3.11pm: The Spring Budget rounded up
Hunt’s statement included much of what was already expected, with national insurance cuts key in the Conservative’s bid to stay in power after the UK’s looming general election.
So in case you missed it, here’s a quick recap of what was said:
- National Insurance reduced by another 2p, to 8% for employees, following a 2p decrease in the previous year's Autumn Statement
- Windfall tax on oil and gas companies' profits extended until 2029
- Capital gains tax lowered for higher-rate property owners from 28% to 24%
- Non-dom tax break abolished, but new arrivals exempt from tax on foreign income and gains for first four years of UK residency
- Extension of Household Support Fund for families in England granted for six months, falling short of charities’ two-year extension hopes
- Alcohol duty frozen, 5p fuel duty reduction extended
- Introduction of new British ISA to encourage investment in UK assets
- VAT threshold for small businesses increased to £90,000 from £85,000
- Implementation of new taxes on vapes and higher taxes for business-class flights
- Earnings threshold for child benefit raised to £60,000 from £50,000
According to Capital Economics analysts, the net fiscal giveaway promised by Hunt in the budget amounts to £13.9 billion - lower than many had expected.
While this may help lift the UK out of its mild recession before an election later this year, analysts added, “a big tightening in fiscal policy is still on the cards for after the election and that will probably require new tax hikes”.
2:38pm: Further reaction - British ISA celebrated but lack of housing reform questioned
A key talking point of the budget is Hunt’s lack of housing-related policies, analysts have said in the wake of the statement.
Such “flagship policy to turbocharge the market’s recovery was conspicuous by its absence,” given housing policy will be key in the next election, PEXA UK’s Joe Pepper argued.
Another sore topic was the absence of an increase in the amount that can be spent on a house using a Lifetime ISA, as per finder.com’s Kate Steere.
“The average house price has increased from £218,642 in April 2017 when the scheme was launched, to £284,691 in December 2023,” she said.
“This is an increase of just over 30%, yet the maximum property value you can purchase using your Lifetime ISA remains unchanged at £450,000.”
Some wanted more sweeping reform, with Zoopla executive director Richard Donnell describing Hunt’s budget as a “missed opportunity”.
“There is a need for widespread reform of the planning system to encourage supply,” he said.
That said, others hailed Hunt’s move to abolish the furnished holiday letting regime, with Evelyn Partners’ Toby Tallon saying: “It does seem to level the playing field.”
He added: “For buy-to-let landlords, there will be less of an incentive to opt for short-term lettings over renting to long-term residents.”
Away from housing, the introduction of a British ISA, aimed at incentivising investment in UK companies, was well received.
“I respect the ambition of a British ISA,” finder.com’s Matt Mckenna commented, “it is reasonable for the British government to try and stimulate growth in its domestic market”.
“To preserve the status of the city as a major financial centre we need to encourage investors to invest in UK companies,” Charles Stanley’s Garry White added.
2.29pm: Initial reaction - national insurance cut favours younger voters, says analyst
A key point of Hunt’s budget was the reduction in national insurance, from 8% to 6% for employees and from 10% to 8% for self-employed people.
With handouts a clear tactic to tempt voters ahead of the UK’s impending general election, Evelyn Partern’s Toby Tallon argued the move was aimed at the younger generation.
“By doubling down on his Autumn Statement NIC cut, Mr Hunt is favouring younger cohorts over older, with those over state pension age not subject to NI at all,” he said in response to the Budget.
“As it also has no benefit to those earning income from other sources or being taxed on their assets, it does mean there is little to celebrate for the older constituency that Conservative Chancellors have traditionally courted.”
2.07pm: Grilling begins
With the Spring Budget now over, Labour leader Keir Starmer stands up to have his say.
“There we have it, the last desperate act of a party that has failed,” he says.
Citing falling living standards, the highest tax burden in 70 years and the UK’s entry into recession late last year, Starmer argues: “We’ve seen our fair share of delusion.
“The desperation grows, they taught not only their reputation for fiscal responsibility but any notion that they can serve the country, not themselves.
“This is just another short-term cynical political gimmick. Honestly, what is the point of a party that is out of touch, out of ideas and nearly out of road?”
Starmer adds Labour will support Hunt's cut to national insurance and a continued freeze on fuel duty, but questions when a reduction in income tax can be expected.
