end of the month, providing reliable, low-carbon power to the equivalent of 6 million homes for over 50 years.
  • Plans for the second round of the Levelling Up Fund were confirmed, with at least £1.7 billion to be allocated to priority local infrastructure projects around the UK before the end of the year.
  • In further efforts to level up the UK, a new Mayor will be elected in Suffolk as part of a devolution deal agreed with Suffolk County Council, and the government is in advanced discussions on mayoral devolution deals with local authorities in Cornwall, Norfolk and the North East of England.
  • Many of today’s tax and spending decisions apply in Scotland, Wales and Northern Ireland. As a result of decisions that do not apply UK-wide, the Scottish Government will receive around an additional £1.5 billion over 2023-24 and 2024-25, the Welsh Government will receive £1.2 billion and the Northern Ireland Executive will receive £650 million.
  • From Thursday 17th, ratepayers in England will be able to see the future rateable value for their property and get an estimate of what their business rates bill may be from 1st April 2023 through the Find a Business Rates Valuation Service.
  • With thanks to Randall’s Monitoring for their report on the Autumn Statement. HAE EHA will share further information when the details of the Budget bundle has been reviewed.

    Policy and Public Affairs Update for HAE EHA Members 27th October 2022

    Rishi Sunak Becomes the New UK Prime Minister and Appoints his Cabinet.

    Rishi Sunak MP formally took on the role of UK Prime Minister after being appointed by King Charles III on Tuesday 25th October, replacing Liz Truss who who resigned after only 49 days in office. The other MPs in the running, Boris Johnson and Penny Mordaunt, were unable to acquire sufficient public nominations.

    Mr Sunak has appointed a new Cabinet and team of departmental ministers, with some experienced ministers returning to previous roles and others in new coordinating roles. A full Government list can be found here, which is being updated as appointments are being made.

    The Full Autumn Statement and Medium-Term Fiscal Plan and publication of the Office of Budget Responsibility (OBR) analysis, originally scheduled for 31st October, have been moved to 17th November. This will allow time for the new Prime Minister, a former Chancellor of the Exchequer, to have some input into the financial measures under consideration.

    Policy and Public Affairs Update for HAE EHA Members 20th October 2022

    Liz Truss Steps Down as Prime Minister. Following building pressure from Tory MPs, Liz Truss has stepped down as Prime Minister and leader of the Conservative party. The resignation means she becomes the shortest serving Prime Minister in UK history.

    Liz Truss will remain PM until a successor has been chosen, with a leadership election taking place in the coming week. Further announcements will be made over the next few days.

    The full resignation speech can be found here.

    Policy and Public Affairs Update for HAE EHA Members 27th September 2022

    On Friday 23rd September Chancellor of the Exchequer, Kwasi Kwarteng, announced a ‘Growth Plan’, which aims to tackle high energy costs and inflation, and increase productivity and wages. The full speech can be read here.

    The proposals are extensive, covering improvements to living standards, public services, energy savings for homeowners, and new Stamp Duty exemptions. There are also measures to help businesses and boost construction that will, directly and indirectly, benefit equipment hire companies.

    These include:

  • the basic rate of Income Tax reduced 19% in April 2023 so 31 million people will earn on average £170 more per annum
  • the zero-rate band of Stamp Duty rising from £125,000 to £250,000, meaning 200,000 more homebuyers per year will be exempt. This will save people around £2,500 and is expected to generate a boost in construction work on home improvement projects.
  • further increases in construction work as more surplus government land is given over for new homes
  • Corporation Tax will remain at 19%, and the 1.25% rise in National Insurance contributions will be reversed generating savings of up to £10,000 for more than 900,000 businesses in 2023, encouraging recruitment and boosts to productivity
  • the Annual Investment Allowance set permanently at £1 million, rather than returning to £200,000 so, businesses investing in plant and machinery will continue to receive 100% tax relief up to this increased amount
  • 38 local authorities in England to create Investment Zones at certain locations in their territories, releasing more land for the construction of new homes and businesses including offices, retail, and leisure centres
  • removing time-consuming restrictions on new energy, road, and rail construction projects; consent for major infrastructure projects currently takes 65% longer to be granted than it did in 2012. The new legislation will mean new roads and offshore wind farms will be faster to plan and build
  • In addition to these UK-wide announcements, the change to Income Tax and Stamp duty will mean over £600 million in funding for the Scottish Government and approximately £70 million received by the government of Wales.

