Jeremy Hunt says he has not ‘ducked difficult decisions’ as OBR says living standards growth wiped out – as it happened

That’s all for our live coverage of the chancellor’s autumn statement, as Britain faces the biggest hit to living standards on record.

You can read our main story featuring Jeremy Hunt’s announcement against the backdrop of the Office for Budget Responsibility’s analysis of the state of the economy.

Here are the key elements from the chancellor’s speech to the House of Commons on Thursday.

Zoe Wood, the Guardian’s consumer affairs correspondent has written a summary of how today’s measures may affect you.

Thanks for following along. Have a good evening.

Former cabinet minister Jacob Rees-Mogg has criticised Jeremy Hunt’s budget, saying he has taken the “easy option” of increasing taxes.

Rees-Mogg, who was business secretary until resigning when Rishi Sunak became prime minister, said taxation was too high and cuts should be made instead to balance the budget.

Speaking to Channel 4 News, he said: “I think the Conservative party should ensure that tax in the country and the expenditure match at a reasonable level. Taxation has got too high and there are issues with the level of expenditure that we have got.

“I think there is a real problem with fiscal drag bringing more and more people into the 40p [tax] band who, particularly if they are living in the south of England, are not necessarily particularly well off.

“That is going to be hard for them paying an extra level of tax on top of what they are already paying.

“Also, freezing the basic band is going to be a burden for all taxpayers, even those who are still in receipt of benefit.

“I think we need to look at the efficiency of government to make sure money is well spent before reaching for the easy option of putting up taxes.”

In terms of reaction, this has just come in from Leo Varadkar, Ireland’s incoming taoiseach, who has said economic problems in the UK won’t put Ireland into recession.

He said it was “very bad news”, describing the UK as one of Ireland’s biggest trading partners as well as nearest neighbour. “Anything that happens in their economy will affect ours,” he said.

Varadkar blamed not just the war in Ukraine but also Brexit and some recent policy decisions by the UK government. “Those are the factors … but I don’t believe they’re dragging us into recession,” he said.

“Our economy decoupled from theirs a long time ago … it’s still our expectation that next year our economy will grow slightly and employment will continue to grow as well.”

The current taoiseach, Micheál Martin, said analysis and forecasts suggested Ireland would not go into recession next year.

“That said, we’re very much aware of storm clouds gathering across Europe, and across the United Kingdom,” he said.

The Children’s Society has said measures to help families are only “a temporary sticking plaster” and called for long-term solutions, in its reaction to the budget.

The charity, which works with young people who are facing abuse, exploitation and neglect, said it was glad that Jeremy Hunt had announced he would raise benefits in line with inflation.

A statement said:

It was the right thing to do as families and parents up and down the country continue to face spiralling costs of food and energy bills. The cost of living keeps going up, but we are at a point where families can’t stretch their incomes any further.

It is exactly why we still need far more targeted support for children to help households who have already slashed their budgets to the bone.

One-off payments to support people on benefits with energy bills and the extension of the household support fund are welcome additions, but they are still temporary sticking plasters over much bigger issues.

We need long-term solutions such as increasing child benefit payments, feeding more children through free school meals, and long-term funding for local crisis support.

The New Economics Foundation, a left-leaning thinktank, has produced a graph showing the impact of the cost of living crisis over the next two years, based on today’s budget and OBR forecast.

Unsurprisingly, it shows the poorest being the worst affected. Its figures are based on the difference between rising incomes and rising cost of essentials, as a percentage of income.

It indicates the poorest could be nearly 20% worse off.

Jeremy Hunt has spoken to the BBC’s political editor, Chris Mason, in the aftermath of the budget.

The chancellor denied that he had ducked difficult policy choices and denied that any “pain” had been postponed until after the next general election.

“Well, the Conservative chancellor standing up in the House of Commons, and saying there are going to be £25bn pounds of tax increases, that is facing up to difficult decisions,” he told the BBC.

Hunt said voters could trust the Conservatives, despite the tax burden being projected to go up to its highest level since the second world war. In the interview, aired on the BBC News at 6 bulletin, he said the economy was in an “exceptional situation” caused by the pandemic and the war in Ukraine.

He added that Liz Truss’s September mini-budget had had “very little” effect on the UK’s economy.

“There were mistakes. We corrected those within three weeks. But the problems we’re facing are the same problems that Germany, France, America, Japan, all these countries are facing,” he said.