1:40pm: And that's a wrap
"Growth up, jobs up, taxes down. I commend this Statement to the House," Hunt remarks as he returns to the bench. That's the delivery of the Spring Budget over.
As expected, national insurance will be cut, while a freeze on alcohol and fuel duty will be kept.
A vape duty will be introduced as tobacco duty is upped in October.
Non-domiciled status, granting tax breaks to wealthy foreigners in the UK, will be effectively abolished and replaced by a new scheme, while the energy windfall tax will be extended.
One surprising development is a reduction in capital gains tax on residential property from 28% to 24%.
1.35pm: National insurance cut again
National insurance will be cut for the second time in six months.
Employees will see the rate fall from 8% to 6%, while self-employed peoples' national insurance will fall from 10% to 8%.
1.30pm: Non-domiciled status a to be abolished
The government will scrap tax breaks for wealthy foreign residents in the UK with non-domiciled status.
This will make the system "fairer" and will be replaced with a modern residency system, Hunt says.
1:27pm: Energy windfall tax extended to 2029
Britain's energy windfall tax on oil and gas firms will be extended as the effects of price increases continue to grip households following the outbreak of war in Ukraine.
This will raise an extra £1.5 billion, as per the Chancellor, keeping the tax burden on North Sea firms at 75%.
"[I will] legislate in the finance bill to abolish the energy profits levy should market prices fall to the historic norm," Hunt adds, however.
1:22pm: Vape duty to be introduced, other tax tweaks
A vape duty will be introduced in October, alongside a one-off increase in tobacco duty.
"I'll make a one-off adjustment to rates of passenger duty on non-economy flights [...] to account for high inflation in recent years," Hunt continues.
Resources will also be directed to HMRC, in a bid to ensure everyone pays owed tax, boosting public tax revenue.
The highest rate of property capital gains tax will be reduced from 28% to 24%, while taxes on second homeowners will also change.
Stamp duty relief for people buying more than one dwelling, which Hunt says is regularly abused, will be abolished.
1:20pm: Drones to help fight crime
Some £230 million will be spent rolling out "time and money-saving" technologies for fighting crime and improving police response times, including drones.
1:13pm: Public spending planned growth held
Day-to-day spending will continue to increase by 1% a year in real terms, Hunt says, but the money will be "spent better," he claims.
"Today I am announcing a landmark public sector productivity plan that restores public service reform and changes the Treasury's traditional approach to public spending."
The NHS productivity plan will be funded "in full" by the government, according to Hunt, with AI among technologies set to be used in the process of fully digitalising the service.
An extra £2.5 billion will also be given to the NHS. Hunt says: "This will allow the NHS to continue its focus on reducing waiting times."
1:08pm: British ISA confirmed
A so-called British ISA, aimed at encouraging investment in UK companies, will be created, including an extra £5,000 tax-free allowance.
10.06pm: Energy measures unveiled
Great British Nuclear will begin the next phase of the UK's small modular reactor rollout, with firms being given until June to submit initial designs for assessment.
"We want nuclear to provide up to a quarter of our electricity by 2050," Hunt reiterates.
Up to £120 million will also be unlocked for the green industry by January, aimed at accelerating supply chains for new technologies, such as offshore wind, carbon capture and energy storage.
1.01pm: NatWest share retail sale to take place "this summer"
"We'll proceed with the retail sale for part of the government's remaining [stake] this summer at the earliest opportunity, subject to supportive market conditions of value for money," Hunt says.
12:51pm: Further steps to boost investment
Full expensing, unveiled in last year's autumn statement, will apply to leased assets as soon as viable, Hunt announces.
The recovery loan scheme will also be dealt a £200 million boost as it transitions to the growth guarantee scheme.
The registration threshold for VAT registration will be lifted from £85,000 to £90,000 meanwhile - the first increase in seven years - aimed at extending help to more small and medium-sized businesses.
Hundreds of millions of pounds worth of funding will be offered to support cultural growth in the likes of Dundee, Redditch and Coventry.
Funding to develop Canary Wharf and Cambridge as science hubs will also be unlocked.
Money will be directed to "houses for young people," alongside for funding community-led housing projects.
12:45pm Fuel duty freeze extended
A 5p freeze on alcohol duty will be extended, Hunt says, with a freeze on rates staying in place for another 12 months after being due to end this month.
12:43pm: Alcohol duty freeze extended
"We value our hospitality industry and are backing the great British pub," Hunt says, as he extends the alcohol duty freeze until February 2025.
