Update: the Chancellor has now delivered his Autumn Statement (17 November 2022) – read The Heritage Alliance summary of the announcements for heritage here: Autumn Statement 2022 – Our Summary for Heritage
Rishi Sunak has now been declared as the new leader of the Conservative Party and Prime Minister of the United Kingdom. The new Prime Minister has promised to deliver on Conservative manifesto promises, including protecting the environment and levelling up.
Before her resignation on Tuesday 20 October, Liz Truss confirmed that the Chancellor, Jeremy Hunt, would deliver the Government’s medium term fiscal plan in full on 31 October. The Chancellor has now announced that this has been delayed until 17 November.
This plan should set out in greater detail government tax and spending plans.
The Office for Budget Responsibility (OBR), the independent budget watchdog, will publish a report alongside this statement to give an indication of the health of the UK’s finances.
The key details are as follows:
On Monday 17 October, the new Chancellor, Jeremy Hunt announced that the Government will scrap “almost all” of the tax measures that were announced in the mini-budget, bringing forward key announcements that were initially due to be delivered on 31 October.
The key announcements made by the Chancellor are summarised below:
- The basic rate of income tax will remain at 20p, instead of being reduced to 19p
- Cuts to dividend tax rates, the IR35 tax changes, VAT-free shopping for tourists and the alcohol duty changes will be reversed
- The Government plan to keep the cuts to stamp duty and National Insurance
- The Chancellor has stated that the government will also review the help it is providing with energy bills. The energy price guarantee, as originally announced, will only last until April 2023. A Treasury-led review is to take place into how people are helped with energy bills from April next year, followed with a more targeted system
He will deliver a full fiscal plan announcement at the end of the month.
The initial Growth Plan announced by the Chancellor on Friday 23 September, set out the following proposals. These are expected to change and we will update this post as and when we know more.
Cost of Energy
The Government has set out their approach to help households and businesses with the rising cost of energy. This approach aims to:
1) Support businesses, charities and the public sector with the Energy Bill Relief Scheme which aims to provide an equivalent price guarantee to that given to households. The scheme will run for 6 months, and cover energy used from 1 October 2022 to 31 March 2023. The Government aims to work with suppliers to ensure that all non-domestic consumers are offered tariffs on competitive terms. You will not need to take action or apply to the scheme to access the support. Support (in the form of a p/kWh discount) will automatically be applied to your bills.
The Government will publish a review into the operation of the scheme in 3 month’s time to inform decisions on future support after March 2023. In particular, the review will focus on identifying the most vulnerable non-domestic customers and how the government will continue assisting them with energy costs.
THA will be strongly making the case to the Government that heritage organisations should be included in those businesses that continue to receive support after March 2023. The Government showed great support to the industry during the pandemic through the Cultural Recovery Fund and we will continue to argue that it is within their interests to protect heritage across the UK.
2) Help households through the Energy Price Guarantee, claiming that over the next two years, the typical household energy bill will be £2500. The Government also aims to give all households £400 of help towards their energy bills this year, with most vulnerable households potentially receiving additional help
3) Control volatile energy markets through the Energy Market Financing Scheme which seeks to enable short term financial support to wholesale firms
Economic Growth
The Government has also set out their approach to achieving greater economic growth across the UK. Their new plan is built around three key objectives:
1) Reforming the supply side of the economy
2) Maintaining a responsible fiscal approach to public finance
3) Cutting taxes to boost growth
The Chancellor hopes to achieve these objectives through reform in the following areas: business investment; tax; and the labour market.
We are aware that deregulation proposals will be of concern to the sector due to the implications it could have on heritage protection. Further details on this are included below.
Business investment
The Chancellor has proposed that he will:
- Liberalise the current planning system to help speed up investment, claiming that he will unpick the “complex patchwork of planning restrictions and EU-derived laws that constrain our growth”. In addition, he seeks to increase the disposal of surplus government land to build new homes.
- Implement new investment zones that aim to encourage business growth in almost 40 areas.
We are aware that 38 local authorities are bidding for investment zones within which “the need for planning applications will be minimised and where planning applications remain necessary, they will be radically streamlined.” Additionally, the Government have announced a new Planning and Infrastructure Bill aimed at reforming major infrastructure policy to “accelerate priority major infrastructure projects across England, by: minimising the burden of environmental assessments; making consultation requirements more proportionate; reforming habitats and species regulation; and increasing flexibility to make changes to a Development Consent Order once it has been submitted”.
There are currently many unknowns in the announcements surrounding the proposed investment zones. It is welcome that the need to protect heritage is cited in the guidance but, as much heritage is managed outside of formal heritage protection regimes, we are concerned at references to remove EU requirements where they relate to the environment; focus developer contributions on infrastructure (section 106 is critical to our sector), reduce consultation with statutory bodies; and relax key national and local policy requirements. We will be seeking discussion with DLUHC (The Department for Levelling Up, Housing and Communities) on what these measures will mean and how they might impact heritage, in order to mitigate against negative impacts.
DLUHC will be setting out more detail on the planning offer shortly, including further details on the level of deregulation and the streamlined mechanism for securing planning permission.
Recent media coverage in The Observer and BBC Online has followed speculation that DEFRA is planning on significantly changing ELMS (Environmental Land Management Schemes). We continue to keep a close eye on this. We have continually made the case, along with our members, for the importance of environmental protections. The rural historic environment is integral to our natural environment – excluding one is detrimental to both. In our letters to new Government Ministers, we will address what potential U-turns may mean for heritage, and once again emphasise the key role that heritage plays in supporting growth and the economy.
The Environmental Land Management (ELM) Scheme offers the opportunity for the Government to support Goal 6 of the 25 Year Environment Plan, and increase support for heritage and engagement with the rural historic environment. The Environmental Land Management scheme should incentivise land managers to restore and improve our natural capital and rural heritage by providing sufficient long-term funding to deliver public goods. Investment in rural heritage delivers significant returns. A 2020 study in the Lake District National Park, for instance, estimated that archaeological sites on agricultural land generated over £1 billion for the local economy over a ten-year period; 80-90% through tourism visits, the remainder by local communities. You can read our Agriculture Bill briefing from 2020 on the background to the issue here. Historic England has also produced a briefing note on the importance of Environmental Land Management Schemes which can be read here.
Tax
The Chancellor has proposed that he will:
- Cancel next year’s planned increase in corporation tax from 19% to 25%
- Abolish the top rate of income tax and cut the basic rate of income tax from 20% to 19% from April 2023.
- Scrap the 1.25 percentage point increase in National Insurance from November, claiming this will save workers on average £330 per year.
- Cancel planned increases in the duty rates for beer, cider, wine and spirits.
- Wind down the Office of Tax Simplification – an independent body advising the Chancellor on tax
Labour Market
The Chancellor has proposed that he will:
- Scrap the bankers’ bonus cap and implement a package of regulatory reforms later in the Autumn
- Tighten trade union rules, implementing minimum service levels and legislation which requires unions to put pay offers to a member vote.
- Reform benefit requirements, aiming to reduce unemployment benefits for 120,000 more people if their job search commitments are not fulfilled. Additional support has been proposed for unemployed over 50s
Key Government guidance & publications:
Guidance: Investment Zones in England (24 September 2022)
The Growth Plan 2022: Investment Zones factsheet (23 September 2022)
The Growth Plan 2022: documents (23 September 2022)
Guidance: Energy Bill Relief Scheme: help for businesses and other non-domestic customers (21 September 2022)
Energy bills support factsheet (updated 21 September 2021)