Easier fiscal policy, but real incomes still under pressure

Ian Stewart, chief economist at Deloitte, commented:

“Today’s Autumn Statement delivers another significant easing of fiscal policy, the third largest since 2010. The Chancellor has used the windfall benefit of higher government receipts from inflation to cut National Insurance and reduce Corporation Tax. The reduction in National Insurance only partially unwinds the drag on spending power from higher inflation and the earlier decision to freeze income tax allowances until 2028. As a result, despite cuts to National Insurance, the Office of Budget Responsibility expects real household incomes to decline in 2024.

“The big story is that, by long-term yardsticks, we are in a world of active government. Relative to GDP, public sector debt, public expenditure and taxation are all set to run at historically high levels in coming years, and the UK is likely to run public sector deficits through to the end of this decade. The focus on today’s statement was on taxation, but without faster growth, the government’s ability to materially increase public expenditure is likely to be severely constrained.”

Note to editors

You can follow us on Twitter: 

@DeloitteUK for live comment

Deloitte spokespeople

Deloitte has a range of spokespeople available to comment on today’s Autumn Statement. They can be reached on 020 7007 3333 or 0207 303 5054 or one of the following numbers:

• Ian Stewart - chief economist (07774 337 581)

• Amanda Tickel - head of tax policy (07920 270 964)

• Rachel McEleney - personal tax (07826 891 752)

• Alison Lobb - corporate tax (07768 178264)

• Michael Nicolaides - employment tax (07586 511 104)

• Richard Johnson - business rates (07774 337 581)

About Deloitte

In this press release references to “Deloitte” are references to one or more of Deloitte Touche Tohmatsu Limited (“DTTL”) a UK private company limited by guarantee, and its network of member firms, each of which is a legally separate and independent entity. Please see deloitte.com/about for a detailed description of the legal structure of DTTL and its member firms.

Deloitte LLP is a subsidiary of Deloitte NSE LLP, which is a member firm of DTTL, and is among the UK's leading professional services firms.

The information contained in this press release is correct at the time of going to press.

For more information, please visit www.deloitte.co.uk.