This could help benefit 38,000 pubs, he adds, with the freeze having previously been due to end in August.
12:41pm: Office for Budget Responsibility forecasts to start, households helped with debt
Forecasts show inflation falling below the Bank of England’s 2% target “in just a few months time,” Hunt remarks.
“We understand that tackling inflation, while necessary, is painful. It means higher interest rates at a period of lower growth.”
Hunt also announces an increased repayment period for those on the lowest incomes taking out new loans, from 12 to 24 months.
A £90 charge for debt relief orders will also be scrapped.
12:35pm: Budget statement begins
Hunt has now begun to deliver his budget, with PMQs having finished.
Among his opening remarks, Hunt repeats his earlier words: "Lower taxes mean higher growth."
Follow for live updates.
12:30pm: FTSE 100 higher ahead of Budget
Jeremy Hunt’s statement is just moments away now, with London’s blue-chip index up 21 points at 7,667 ahead of the announcement.
“The market focus on the Spring Budget will ultimately come down to three things,” Deutsche Bank analysts said ahead of Hunt’s statement.
“First, how much fiscal loosening, including the size of the 2024/25 gilt remit.
“Second, how sustainable are the Chancellor's medium-term fiscal plans.
“And third, how much fiscal headroom left for another fiscal event later this year.”
12:20pm: Hunt’s pre-Budget message
“The economy has turned a corner,” Hunt said in a social media video this morning.
“We’ve worked so hard to get through the really challenging period that we’ve come through.”
“We can see now the economy is set for healthy growth.”
We’re sticking to the plan. pic.twitter.com/kJefyMKndc
— HM Treasury (@hmtreasury) March 6, 2024
12:15pm: How much will it all cost?
Prime Minister’s Questions are well underway, with Jeremy Hunt’s budget next on the agenda.
Hunt’s expected tax cuts are set to cost the Treasury billions, but these balanced by spending reductions and new or increased taxes elsewhere.
Here’s a quick overview of what the Budget balance sheet could shape up to look like and perhaps even a leak showing what we can expect:
In 1947, Hugh Dalton "revealed a sentence of the budget to a reporter minutes before delivering his budget speech. Prime Minister Clement Attlee accepted his resignation".
In 2024: pic.twitter.com/x8HxHujVk9
— Giles Wilkes (@Gilesyb) March 6, 2024
11.55am: Spring Budget next after PMQs
Rishi Sunak will face Prime Minister's Questions shortly at noon, with the Chancellor then set to deliver his statement at 12:30pm.
Here's a brief list of all that Hunt is expected to, and has been urged to, address in the Budget:
- National insurance cut
- Income tax cut
- Fuel duty freeze extension
- Energy levy extension
- Air duty increase
- Manufacturing package
- AI and drone funding
- Non-dom status tweaks
- Vape duty introduction
- Tobacco duty increase
- Second homeowner rules
- Great British ISA
- Business rate changes
- Spending cuts
11.35am: What to expect from the Spring Budget
Chancellor Jeremy Hunt will unveil the Spring Budget today at 12:30, in what will be a key moment for Rishi Sunak’s government ahead of the impending general election.
Sweeping handouts are therefore expected as Hunt looks to tempt voters, including through the likes of national insurance, fuel duty and potentially even income tax cuts.
Read: National insurance, income tax and fuel duty cuts expected in Spring Budget
A 2p cut to national insurance from April has effectively been confirmed, according to reports, following a reduction in last year’s Autumn Statement, which took effect in January.
A 5p cut to fuel duty, which has been frozen since mid-2022 until this month, is also expected to be extended for a year.
Then comes income tax. Hunt had reportedly ruled out a change on Tuesday over fears of fuelling inflation, but could now introduce a 1p cut, as per a Politico-cited cabinet member.
Given such cuts are expected to cost the Treasury a combined £22 billion annually, reductions in public spending are said to be more than likely to take place.
These are set to coincide with new and increased taxes in other areas, given Hunt’s fiscal headroom is said to sit around £20 billion, as noted by XTB analyst Kathleen Brooks.
This will likely see the introduction of a vape duty, increased tobacco duty, reductions in tax breaks for second homeowners who let out the property for holidays, an extension of the energy windfall tax, and tweaks to tax rules on those with non-domiciled status.
A Great British individual savings account (ISA) could well also be in the works, in a bid to encourage investment in the UK.