Autumn Statement 2022

18 November 2022

On 17 November the Chancellor of the Exchequer, Rt Hon Jeremy Hunt MP, delivered the new government’s hotly anticipated Autumn Statement, against the backdrop of a turbulent economic climate which has seen the UK now officially enter a recession.

Ahead of the Autumn Statement, IFoA President Matt Saker called on the Chancellor to “build resilience in the economy through long-term thinking” in areas such as infrastructure, net zero and social care.

As expected, the Statement included a £55billion financial consolidation package, achieved through a mix of tax rises and public spending cuts in an attempt to curb inflation and ensure longer term market stability.

Of particular importance to the actuarial sector was that the government published its response to the consultation of final Solvency II reforms. The IFoA welcomes this, as we believe it is important in the public interest that the government’s desire to free up investment under a UK solvency regime is balanced with maintaining appropriate policyholder protection. This includes sensible reforms to the Matching Adjustment, Risk Margin and the Fundamental Spread Methodology.

In addition, there were a number of announcements of interest across various policy areas. These were:

• A review of retained EU law in key growth industries, including financial services.
• Reaffirming the government’s commitment to COP26 pledges, including 68% reduction in emissions by 2030.
• £600bn of capital investment to support the building of infrastructure such as roads, train lines and communities over the next 5 years.
• Confirmation of a second round of the Levelling Up Fund will the allocation of £1.7bn to priority local infrastructure projects.
• £2.8bn funding for Adult Social Care in 2023-24 and £4.7bn in 2024/25, This includes £1bn to directly support discharges from the hospital to the community to support the NHS through the Better Care Fund.
• £1.3 billion in 2023-24 and £1.9 billion in 2024-25 will be distributed to local authorities through the Social Care Grant for adult and children’s social care.
• Delaying the implementation of the Dilnot Reforms to adult social care, with its funding being allocated to support local councils.

The IFoA has produced a member briefing outlining the Autumn Statement measures in more detail.

Should you wish to discuss any of the points raised, please contact:

Henry Thompson, Head of Public Affairs, via Henry.Thompson@actuaries.org.uk.