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63 About this deal
It is partly as a result of these measures that growth has been stronger than expected this year, as resilient real incomes, in aggregate, supported consumption. Inflation has more than halved from its 2022 peak, though remains too high. [footnote 92] The government continues to support the Monetary Policy Committee (MPC) in its action to bring inflation down to the 2% target by keeping borrowing under control. Following a consultation, the government is reforming the activities and descriptors in the WCA to better reflect the greater flexibility and reasonable adjustments now available in the world of work. [footnote 84] This reform will prevent some individuals from being deemed as not fit for work, and ensure they are better supported into employment. These changes will apply to new claims only when the reform is implemented from 2025 onwards. Building homes in the right places, where people want to live and work, will support economic growth across the UK and make home ownership a reality for more people.
The OBR says these measures will bring 78,000 people into the labour market. Although it is not reflected in the forecast, due to uncertainty around the impacts, the OBR notes that ‘some measures could provide a further boost to labour supply’, such as proposed changes to fit notes. Tariff suspensions – The government is maintaining tariff-free imports on over 2,000 goods to provide continuity and avoid unnecessary costs for UK businesses. This measure will extend, for five years, tariff suspensions on goods ranging from vaccine components to ingredients used by UK food producers. Productivity Programme – The Chief Secretary to the Treasury is running an ambitious public sector productivity programme. International phase 1: unemployed claimants across Great Britain will receive regular support from a work coach to search for and move into work. To strengthen the government’s understanding of how early interventions can best help claimants find work or increase their income, the government has expanded Additional Jobcentre Support, currently live in 90 Jobcentres. [footnote 79], [footnote 80] This will test the impact of intensive support 7 weeks into a claimant’s work search journey, building on the pilot announced at Spring Budget 2023 to test the impact of interventions at 13 and 26 weeks Secondly, the government values the work of the self-employed who contribute so much to the economy. Therefore, the government will support the self-employed by cutting the main rate of Class 4 self-employed NICs from 9% to 8% from 6 April 2024. This will benefit around 2 million individuals, recognising the contribution of the self-employed and ensuring that work pays for all.
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Following the passage of the Financial Services and Markets Act 2023 in July, the government continues to take steps to ensure the UK maintains and enhances its world-leading financial services regulatory environment. The government repealed over 100 pieces of unnecessary retained EU law earlier this year. [footnote 145] As part of the Edinburgh Reforms, the government committed to making significant progress in building a Smarter Regulatory Framework tailored to the UK by the end of the year. The government is delivering on this promise by soon laying key legislation, and publishing drafts of other legislation being progressed. Given the global interconnectedness of the financial system, the government also continues to work closely with its international partners through the Financial Stability Board and other fora to establish and maintain high global standards and to mitigate risks to financial stability.
The Charter for Budget Responsibility includes an aim to strengthen over time a range of measures of the public sector balance sheet, as monitoring these broader metrics helps to ensure that debt is reduced in a sustainable way. [footnote 22] Public sector net worth (PSNW), the total value of the public sector’s assets and liabilities, is expected to be on an improving path as a share of GDP in every year of the forecast. The OBR forecasts PSNW to strengthen from -70.0% of GDP in 2023-24 to -60.0% of GDP in 2028-29, improving faster than underlying debt predominantly due to an increase in the value of government-owned assets. Public sector net financial liabilities (PSNFL), a measure of the financial balance sheet, is forecast to fall from a peak of 83.3% of GDP in 2024-25 to 78.2% in 2028-29. The government is also creating more certainty for investors in low-carbon infrastructure by extending the critical national priority designation for nationally significant low-carbon energy projects. Alongside this, the government will look to remove unnecessary planning constraints by accelerating the expansion of electric vehicle (EV) charging infrastructure and will consult on amending the National Planning Policy Framework to ensure the planning system prioritises the rollout of EV chargepoints, including EV charging hubs. It will also consult on introducing new permitted development rights to end the blanket restriction on heat pumps one metre from a property boundary in England. Together these measures will reduce delays and capitalise on the UK’s world-leading approach to decarbonising the economy. The government welcomes the Financial Reporting Council’s (FRC) renewed focus on ensuring the UK’s corporate governance and stewardship regime supports growth and enhances the UK’s international competitiveness. Reflecting the importance of this work, the government has updated the FRC’s remit. The revised remit emphasises the important role the FRC should play in promoting the competitiveness and growth of the UK economy whilst fulfilling its core purpose of enhancing public trust and confidence in corporate governance. [footnote 134] Occupational Health – The government will establish an expert group to develop a voluntary minimum framework which will set out the minimum level of Occupational Health intervention that employers could adopt to help improve employee health at work.National Insurance contributions (NICs): abolish Class 2 self-employed NICs liability from April 2024 In October 2023, the Prime Minister announced a strong action plan to ensure every student has the literacy and numeracy skills they need to thrive through the introduction of the Advanced British Standard. This new Baccalaureate-style qualification will bring the best of A-Levels and T-Levels together, creating a unified structure that puts technical and academic education on equal footing. This reform will ensure every student in England studies some form of maths and English to age 18, boosting basic skills and bringing the UK in line with international peers. It will increase the number of taught hours by 15% for most students aged 16 to 19 and will broaden the number of subjects students take.
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