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Unpacking The 2023 Autumn Statement

Daryl Perry • 23/11/2023
We unpack the 2023 Autumn Statement and what it means for real estate & infrastructure, housing, business rates, consumers, the environment, devolution & investment zones.

Striking A Balance


The state of public finance that accounts for a deficit of £98 billion – while in slightly better condition than had previously been forecasted by the OBR – and an already-highly-taxed public, gave the Chancellor relatively little fiscal headroom (despite claims to the contrary) in an Autumn Statement that was geared towards winning round voters in advance of an (almost certainly to be) election year. 

Despite proclamations around ‘halving inflation’, the Chancellor is likely in no doubt that there will continue to be pressure to get inflation down to the often-vaunted 2% levels. In advance of the statement, he declared the importance of not fuelling inflation. However, with the short to medium term economic outlook still gloomy, the new OBR forecasts have the UK economy growing by 0.7% and 1.4% in 2024 and 2025, respectively and productivity levels falling, the focus for the government was increasingly on encouraging economic growth. This was set out through, as the Chancellor laid claim, 110 different measures. Did you count them all? 



Here’s What The Autumn Statement Means For:


Real Estate & Infrastructure 
Changes to REITs – as first outlined in the summer – were given in more detail, with the focus being on attracting additional investment. 

There had been plenty of rumours in advance of the Statement of the Government introducing a number of measures to encourage liquidity and entry into the housing market. These were wide of the mark and may be one for Spring. 

Planning reform was mentioned with the nuggets of clearing backlogs, free planning applications if not dealt with in a timely manner; and PDR to make housing conversions to flats easier.  

Support was given to renters on the lowest incomes through an increase in the local housing allowance rate to the 30th percentile of local market rents. 

Business Rates  
The announcement extended some relief for retail, hospitality, and leisure sectors for another year at a 75% rate, affecting approximately 250,000 properties, yet this only scratches the surface.

Smaller businesses may find relief, larger ones won't, and may find themselves in a position passing on costs to consumers at a time when prices are already high.

As we have highlighted before, in an environment where rates exceed rent, the need for a review of the system remains in order to help preserve the vitality of our town centres, high streets and our cities.



Energy and Infrastructure 
Much needed additional energy infrastructure will be driven by a shorter planning process and the attempt to bypass NIMBYism through an incentive for those living close to the installation of new energy structure through energy bills.  

Much was released yesterday that was not announced, with a National Infrastructure Strategy due to be released in 2024 – with ‘Getting Great Britain building again: speeding up infrastructure delivery’ released as part of the supporting documents. 


The Consumer 
There was confirmation of the National Living Wage rising to £11.44, equating to just under 10% increase and a pay rise of c.£1,800 for almost 3 million workers – with the scheme expanding out to 21- and 22-year-olds. National and Apprentice minimum wages also increased.   


The ‘last but definitely not least’ announcement was the 2 percentage point decrease in the national insurance rate, from the start of the new year, although critics would suggest that this is offset by the freeze in thresholds. 

Cuts funded by tightening welfare spending will are aimed at those likely to already be under pressure, and will be difficult to enforce. 

Households continuing to be under pressure of the cost of living were hit by ~5% increase in energy bills due to the increase in the cap to £1,928. This was not mentioned in the Statement but was always earmarked for release the day after. 



As per the Spring Budget, the government has rightly identified the need to drive economic growth through capital investment and productivity – against a backdrop of a fall during Q3 – and long pinpointed weights on productivity growth. 

The making permanent of full-expensing - cited as a £9 billion tax break - is a positive for businesses, certainly those in growing sectors. However, at the margins, previous timelines could have acted as an added fillip in the short-term, if businesses had to move forward spending plans to avoid cut-offs.   

There was a continuation of the intent of making the UK an AI powerhouse – this time in the form of £500 million in further innovation centres. Bolstering investment into R&D was the commitment of tax breaks for loss-making SMEs, and a simplification of R&D tax relief. 

In advance of the Statement, it was announced that £4.5 billion would be available across the manufacturing sectors of automotive, aerospace, life sciences and clean energy from 2025. £960 million of this was for a Green Industries Growth Accelerator, and £520 million was set aside for life sciences manufacturing. 

The National Wage increases, while good news for the economy and consumers, will contribute to significant wage bill increases for a number of businesses. Unfortunately, against a backdrop of still-increasing costs, this may have the impact of impacting employment. 



After a flagging of the new North Sea oil and gas licenses, a raft of recent calls that were detrimental to the carbon transition, the pot put aside for the decarbonization of key manufacturing industries – through the green industries growth accelerator - was positive. Money was also put aside for nutrient neutrality mitigation, and a promise to speed up access to the National Grid. 


Devolution and Investment Zones 
In addition to new Investment Zones in West Yorkshire, West and East Midlands, Greater Manchester and Wrexham, the Chancellor extended investment Zones and Freeports from 5 years to 10 years, in order to further increase the attractiveness of those locations involved in the schemes. This is sensible and gives some clarity to those locations planning for the future. 


The announcement of level 3 devolution deals - Mayoralties for Hull and East Yorkshire and North Lincolnshire are good news for the area and proponents of further devolution; Lancashire and Cornwall were bestowed non-mayoralty devolution deals. 



West Yorkshire In Focus: 


Yorkshire To Further Benefit From Investment Zone Status


In a pre-Autumn statement, the Chancellor has announced West Yorkshire will host one of 12 Investment Zones across the UK. It’s based around the region’s universities in Leeds, Bradford and Huddersfield and the cluster of life sciences businesses thriving in the area. This adds to the investment Zone status for Advanced Manufacturing awarded in South Yorkshire just 4 months ago. 

The West Yorkshire Investment Zone, specialising in health tech and digital is intended to unlock over 2,500 jobs and over £220 million of investment across the region over the next five years. 


The investment can be used flexibly on a range of interventions such as skills, research and development and local infrastructure, dependent on local need, and tax incentives such as 100% Stamp Duty Land Tax relief, an enhanced structures and buildings allowance at a rate of 10% per annum, an enhanced 100% first-year capital allowance, employer National Insurance Contributions relief, and 100% business rates relief. 

The West Yorkshire Investment Zone announcement is very welcome. The Zone will support further growth and diversification of the region’s economy and is a genuine stimulus to attracting, developing, and retaining talent. There’s little reason why the Investment Zone shouldn’t replicate the success of the Leeds City Region Enterprise Zone, awarded just over 10 years ago. It brings the additional benefit of harnessing resource and adding to the further regeneration of each city centre and in supporting their sustainable growth. 




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