Jeremy Hunt is today unveiling his first Budget. He has told the Commons that his Budget will help deliver on Rishi Sunak’s five priorities that the Prime Minister set out in January: namely halving inflation, reducing the national debt and increasing growth. Hunt has reprised much of his Bloomberg speech from January with championing the ‘four Es’ of ‘enterprise, education, employment, everywhere.’
The Office of Budget Responsibility predicts the UK to avoid a recession this year, with a contraction of 0.2 per cent. Inflation is expected to fall to 2.9 per cent from 10.7 at the end of 2022. The OBR forecasts growth of 1.8 per cent for next year and then 2.5 per cent the following year. However real living standards are still expected to fall by a cumulative 5.7 per cent in 2022-23 and 2023-24 – the largest fall in living standards since records began in 1956-57.
Below are some of the headline measures:
- Hunt will increase the pensions annual tax-free allowance from £40,000 to £60,000 and will abolish the Lifetime Allowance – previously set at £1.07m. ‘Returnerships’ are to offer a new type of apprenticeship targeted at the over-50s with enhanced career advices for those on Universal Credit
- For parents with children under the age of three in working households there will be 30 hours of free childcare for every single child over the age of nine months to reduce childcare costs by 60 per cent. There will also be a 30 per cent increase in childcare remuneration rate for nursery operators
- Headline rate of corporation tax to rise to 25 per cent. The super deduction will be replaced by full capital expensing for the next three years at a cost of £9 billion, with Hunt intending to make it permanent when possible
- Energy price guarantee will remain at £2,500 cap for the next three months. The planned increase of 11p in fuel duty this year will be cancelled and rates will be kept the same for the next 12 months. This is expected to save the average driver £100
- Hunt has pledged £5 billion in funding for defence, increasing to £11 billion over the next five years – to 2.25 per cent of GDP by 2025 and 2.5 per cent ‘when circumstances allow’
- A White Paper on disability benefits reform will explore the abolition of the workplace capability assessment so a claimant can seek work and not lose financial support. A new programme called ‘Universal support’ will help disabled people get into work with up to £4,000 spent per person to help up to 50,000 people per year
- A quarter of UK electricity to be provided by nuclear by 2050, with Hunt launching the first competition for Small Modular Reactors with companies now able to access to the same investment incentives as renewable energy
- Duty on average strength draught beer sold in UK pubs frozen
- 12 new investment zones, including West Midlands, Greater Manchester, Teeside and at least one in Scotland, Wales and Northern Ireland worth £80 million of support. £200 million in local regeneration projects across England, £161 million in Mayoral authorities and Greater London, £400 million for new levelling up partnerships
- Finance commitments include £400 million for mental health and muscular skeletal support, £63 million fund for leisure centres and swimming pools, £10 million over the next two years to combat suicide, £11 million of support for Ukrainians in the UK with an £1 million prize for AI research
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