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<\/p>\nJeremy Hunt’s swingeing tax cuts are set to include a National Insurance reduction for some 28 million taxpayers, according to reports.<\/p>\n
The Chancellor’s autumn statement, due to be made on Wednesday, will feature a reduction in the headline rates of national insurance for both employees and the self-employed.<\/p>\n
A one per cent cut would be worth \u00a3380 a year to someone earning more than \u00a350,000 – but could cost the government somewhere in the region of \u00a35billion.<\/p>\n
The reports, first made in The Times, also suggest that a \u00a310billion-a-year tax break is on the horizon for companies investing in equipment and technology in a bid to lure investment into Britain.<\/p>\n
Significant increases in benefits and the state pension in line with September’s higher rate of inflation are also among the announcements set to be made – kiboshing suggestions that he would use the lower October rate as a baseline.<\/p>\n
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The Chancellor, Jeremy Hunt, prepares for the 2023 Autumn Statement at 11 Downing Street<\/p>\n
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A National Insurance cut is on the horizon – expected to return \u00a3380 a year to someone earning over \u00a350,000<\/p>\n
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HM Treasury photos show the Chancellor preparing for the Autumn Statement with staff<\/p>\n
The cut has reportedly been considered because it directly affects those who are working; some benefits, including\u00a0Jobseeker\u2019s Allowance, are not subject to income tax.\u00a0<\/p>\n
At present, employed people earning between \u00a312,570 and \u00a350,000 a year pay 12 per cent National Insurance on their earnings; self-employed people pay nine per cent. Those on more than \u00a350,000 pay two per cent on the remaining earnings.<\/p>\n
It came as the Treasury announced plans to increase the National Living Wage by more than a pound an hour from next April.<\/p>\n
The rate – which will also be extended to 21-year-olds for the first time\u00a0 – will rise from \u00a310.42 to \u00a311.44.<\/p>\n
National minimum wage for 18 to 20-year-olds will also increase by \u00a31.11 to \u00a38.60 per hour, the Government has said.<\/p>\n
Apprentices will have their minimum hourly rates boosted, with an 18-year-old in an industry like construction seeing their minimum hourly pay increase by over 20 per cent, going from \u00a35.28 to \u00a36.40 an hour.<\/p>\n
Mr Hunt said: ‘Next April all full-time workers on the National Living Wage will get a pay rise of over \u00a31,800-a-year. That will end low pay in this country, delivering on our manifesto promise.<\/p>\n
‘The National Living Wage has helped halve the number of people on low pay since 2010, making sure work always pays.’<\/p>\n
Mr Hunt will use some ‘headroom’ from higher-than-predicted revenues and dipping inflation to start reducing the burden.<\/p>\n
However, while there will be a drive to get millions of people off benefits and back to work, ministers have retreated from suggestions handouts will be uprated by less than the September inflation number normally used.<\/p>\n
The triple lock on state pensions is also set to be maintained, meaning recipients are in line for an 8.5 per cent increase.<\/p>\n
Despite the bullish approach, the grim context for the fiscal announcements was laid bare this morning with official figures showing the UK’s debt mountain at \u00a32.6trillion.<\/p>\n
Public sector net borrowing stood at \u00a314.9billion last month, \u00a34.4billion more than a year earlier and the highest on record outside of Covid.<\/p>\n
Bank of England governor Andrew Bailey appeared to play down worries that tax cuts could fuel inflation today, stressing that the Treasury watchdog will give a verdict on the numbers – unlike with Liz Truss’s mini-Budget.<\/p>\n
While insisting he could not ‘speculate’ on what was coming in the Autumn Statement, Mr Bailey said: ‘The big difference between tomorrow and what happened a year ago is that the OBR is involved.’<\/p>\n