A crucial part of securing Britain’s prosperity for future generations is building a world-class education and skills system. Long-term investment in human capital is crucial for growth and productivity: changes in labour quality contributed to around 15% of growth in labour productivity between 2001 and 2007, and the majority of labour productivity growth in the years after. [footnote 177] This is why the government continues to make year on year increases to school funding in England, boost opportunities for adults to train, upskill and retrain, and, from 2025, transform the student finance system through the Lifelong Learning Entitlement. The latest data for the three months to July shows there were around 300,000 people who had been unemployed for over a year: a fifth of the UK’s overall unemployed population. [footnote 76] The proportion of unemployed people out of work for over a year is significantly higher in the UK than the top performing countries in the OECD. [footnote 77] In the absence of Autumn Statement policies, the OBR forecast that the combined number of people in the Universal Credit LCWRA group and the Employment and Support Allowance Support Group (ESA SG) was due to increase from around 2.4 million individuals in 2023‑24 to around 2.9 million individuals in 2028‑29. [footnote 85] The government’s WCA reforms have significantly reduced this, more than halving the net flows into LCWRA and ESA SG over five years and ensuring that more individuals receive the right work and health support at the right time. [footnote 86]

The government is focussed on long-term decisions to strengthen the economy. The government recognises that growth cannot be generated through directing economic activity – it comes from giving individuals the freedom to learn, innovate and succeed. The job of government is to create the right conditions for the private sector to thrive. In light of challenging fiscal conditions, the government must be smarter and more strategic – this means prioritising the UK’s strengths and being focussed on the biggest opportunities for growth. Fiscal policy affects growth, inflation and monetary policy because changes in spending and taxation add or withdraw demand to and from the economy. Measures of the level of that impact are called the ‘fiscal stance’; measures of changes in that impact are called the ‘fiscal impulse’. Since 2010, the government has been successful in reducing unemployment. Over the period Q1 2010 to Q3 2023 (inclusive), the UK unemployment rate fell by 3.8 percentage points, the third largest percentage point decline among the G7 countries, more than Canada, Japan, France and more than triple the fall in Italy, with only the US and Germany having had a greater reduction. [footnote 68] The government will measure annual progress against these objectives, focusing on taxpayers’ experience and prioritising the impact of complexity on individuals and small businesses. The government will update on these metrics before the end of 2023-24.

Shop local

Advanced manufacturing harnesses the UK’s world-leading R&D capabilities and the government is taking further steps to support innovation across the wider sector. The government recently published Dame Angela McLean’s review of the role that regulation can play in driving innovation and growth in advanced manufacturing, alongside the government’s response accepting all recommendations. [footnote 164] The government also published its Critical Minerals Strategy refresh earlier this year and recently committed to extend the Connected and Automated Mobility R&D programme. [footnote 165] The Royal Navy have deployed a task group to the eastern Mediterranean, supported by the Royal Air Force patrolling the skies – they are working with partners in the region to deter those who may seek to escalate tensions and are monitoring threats to regional stability, including the transfer of weapons to terrorist groups.

To date, the government has facilitated flights carrying almost 1,000 people to the UK. [footnote 47] The safety of British nationals remains our top priority and the government will continue to look at how it can support those who remain in Israel and Gaza. Many measures have both tax and spend impacts. Measures are identified as tax or spend on the basis of their largest impact. Inflation is less than half its peak. Responsible decisions taken by the government to limit borrowing have supported the Bank of England in its action to bring inflation down; [footnote 2] Capital DEL that does not form part of Public Sector Gross Investment in Capital DEL, including Financial Transactions in Capital DEL, intragovernmental leases, and Scottish Government capital. Business investment and consumption drove growth in the first half of the year. Growth was broad based across categories of business investment. There are likely to have been some positive effects from measures announced at previous fiscal events, including the super-deduction and temporary full expensing, as expected by the OBR. Quarterly business investment data is volatile and recently has been affected by one-off factors, but remains 4% above its pre-pandemic level.

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The totals for tax and spending reflect both the tax and spend impacts of each measure. Totals may not sum by head classification.

Individual Savings Accounts: maintain subscription limits at current levels for 2024-25 for Adult, Junior, Lifetime ISAs and Child Trust Fund 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.

Where are you?

It is important that the UK implements Pillar 2 to a similar timeline as other countries. More than 30 countries across the world have taken steps towards implementation. Other countries moving to implement Pillar 2 from 31 December 2023 or 1 January 2024 include members of the European Union, where a Directive obliges all but the smallest Member States to implement Pillar 2 from 31 December 2023, Australia, Canada, New Zealand, South Korea, Switzerland and Vietnam. Japan is implementing from 1 April 2024. Jurisdictions implementing in 2025 so far include Thailand and Singapore with many more countries expected to follow. The government will continue to monitor international developments on implementation. Policy Decisions