Autumn statement: Budget will 'hit every family in Portsmouth' warn opposition politicians

Proposals announced by the chancellor Jeremy Hunt include a 92p per hour living wage increase, a 10.1 per cent increase to benefits but will also see income tax personal allowance and national insurance thresholds frozen and the potential for five per cent council tax hikes.

It comes as the Office for Budget Responsibility said it believed the UK was now in recession and that it expected the economy to shrink by 1.4 per cent next year. Inflation this year is predicted to be 9.1 per cent with a further 7.4 per cent next year.

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Mr Hunt said his measures would ‘deliver a plan to tackle the cost of living crisis and rebuild our economy’ in the face of ‘unprecedented global headwinds’.

Portsmouth North MP Penny Mordaunt, a member of the Conservative front bench, said she was pleased by increased health, education and welfare spending alongside the cap on energy bills.

'There were some important measures for small businesses, the biggest ever increase in the living wage and the biggest programme of capital investment in 40 years,' she added. 'We will weather the economic storm we are in, largely due, as the OBR has said, to Russia's economic war levelled against ever home, school and hospital in the UK.’

But the Labour MP for Portsmouth South, Stephen Morgan, said increased taxation, coupled with ‘spiralling inflation’ and ‘plunging’ growth meant living standards were falling.

‘Britain is a great country, with fantastic strengths, but because of this government’s mistakes, we are being held back,’ he said. ‘What people in Portsmouth will be asking themselves at the next general election is this: Am I and my family better off with the Tories? And the answer is no.’

‘The mess we are in is not just a result of 12 weeks of Conservative chaos but 12 years of Conservative economic failure: growth dismal, investment down, wages squeezed, public services crumbling,’ he added.

Local authority leaders have echoed his concerns with Portsmouth City Council leader Gerald Vernon-Jackson said the impact these proposals would have on working people was ‘worrying’.

It comes as the the council has published its most recent budget update showing its financial shortfall this year has grown to £7.8m.

Among the measures included in the financial statement was the potential for local authorities to increase tax by up to five per cent before a referendum was required with the level previously set at three per cent.

Cllr Vernon-Jackson said he believed there would be ‘some more money’ for councils but that increasing council tax was a ‘difficult’ proposition.

‘The more concerning thing is what this autumn statement will do to families in this city who are already struggling,’ he said. ‘We are going to have the biggest crash in living standards we have ever had over the next few years.

‘Families will be getting poorer and that's particularly difficult in a city like Portsmouth. To say to people that they will lose one-tenth of their income is horrible.'

He said the council 'needs to think through' the contents of the autumn statement as it puts together its budget for 2023/24 early next year.

Councillor Cal Corkery, the leader of the council's Labour group, said the Conservative government had 'crashed the economy and blown a massive hole in public finances'.

'Tory mismanagement of the economy is going to make us all worse off and damage the public services on which we all rely,' he said. 'The chancellor is shifting the blame for the mess his party has created by putting responsibility onto councils to raise taxes locally, a regressive measure which discriminates against poorer areas with greater needs for services such as social care.'