Chancellor Jeremy Hunt has presented the government's autumn budget, outlining new devolved powers for Surrey as well as key tax and spending measures, along with a worse-than-expected economic forecast.
One of the headline announcements outlined by the South West Surrey MP in the House of Commons on Wednesday afternoon – aside from an opening 'happy birthday' for his wife Lucia – was the reduction in National Insurance paid by employees from 12 per cent to 10 per cent, set to take effect from January 6.
Currently applied to earnings between £12,571 and £50,271 at a rate of 12 per cent, with an additional two per cent on income beyond that threshold, the cut aims to put more money back into the pockets of working individuals.
For the average worker earning £35,400 a year, that amounts to an over £450 annual tax cut.
However, not everyone is convinced of the budget's merits. The Labour Party contends that the tax cut fails to adequately offset existing hikes, expressing scepticism about its impact on the financial well-being of citizens.
Economic forecasts also took centre stage in Mr Hunt's statement, revealing a revised growth projection. The economy is now expected to grow at a slower rate than previously thought, with a forecast of 0.7 per cent for the next year, down from the earlier estimate of 1.8 per cent.
The Chancellor announced an 8.5 per cent increase in the state pension from April 2024, bringing it to £221.20 per week. This move honours the triple lock commitment, providing pensioners with a boost in their income.
In line with September's inflation rate, universal credit and disability benefits will see a 6.7 per cent increase. However, the decision to tie the adjustment to September's rate rather than the lower October rate has generated discussions about the government's approach to benefit calculations.
The autumn budget also included measures aimed at encouraging welfare recipients to find employment. Individuals who fail to secure a job within 18 months will be required to undertake work experience. Furthermore, those who neglect to actively search for employment over a six-month period may face the cessation of their benefits, cue fierce heckling from the opposition benches.
Mr Hunt's budget statement also made permanent a tax break for businesses, allowing them to save on corporation tax through strategic investments. This move is expected to stimulate business activity and contribute to the overall economic recovery.
County Deal for Surrey
While a headline for Surrey was the announcement of a 'County Deal' devolution agreement for the county. This will see the devolution of the adult education budget, alongside new powers over economic development, transport and housing in the county.
Areas without an elected mayor, such as Greater Manchester, had previously been denied 'County Deals' – and Surrey was overlooked for such a deal in 2022.
But the government devolution agenda has since been broadened to include areas without an elected mayor, with Surrey, Lancashire and Cornwall the latest areas to be handed County Deals.
The agreement will see Surrey County Council exercise greater control over the setting of budgets and priorities for public services in the county.
Surrey County Council leader, and chairman of the County Councils Network (CCN), Tim Oliver, said: "The Levelling Up White Paper heralded a new drawn for devolution in England, putting county authorities in the driving seat of securing greater powers and flexibilities for non-metropolitan areas.
“Further progress on securing mayoral deals in Greater Lincolnshire and Hull and East Riding are welcome developments, with the Chancellor also confirming that county areas willing to adopt this model will benefit from new ‘level 4’ powers and funding.
“However, many counties are unsuitable for a directly elected mayor or leader, preventing devolution of further powers over skills, economic development and transport. Today’s announcement finally opens the door for whole new wave of councils to secure the tools they need support local growth. In particular, the devolution of adult education budgets will allow us to help tackle declining participation, and develop a skilled workforce to drive the growth this country needs.
“CCN will now work closely with government, our member councils and local partners to secure as many new deals as possible before the next general election. While we recognise the more limited range of non-mayoral powers and funding, we hope to secure ambitious agreements that can lay the foundations for these county deals to be built on over time.”