Autumn Statement: 11 things you may have missed

Thankfully, FT Adviser is on hand, having pored over the 120-page Autumn Statement and the raft of accompanying documents, to reveal those nuggets of information that may have been missed amid the big headlines on pensions and national insurance. 

Here are 11 (because the chancellor lives at 11 Downing Street) hidden rabbits from Hunt's hat.

1) Value for Money Framework

According to the document, the Financial Conduct Authority will consult next spring on the next steps of the new value for money framework. 

The statement said: "As part of this, large schemes will be required to compare themselves against others in the market, including large-scale schemes, to ensure they are delivering value for their members."

A shift towards investments that boost social care, education and climate-friendly companies, can help to underpin insurance companies’ long-term business sustainability.--Me, in 2021

This is part of the government's plan to progress the consolidation of pension schemes into large, defined contribution behemoths to drive down costs for savers and diversify into growth equity.

The rationale being, the bigger the scheme, the easier it can invest into less liquid projects. 

The government plans for most savers in workplace DC schemes to belong to schemes of £30bn or more by 2030.

2) British Business Bank

The government is to set up a growth fund within the British Business Bank.

The aim is to "draw upon the BBB's expertise and a permanent capital base of more than £7bn, to give pension funds access to investment opportunities in the UK's most promising businesses".

Alongside this, the government is setting up a Venture Capital Fellowship to take the one ring to Mordor, I mean, sorry, to "produce the next generation of world-leading investors in the UK's renowned VC funds, to support investment into the UK's most high-growth companies".

3) Solvency II

Hidden among the documentation was a challenge for the insurance giants operating in the UK. As discussed in previous years, the question of whether Solvency II reforms will allow insurers to allocate their expansive investment portfolios into less liquid investments.

The Autumn Statement said: "The government is legislating to give effect to the Solvency II reforms, to deliver a more tailored, clear and simple regulatory regime for the insurance sector.

"The reforms will boost economic growth, by incentivising private investment for productive assets, such as infrastructure."

Already, insurers have pledged more than £100bn of investment in a greater range of productive assets over the next decade, as a result of the reforms.

As reported by a very wise journalist in the CII Journal back in 2021: "Premiums might have to rise slightly to offset the higher levels of capital that must be held as insurers allocate more to less liquid assets such as infrastructure. Dividend growth from insurers might not be as exciting as it had been pre-Covid. 

"But from a risk perspective, a divesting of potentially reputation-damaging stocks such as oil and gas, and a shift towards investments that boost social care, education and climate-friendly companies, can help to underpin insurance companies’ long-term business sustainability."

4) Hunt bids farewell to NatWest

Well, not really. What is actually happening, according to section 4.46 of the Statement, is that the government will be divesting its shareholding in NatWest. 

This dates back to the credit crisis, when the UK government became the majority shareholder of RBS in November 2008 taking a 58 per cent stake in the ordinary shares alongside a tranche of preference shares. In 2015, it started to sell its shares back to the private sector. 

While NatWest joined parent company from RBS Group plc in the early 2000s, the name of the whole group changed to NatWest Group plc on 22 July 2020.

According to the Statement: "The government intends to exit by 2025-26 using a range of disposal methods" (slightly threatening tone there, Hunt).

The government will explore options to launch a share sale to retail investors in the next 12 months, subject to supportive market conditions and achieving value for money.

5) Open Banking

The government is going to legislate in 2024 to find out ways to support Open Banking.

It will create a legislative framework that will allow all companies, not just the largest banks, to "participate in a sustainable and equitable commercial model, through which the technology and necessary consumer protections will be developed, and with the appropriate regulatory backstops."

6) Commitment to apprentices

Beyond secondary school education, with the proposed changes to A levels and the introduction of the Advanced British Standard, the government has pledged to boost apprenticeships.

Initially for 16-19 year olds, the government will continue to support employer-based training in England so "adults of all ages" can access high-quality apprenticeships. 

Government has pledged to reform the Help to Save scheme for low income workers.

The government is supporting plans to catalyse the growth sectors by committing £50mn to deliver a two-year apprenticeships pilot to explore ways to stimulate training in these sectors.

7) IR35

You thought this was all over after Kwarteng and Hunt did a dizzying pasa doble dance-off on this in 2022, but no, hidden in the documents were a couple of lines on IR35.

Section 5.50 of the 120-page document was entitled: "Off-Payroll Working (IR35) – calculation of PAYE liability in cases of non-compliance".

It said the government will legislate in the Autumn Finance Bill 2023 to allow HM Revenue & Customs to reduce the pay-as-you-earn liability of a deemed employer to account for taxes paid by a worker and their intermediary on payments received, where an error has been made in applying the off-payroll working rules.

8) Making tax digital

The government has announced the outcome of its review into the impact of Making Tax Digital for Income Tax Self Assessment on small businesses.

This includes maintaining the current MTD threshold at £30,000 and design changes to simplify and improve the system. These changes will take effect from April 2026.

The government is also legislating in the Autumn Finance Bill 2023 to ensure taxpayers, who join MTD from 6 April 2024, are subject to the government’s new, fairer penalty regime for the late filing of tax returns and late payment of tax.

9) Power to the people (at the DWP)

The Department of Work and Pensions might have been feeling left out of previous Budgets and Autumn Statements, with new powers always seeming to go to the City of London fraud squad or HMRC. 

But this time, Hunt pulled some sticks for them out of his stocking ahead of Christmas, by legislating for the DWP to have "further access" to claimant data, to better identify fraud and error in the welfare system.

10) Help to Save

Although the government has improved flexibility for the Isa regime, without giving people financial incentives in the form of raising contribution levels, the government has pledged to reform the Help to Save scheme for low income workers.

According to Hunt, the government will publish proposals in a response to the consultation on Help to Save Reform, as well as consulting on delivery of the new scheme.

11) Northern Rock and Bradford & Bingley

The past, they say, haunts us continually and so, too, does the legacy of failed companies which went under in the credit crisis of 2008. 

According to the Statement documents, the government is seeing the light at the end of the tunnel, however, and it's not the 8:01 coming towards us. 

Instead it has highlighted "progress" towards winding down the UKAR interventions, in respect of the UK Asset Resolution pension schemes transfer. 

The government expects the transfer of Northern Rock Asset Management and Bradford & Bingley pension schemes to central government to to be complete in 2025-26.

simoney.kyriakou@ft.com