“Only Conservatives understand that successful economies need to be lightly taxed, if they’re going to be dynamic and innovative … [Conservatives] want sound money and low taxes … but sound money has to come first.”

17 Nov 202213.29 EST

Andrew Sparrow

In an interview with ITV’s Peston show, Jeremy Hunt said he hoped people would give him credit for being honest with the public about the problems facing the country. When it was put to him that he was putting off spending cuts until after the election, he replied:

Well I think that a Conservative chancellor who stands up in the Commons and announced £25bn of tax rises, I don’t think anyone would say that is deferring a horrible decision. That is confronting this problem head on and what support we can give to the economy in the next two years, of course we do while we’re going through a recession. But in the end what the country wants, what families want, is the confidence that comes from honesty about the problems but also having a plan in place that gives them hope for the future that we can get through this, as we absolutely can.

My colleague Graeme Wearden and I are about done for the day. But Harry Taylor is taking over.

Jeremy Hunt may be able to reverse some of today’s measures in time for the general election, predicts Paul Dales of Capital Economics.

He told clients:

In his autumn statement, the chancellor, Jeremy Hunt, appears to have pulled off the tricky task of reassuring the financial markets of the government’s fiscal discipline while also managing not to deepen the recession.

Our economic forecasts suggest he may be rewarded by being able to announce plans to reverse some of the tax hikes and spending cuts before the next general election in 2024.

Paul Hollingsworth, chief European economist at BNP Paribas Markets 360, has dubbed today’s autumn statement a “mañana budget” – as some of the cuts are scheduled beyond the next general election:

Hollingswoth says:

The Autumn Statement was a sombre affair that sought to restore the credibility of UK fiscal policy in the aftermath of the so-called ‘mini Budget’, without contributing to an even deeper recession in the short term.

However, the bulk of the fiscal consolidation is set to take effect after the next general election (which must take place before January 2025), which calls into question whether it will actually be delivered and/or whether growth will be as strong in the medium term as the OBR expects in order to deliver the desired improvement in the public finances.

The most prominent public spending thintanks are the Institute for Fiscal Studies and the Resolution Foundation, and we have already featured their autumn statement assessments, at 4.23pm and 5.32pm.

Here are comments on the autumn statement from five more thinktanks

From Ryan Shorthouse, chief executive of Bright Blue, which promotes liberal conservatism:

Britain seems to be going backwards. We are back in recession. Inflation is back to historic highs. We are back to an austere fiscal strategy. These economic woes are largely driven by global factors, but also in part by the policy decisions of Conservative-led governments: the so-called ‘mini-budget’ and Brexit, in particular.

Most of the public are now paying higher taxes, higher mortgages and higher bills as a proportion of their household income. Since all this significant financial hardship is happening after twelve years of Tory rule, they are unlikely to forgive the Tories for yet another round of austerity. Even if there is no other alternative to the broad fiscal strategy that is now being pursued.

Faced with such dreary economic forecasts, the chancellor was right to set a plan to reduce the current budget deficit over the next five years, even if the fiscal rules have been softened somewhat.

From Chris Hayes, senior analyst at Common Wealth, which promotes common ownership:

Despite the chancellor’s rhetoric about letting the broadest shoulders carry the greatest weight, the policies on offer are weak. Despite cutting the tax-free allowance for dividends, asset owners continue to enjoy significant preferential tax treatment compared to working people. Instead of closing that unjustifiable gap, the chancellor has opted for further austerity for our teetering public services. As the OBR point out, total departmental spending faces a further £28bn of cuts compared to previous plans, after more than a decade of damaging and unnecessary austerity. This new round of spending cuts is similar in scale to the £32bn announced by George Osborne in the 2010 budget.

From James Kirkup, director of the Social Market Foundation, a centrist thinktank:

The government’s entire economic plan now relies on a forecast of net immigration at more than 200,000 a year, around 50% higher than the numbers used in previous forecasts. Those migrants will bring skills and commitment to the British economy, supporting growth that benefits everyone. Without these workers, Britain would face bigger tax rises and deeper cuts.

It’s good that the Treasury has accepted the economic reality that an open approach to immigration brings benefits to the UK, but ministers now need to start an open and honest conversation with voters about that economic reality. Voters with concerns about immigration should be listened to and policy must ensure that they feel they share in the economic benefits that migration brings.

