5 Tory crowd-pleasers in the Autumn Statement — and what they actually cost

LONDON — Jeremy Hunt dusted off some old Conservative favorites Wednesday as he mixed personal and business tax cuts with a back-to-work push for social security claimants. It all comes with a hefty price tag.

The U.K. chancellor unveiled his Autumn Statement — a big fiscal moment in the U.K.’s political calendar — against a mixed economic backdrop. And with the government, led by Hunt’s boss Rishi Sunak, struggling in the polls, the pair will be hoping a boost to pay packets can turn things around ahead of an election expected next year.

POLITICO crunched the numbers on the big headline-grabbing policies below, using the Treasury’s figures to tot up the total projected cost of these Tory crowd-pleasers up to the fiscal year 2028/29.

The big National Insurance cut

What Hunt did: The flagship policy from Hunt’s statement was a big cut in the main rate of National Insurance — the tax paid by Brits and employers that’s meant to go towards health and welfare, but in reality tends to get mixed into the general public spending pot. The chancellor cut the main rate of employee contributions by two percentage points, from 12 to 10 percent. 

Why he did it: Britain’s Conservatives have long thirsted for tax cuts, with the country’s tax burden at a record high. This particular cut, which according to Hunt will apply to 28 million people, will come into effect from January — giving Brits plenty of time, Tories hope, to notice it before an expected election next year.

Total hit to the Treasury up to 2028/29: £46,810,000,000. Or to put that in normal human words, just shy of £47 billion.

Tax cuts for the self-employed

The what: Hunt also abolished a whole band of National Insurance payments that hit the self-employed, alongside a cut to the top rate of contributions paid by these workers.

The why: The Conservatives see notionally working class — but often quite well-off — self-employed workers as a key electoral constituency that helped them win the 2019 election.

Total hit to the Treasury up to 2028/29: £3,720,000,000. So that’s not far off £4 billion more the Treasury now won’t get in tax.

The ‘back to work’ plan

The what: The chancellor announced a raft of new carrot-and-stick measures aimed at encouraging the sick and long-term unemployed back into work and off welfare payments.

The why: Hunt wants to “make work pay,” as he said during the statement. Conservatives want to show themselves as being on the side of working families – and, eventually, squeeze a big area of public spending.

Total hit to the Treasury up to 2028/29: £10,515,000,000. Or to put that into words, getting the suite of changes going will cost more than £10 billion.

But but but: The Treasury reckons its plan will (toward the end of that same period) save the government more than £3 billion (£3,185,000,000, to be precise) through reduced welfare spending and less waste in the system.

Big offer to business

The what: Hunt came armed with a big tax break for businesses: the permanent extension of “full expensing” from 2026, allowing companies to deduct spending on new machinery and equipment from their taxable profits. There was an extended business rates freeze and discount too.

The why: The chancellor said the move would hugely encourage investment in Britain, something he and Rishi Sunak see as essential to their mission to chase higher growth.

Total hit to the Treasury up to 2028/29: £34,105,000,000. So that’s more than £34 billion the Treasury will not receive thanks to its business tax shake-up.

But but but: The finance ministry will be hoping higher overall investment in the U.K. boosts its coffers elsewhere.

Alcohol duty freeze

The what: Hunt played the booze card — a Conservative fiscal event classic — and opted to freeze alcohol duty, the tax alcoholic drinks-makers pay and pass on to consumers, until August 2024.

The why: Any politician who made alcohol more expensive would face the wrath of plenty of Brits as well as tabloid newspaper the Sun — who Hunt gave a personal shout-out to as he announced the freeze. 

Total hit to the Treasury up to 2028/29: £310,000,000. That’s a cool £310 million the chancellor is forgoing. It’s very small beer in the grand scheme of things, but the equivalent of more than 66 million pints. Or a single beer in London.