Home Insights Unlucky for some or onwards and upwards?

Unlucky for some or onwards and upwards?

By Danny Clifford
20th Nov 2023

The 13th consecutive year of Conservative fiscal announcements.

The chancellor Jeremy Hunt will stand before Parliament tomorrow to announce his Autumn Statement following relatively positive statements in recent days from both himself and PM Rishi Sunak on the state of the UK’s finances.

Having not only reached his inflation target, but done so ahead of schedule, could long-promised tax cuts be closer than expected? Certainly, there is intense pressure from within his own party to move as rapidly as possible toward the low tax ethos traditionally associated with the Conservatives.

Regardless, the Tories will be pleased to have put Truss’ tax turmoil behind them to move on to a more positive outlook in good time for the next Election.

So what can we expect from the Autumn Statement 2023?

In keeping with tradition, Mr Hunt will deliver his fiscal announcement alongside the latest forecast from the Office for Budget Responsibility and much attention will be on the OBR forecasts as they have been consistently more optimistic as to the outlook of the UK’s finances than the Bank of England.

The initial questions will surround the amount of room for manoeuvre that the Chancellor now has. Both the current position and the outlook are going to be considerably better than they were both a year ago, when Jeremy Hunt took over as Chancellor, and at the time of the Spring Budget. If there is indeed ‘headroom’ for the Chancellor, just how much is there – and how will he choose to use it?

Public services vs tax cuts

The Chancellor will undoubtedly be feeling the pressure to ensure businesses benefit from the expected tax reductions but how far can he go when public services are struggling and strike action continues to impact?

Rishi Sunak has reiterated that the supply side of the economy will be the priority – which hints that the biggest beneficiaries would be businesses – but how would that go down with the public sector?

Inheritance Tax

One of the key whispers has surrounded IHT.

The Conservatives need a ‘battleground’ on which to fight  Labour and it may well be that they believe that IHT will provide that. It was, after all, promises of a £1m IHT nil rate band that helped to oust Gordon Brown at a time when he appeared to be set for victory. Is Rishi hoping that lightning will strike twice?

Labour are making noises about increasing the IHT burden, and reducing available reliefs. If the Chancellor announces moves to reduce the impact of IHT there will be at least one clear battle line drawn from this point forward.

Some believe that, absent a significant miss-step by Labour, there will be a change of Government at the next Election. Are the Conservatives hoping that IHT might once again provide a banana skin for the Opposition? Would the reaction to differing IHT policies be the same in 2023 as it was in 2008?  The backdrop feels very different.