Autumn Statement: Energy price cap increase dampens Hunt’s ‘tax cuts’ as he denies pre-election handout – live

The Office for Budget Responsibility has revised up its forecasts for inflation in the UK, Archie Mitchell reports.

After predicting in March that the rate of price rises would fall rapidly from a peak last year toward the Bank of England’s 2 per cent target by early 2024, it has now said it will stay higher for longer.

The OBR said it will take until the second quarter of 2025 to return to the 2 per cent target, more than a year later than it forecast in March.

Taxes will be higher at the next election than they were at the last, shadow chancellor Rachel Reeves has said.

She told the Commons that she has “long argued that taxes on working people are too high”.

She said: “From their failure to uprate income tax or national insurance bands, to forcing councils to raise council tax, the Conservatives have pushed the costs of their failure onto others.

“But the British people won’t be taken for fools. They know that what has been announced today owes more to the cynicism of a party desperate to cling onto power than the real priorities of this high-tax, low-growth Conservative Government.

“So I think we can forgive taxpayers for not celebrating when they see the truth behind today’s announcements. Going into this statement the Government had already put in place tax increases worth the equivalent of a 10p increase in national insurance.

“So today’s 2p cut will not remotely compensate for the tax (increases) already put in place by this Conservative Government. The fact is that taxes will be higher at the next election than they were at the last.”

Rachel Reeves has said the “ravens are leaving the tower” when Saatchi and Saatchi “are saying the Tories are not working.”

The shadow chancellor said “Britain can not afford another five years of Conservatives” as she attacked the government’s record on the economy.

“Mr Speaker, the ravens are leaving the tower when even Saatchi and Saatchi are saying the Tories are not working,” she told MPs.

Earlier this month The Independent reported that Saatchi and Saatchi, the ad agency behind Margaret Thatcher’s “Labour isn’t working” attack, was predicting a win at the next election for Keir Starmer’s party.

Read more here:

Working families have been “skating on thin ice for too long”, Labour said.

Shadow chancellor Rachel Reeves said: “The Chancellor and the Prime Minister say that the cost of living crisis is dealt with. Now 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, 11 million UK households don’t have enough savings to cover three weeks of living expenses if they needed it.

“Working families have been skating on thin ice for too long and as their resilience has been eroded, so has our national economy’s.”

Jeremy Hunt claimed to have delivered the biggest tax cut since the 1980s, as he boasted that the British economy had “turned a corned” under his watch.

Mr Hunt told the Commons – as Rishi Sunak grinned behind him – “I’ve today delivered the biggest business tax cuts in modern British history.”

He finished his autumn statement by saying: “We are delivering the biggest business tax cut in modern British history, the largest ever cut to employee and self-employed National Insurance and the biggest package of tax cuts to be implemented since the 1980s.”

House prices are expected to grow marginally by 0.9% this year, but then drop by 4.7% next year, according to the Office for Budget Responsibility.

Rachel Reeves has urged Jeremy Hunt to confirm whether a widely briefed inheritance tax cut has been delayed or abandoned.

The shadow chancellor said Mr Hunt had spent two weeks “marching Tory MPs up a hill only to march them down again on inheritance tax”.

It was reported that the chancellor was considering halving the rate but that an announcement has now been delayed until the spring Budget.

“So can the chancellor tell the house today: is cutting inheritance tax a decision delayed or a decision abandoned?” Ms Reeves asked.

Mr Hunt did not speak for a second time after delivering his Budget.

Paul Johnson, the director of the Institute for Fiscal Studies (IFS), said it was a “tiny bit cheeky” of Jeremy Hunt to claim he had delivered “the biggest business tax cuts in modern British history”.

The respected economist pointed out that today’s measures were “in part designed explicitly to offset a much bigger (in long term) corporation tax increase”.

A coalition of disability charities says the government is attacking those on disability benefits by introducing harsh measures designed to encourage them back to work.

Anastasia Berry, of the consortium and MS Society, said the plans would “deprive people with severe health problems of £390 a month and push more disabled people into poverty in the middle of a cost-of-living crisis”.

She added: “The government claims a radical shift towards home-working since the pandemic can justify removing support for those with mobility issues. But only one in ten jobs advertised this year have offered this option.”

The tax burden is still on course to hit a post-war high, the Office for Budget Responsibility has confirmed.

Despite Jeremy Hunt’s claiming to have delivered the biggest tax cut since the 1980s, the official forecaster said the tax burden would rise every year to a post-war high by 2028-29.

The OBR said: “Tax changes in this autumn statement reduce the tax burden by 0.7 per cent of GDP but it still rises every year to a post-war high of 37.7 per cent of GDP by 2028-29.

The news will enrage right-wing Tory MPs, who have piled pressure on Mr Hunt over rising taxes.