Chancellor Jeremy Hunt today delivers a highly anticipated Spring Budget, faced with pressure to cut taxes and bolster faltering public services.
The Government is keen to woo voters ahead of a looming General Election, but Hunt will be cautious of a stuttering British economy and the constraints of his own fiscal rules
The Spring Budget has been initially trailed as a tax-cutting Budget, but it has since emerged that Hunt may not have the ‘fiscal headroom’ to make large tax reductions due to weaker public finances after Britain officially entered a recession.
Fuel duty, stamp duty and child tax credits could all see changes
The Chancellor is expected to again extend the fuel duty freeze at a cost of £5billion, while a heavily trailed 2p cut in National Insurance will come with a £10billion price tag for the Treasury.
It is thought Hunt will resist call to cut inheritance tax, but could scale back the so called ‘non-dom tax regime’, raising £2billion.
Budget as it happens
Hunt starts on a positive note: ‘We can now help families, not just with temporary cost of living support, but with permanent cuts to taxation.
‘If we want growth to lead to higher wages and higher livings standards… it can only come by building a high skill and high wage economy.’
- Debt repayment periods extended from 12 to 24 months
- The Household Support Fund extended for another six months
- Alcohol duty freeze February 2025 ‘backing the Great British Pub’
- Fuel duty freeze extension for 12 months
- OBR says debt will fall to 94% of GDP by 2028/2029
- Investment – full expensing to apply to leased assets ‘when it’s affordable’
- £200m to extend recovery loan scheme, helping 11,000 SMEs access finance
- VAT registration threshold increased to £90,000 from 1 April
- Devolution plans to allow more spending power for local leaders
- Additional leveling up funding for some areas to power growth
- Some detail on a shake-up for the pensions regulator and FCA, with new requirement to disclose pension fund exposure to UK assets and provide better value for pensioners.
- Remaining Natwest shares to be sold this summer/
- New British SAving bond, fixed rate for three years
OBR forecasts
Real household disposable income on track to rise by 0.8 per cent this year.
Borrowing falls from 4.2 per cent of GDP this year, to 3.1, 2.7, 2.3, 1.6 and 1.2 per cent in the following five years.
GDP to grow by 0.8 per cent this year and 0.9 per cent next year, 0.5 per cent higher than in the Autumn forecast
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