As a proportion of income, households on the lowest incomes have benefited the most from government decisions on tax, welfare and public spending since Autumn Statement 2022. Total departmental spending will be £85 billion higher in real terms by 2028-29 than at the start of this Parliament (2019-20). The Autumn Statement reaffirms the commitments made at Autumn Statement 2022 to make available up to £14.1 billion for the NHS and adult social care and provide an additional £2 billion for schools in both 2023‑-25. The government has taken difficult but necessary decisions to get debt falling and ensure our public services continue to operate effectively in the face of financial and operational pressures. The borrowing rule is met three years ahead of target and with £61.5 billion headroom, an increase of £22.3 billion since the spring. The debt rule is met with £13 billion headroom, double the £6.5 billion held in spring. Underlying debt begins to fall from 2027-28 and then falls to 92.8% of GDP in the target year (2028-29). The government is on track to meet its debt and borrowing fiscal rules with greater headroom against both rules compared to spring. Underlying debt is also lower as a percentage of GDP, by an average of 2.1 percentage points across the forecast. After accounting for decisions at the Autumn Statement, borrowing is forecast to be lower this year, next year and on average over the forecast period compared to the OBR’s March forecast. Reducing debt and borrowing is essential to controlling inflation, keeping mortgage rates affordable and funding public services sustainably. These are the two largest increases to labour supply and potential GDP resulting from fiscal policy the OBR has ever scored in a medium-term forecast. This is in addition to a 0.2% increase to potential GDP resulting from announcements at Spring Budget 2023. Together, Autumn Statement policies are forecast to increase the economy’s potential output in the medium term by 0.3%. This means that the combined impacts of the Spring and Autumn policy measures will increase the number of people in work by around 200,000 by the end of the forecast. The OBR estimates that government decisions at the Autumn Statement will boost business investment by £14 billion and bring a further 78,000 people into employment by the end of the forecast period. The Autumn Statement takes a responsible approach to public spending to keep debt falling, cuts taxes for working people and businesses, reforms welfare to help people into work and removes barriers to business investment to boost growth. The government is focusing on five areas: reducing debt cutting tax and rewarding hard work backing British business building domestic and sustainable energy and delivering world-class education. With inflation falling and the economy and public finances stabilised after a series of unprecedented shocks, the government can now take the long-term decisions necessary to strengthen the economy and build a brighter future. The government must continue to bear down on inflation, and the Office for Budget Responsibility (OBR) forecasts that government policies in the Autumn Statement will reduce inflation next year. Underlying debt is forecast to fall as a proportion of GDP from 2027-28 and the government has greater headroom against its fiscal rules than at Spring Budget 2023. The economy has recovered from the pandemic more quickly than first thought, grown more than expected this year, and is forecast to grow in every year of the forecast period. Consumer Prices Index (CPI) inflation has now more than halved from a peak of over 11% last autumn to 4.6% in October 2023. In January 2023 the Prime Minister set out three economic priorities: to halve inflation, grow the economy and reduce debt.
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