    Click here for the full article and to read the UK Growth Plan Measures for Homeowners and Individuals.

    On Wednesday 23rd November the Chancellor will make a follow-up statement about the Medium Term Fiscal Plan and outline a forecast from the Office of Budget Responsibility. A HAE EHA news report will cover this, disseminating the relevant points.

    If you have questions or concerns about the Chancellor’s Growth Plan you can contact HAE EHA Public Affairs Manager Mark Bradshaw on 0121 380 4621.

    Policy and Public Affairs Update for HAE EHA Members 22nd September 2022

    Support Package Announced to Help Businesses with Rising Energy Costs

    On the 8th September Prime Minister Liz Truss announced that businesses would receive the same levels of support with energy costs as that offered to households. The new Energy Bill Relief Scheme (EBRS) ensures discounted rates on wholesale electricity and gas prices for businesses in the UK; similar to the Energy Price Guarantee covering domestic households.

    Relief packages will apply from 1st October 2022 with savings shown in energy bills for that month, which are usually issued from November onwards.

    For businesses across the UK, including Northern Ireland, this means:

  • electricity at £211 per megawatt hour (compared with the expected wholesale cost of £600)
  • gas at £75 per megawatt hour (compared with the expected wholesale cost of £180)
  • The EBRS applies to energy contracts agreed on or after 1st April 2022 and will end on 31st March 2023. The support is automatically applied to energy bills, no application process is required.

    Savings are also available for businesses that use alternatives to gas, such as diesel or heating oils, important for the hire sector as many depots and other premises are powered by non-grid fuelsThere is some information here, more on this will be provided soon. Hire businesses in Northern Ireland may reach out to Invest NI for specialist advice on becoming more energy efficient.

    If you have questions about the proposed support scheme contact HAE EHA Public Affairs Manager Mark Bradshaw on 0121 380 4621.

    Policy and Public Affairs Update for HAE EHA Members 8th September 2022

    Government Announces Energy Help for Businesses

    The new UK Prime Minister Liz Truss has announced that businesses will see their energy costs capped at the same price per unit, or kilowatt hour (kWh), that households will pay under the government’s new plans.

    The scheme will run for six months (in contrast to two years for domestic customers) although this will be reviewed in three months’ time to see if the help should be more targeted towards certain industries, giving businesses certainty. It could then be extended for vulnerable businesses.

    The PM said: “We will provide support to vulnerable sectors”, adding that the Business Secretary will work with businesses to review where this should be targeted, to make sure support goes to those most in need.

    The ban on fracking (shale gas extraction) in England will be lifted, and there is a new joint Treasury/Bank of England funding support package for the energy sector.

    The Chancellor of the Exchequer will make a Fiscal Statement later in September. Details of the support for businesses can be found here.

    Policy and Public Affairs Update for HAE EHA Members 8th September 2022

    Prime Minister Liz Truss Shapes New Cabinet

    Following her victory in the Conservative Party leadership election, Liz Truss MP was confirmed as UK Prime Minister. Ms Truss has carried out a major reshuffle, removing many of the cabinet-rank ministers serving under the previous PM. There is now an ongoing process to appoint middle rank and junior ministers across the government departments.

    A couple of observations. There are at least six senior ministers of state who will attend cabinet meetings – adding senior capacity to several departments. The new PM has appointed ministers to a single department and not to two or more departments, as many roles were previously cross-cutting. This should simplify back office administration and accountability, but may also impact on cooperation between departments, for example home affairs and justice or business and education.

    As the appointment of new ministers is ongoing, the most up-to-date Ministerial Appointments List is available on Randall’s, HAE EHA’s parliamentary monitoring partner, will prepare a more in-depth analysis which we will share when available.