DfC to work with DWP to allow local pensioners and welfare claimants benefit from increases

The new state pension is to rise by 8.5 per cent to £221.20 a week, worth up to £900 more a year, while benefits are also set to increase in line with inflation, British Chancellor Jeremy Hunt announced on Wednesday.

However, his statement noted that pensions and benefits are fully devolved and that it was up to a Northern Ireland Executive – which doesn’t currently exist – to decide on uprating here.

A Department for Communities’ spokesperson said: “The Department will work with the DWP and bring forward the necessary legislation to uprate social security benefits and state pension in NI from April 2024, in line with the rates announced in the Autumn Statement.”

The main rate of employee National Insurance contributions (NICs) will be cut from 12 per cent to 10 per cent from January 6.

The Chancellor said the measure will put £450 back into the pocket of the average worker earning £35,400 a year.

Mr. Hunt told MPs the National Living Wage (NLW) will rise to £11.44 an hour for eligible workers from next April. This, he estimated, will represents an increase of over £1,800 to the annual earnings of a full-time worker.

Alcohol duty will be frozen for six months to August 2025, in order to support pubs, breweries and distilleries, he said.

These were among the headline measures announced by Mr. Hunt at Westminster this afternoon.

Tax Cuts

Announcing the reduction in National Insurance contributions for employees, the Chancellor said: “For the average nurse, it is a saving of over £520 and for the typical police officer it is a saving of over £630 every single year.

"Mr Speaker, I would normally bring in a measure like this for the start of the new tax year in April, but instead tomorrow I’m introducing urgent legislation to bring it in from January 6, so that people can see the benefit in their payslips at the start of the new year.”

NICs for self-employed workers are also being reduced, Mr. Hunt stated. From April 2024, Class 4 NICs for the self-employed will be reduced from 9 per cent to 8 per cent and no self-employed person will have to pay Class 2 NICs, saving the average self-employed person on £28,200 a year £350 in 2024/25.

National Living Wage

The NLW is to rise to £11.44 for people aged 21 years and over. The National Minimum Wage (NMW) will rise to £8.60 per hour for people aged 18-20; and to £6.40 per hour for 16-17 year olds and apprentices.

"That is the largest ever cash increase in the NLW, worth up to £1800 for a full-time worker. Since the NLW has been introduced, the proportion of people on low pay, defined as earning less than two thirds of national median hourly income, has halved.

"But at the new rate of £11.44 an hour it delivers our manifesto commitment to eliminate low pay altogether. That means by next year someone working full time on the NLW will see their real take-home after-tax pay go up not by 25% but by 30% compared to 2010,” said Mr. Hunt.

State Pension and Benefits

Announcing increases to the State Pension, Mr. Hunt said: “From April 2024, we will increase the full new state pension by 8.5 per cent to £221.20 a week, worth up to £900 more a year. That is one of the largest ever cash increases to the state pension – showing this government will always back our pensioners.”

Welfare entitlements, including Universal Credit, in England and Wales, are to rise next April.

However, as his statement notes ‘DWP benefits are fully devolved in NI, so it is for the NI Executive to decide uprating in NI’.

Notwithstanding this proviso DfC has told the ‘Journal’ if will liaise with DWP on legislation to ensure local benefit claimants and pensioners will receive increases next April.

Cigarettes and Alcohol

Duty rates on all tobacco products will increase by two per cent on the Retail Price Index while the rate on hand-rolling tobacco will increase by 12 per cent. These changes took effect from 6pm on Wednesday.

Alcohol duty remains frozen until next August.

"Although I am going to increase duty on hand-rolling tobacco by an additional 10% above the tobacco duty escalator, I know that for many people going to the pub has become more expensive,” said Mr. Hunt, adding, “I have decided to freeze all alcohol duty until August 1st next year. That means no increase in duty on beer, cider, wine or spirits.”

No Barnett Bounce

Under the Autumn Statement, the devolved administrations are receiving over £1billion in additional funding through the Barnett formula (under which the North, Scotland and Wales get a proportionate uplift in funding when the British Government increases expenditure in Britain-only).

The Scottish Government is receiving £545 million, the Welsh Government £305 million, and the NI Executive £185 million.

As indicated by Mr. Heaton-Harris in his Budget for 2023-24 any Barnett boosts this year must be used to pay down Stormont’s £297m overspend.

Tackling Paramilitarism

The only specific spending for the North was for the Tackling Paramilitarism Programme.

“The government is confirming the allocation of £3 million for the Tackling Paramilitarism Programme in NI, enabling the programme to continue its positive work to tackle paramilitarism in Northern Ireland and strengthen community resilience,” the statement reads.

Reaction

SDLP MP Colum Eastwood said: "The Tories may desperately want it but there’s been no outbreak of Economic-Stockholm-Syndrome in places like Derry, Belfast or Newry.

“No new support for people hammered by the cost of living crisis, no new ideas to maximise the benefits of dual market access for Northern Ireland, nothing that reflects the unique challenges facing people here,” he said.