From Sam Tims, economist at the New Economics Foundation (NEF), a leftwing thinktank:

Today’s announcement to increase social security payments by inflation keeps things as they are: with the benefits system plagued by the ongoing impact of austerity. Support is still far below what families need, forcing people to go without heating and rely on foodbanks, particularly those impacted by the benefit cap, which should have been scrapped, not increased.”

​Social security needs a fresh start. To support every family through this income crisis and the looming recession, the current system should be replaced by the living income which would set an income floor that’s enough to meet life’s essentials.

The NEF has also published research saying that more than a third of households (10.6 million) will be unable to afford the cost of essentials such as household bills or a trip to the dentist by April 2024, following the autumn statement.

From Jennifer Dixon, chief executive of the Health Foundation:

Today’s autumn statement will provide short-term respite for a chronically overstretched health and care service but fails to tackle the underlying challenges facing the system.

While the NHS and social care have been offered some protection to 2025, most other public services still face significant real terms cuts. This, alongside falling living standards and rising unemployment, will only worsen the health of the population.

Additional funding for social care is welcome but after more than a decade of austerity will do little more than paper over the cracks of a broken system. And by shelving the planned changes to introduce a cap on care costs first recommended by the Dilnot Commission more than a decade ago, this government becomes the latest to break its promise to deliver the long-term reforms needed to improve the system. The government has chosen to prolong a major public policy failure that leaves older and disabled people without the care they need and many facing catastrophic costs.

The UK tax take is set to hit £1tn for the first time this financial year, lifted by the windfall taxes on energy producers.

The Office for Budget Responsibility has lifted its forecast for tax receipts in 2022-23 to £1,001bn, up from £981bn forecast back in March.

Oil and gas receipts, for example, are set to double compared with the March forecast, to £14.9bn this year. They have been lifted by the energy profits levy on North Sea producers (which Hunt increased from 25% to 35% today).

The OBR also expects higher corporation tax receipts this year, due to stronger-than-expected profits, and higher VAT takings.

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As we flagged earlier, this will push the UK tax burden to its highest sustained level since the second world war.

17 Nov 202212.58 EST

Rajeev Syal

There was no mention in the chancellor’s address of the Home Office or its areas of responsibility – policing, crime, national security, or the issue that has hung heavy over this government, immigration.

But just two days after Rishi Sunak told reporters that he wanted to get “migration down over time”, the Office for Budget Responsibility has increased the estimate of net migration into the UK by about 70,000 a year. (See 5.11pm.)

There is also a small cut to the single intelligence account which funds Secret Intelligence Service (SIS/MI6), Government Communications Headquarters (GCHQ) and the Security Service (MI5). It rose slightly from £2.5bn last year to £2.6bn in 2022-23, but is expected to fall to £2.3bn in 23-24 and £2.4bn in 24-25.

Mohamed El-Erian, president of Queen’s College, Cambridge, and chief economic adviser to Allianz, the German finance company, told LBC’s Tonight with Andrew Marr that this wasn’t a typical Conservative budget. He said:

I would say they would say we finally we’ve got back more fiscal responsibility. This is not your typical Conservative budget. This puts a significant burden on the better off in society, as it should. So, this is not your typical Conservative budget. This is a world where Conservative ideology has been put aside to economics. And I think that that’s the big contrast with what came before. Under Liz Truss it was about politics ahead of economics. Now, economics has been put ahead of politics.

According to Alex Wickham from Bloomberg, Tory MPs are very depressed about the autumn statement. That is not particularly surprising. Elections are often won on the basis of whether or not people feel better off than they were when the government came in, and today MPs learned that they are likely to go to the polls after two years of falling living standards. (See 12.35pm.)

Liz Truss was not with fellow ex-PMs in the Commons for today’s statement. (See 5.09pm.) She was having lunch in an exclusive club instead, Wickham reports.

NIESR, the economic thinktank, has criticised Jeremy Hunt for not providing more support to households, saying:

The chancellor should have provided more support to UK households at a time when they are suffering the largest fall in their real incomes since records began in 1956.

Given that fiscal targets are arbitrary, these could have been set to enable the Chancellor to bring forward more spending while still committing to sustainable public finances in the medium run.

NIESR adds that the government’s expensive universal subsidy, to cap average bills at £3,000 from April, will disproportionately benefit high-income earners, as they use a much greater amount of energy.