Chancellor Jeremy Hunt has delivered the UK spring budget, his second statement since taking the job.
The budget took place today, 15th March 2023 in the House of Commons.
What is included in the spring budget?
The budget has laid out the government’s plans for raising and lowering taxes.
The chancellor also spoke on government plans for public spending, including on schools, health and defence.
What has been announced?
Energy Bills Support
The Government’s Energy Price Guarantee, which caps energy costs for households, seeks to cap energy bills for the average household at £2,500 per year, for another three months.
The Chancellor is expected to keep it at that level for another three months, from April to July.
From July, when the price guarantee ends, its expected bills will fall to £2,000 as wholesale gas prices fall.
Hunt announced that the annual tax-free allowance on pension savings will rise from £40,000 to £60,000, while the Lifetime Allowance, previously set at £1.07 million, will be abolished.
Jeremy Hunt said the government will increase funding paid to nurseries providing free childcare under the hours offer by £204 million from this September and rising to £288 million next year.
The government will increase the maximum they can claim to £951 for one child and £1,630 for two children, an increase of almost 50%.
Back to work
Hiring will remain difficult for the remainder of 2023.
“Long term problems that need immediate solutions.”
Public Sector Pay
They may look at coming back to unions with stronger pay deals for 2023/24 and it is widely expected that Mr Hunt will look at ways to drum up more cash to avert public sector walkouts.
Fuel Duty Cuts
The government’s 5p cut to fuel duty will be maintained and fuel duty will be frozen for the next 12 months, Hunt announces, saving the average driver £100 next year.
“Our Energy Price Guarantee, fuel duty and duty on a pint all frozen in today’s Budget. That doesn’t just help families, it helps the economy too because their combined impact reduces CPI inflation by nearly 0.75% this year, lowering inflation when it is particularly high,” Hunt says.
Tax paid by businesses is to rise from 19% to 25% in April.
This hike was scrapped in Kwasi Kwarteng’s disastrous mini-Budget last September as part of a tax cutting spree that triggered an economic meltdown.
The rise is now officially to go ahead.
Cigarettes and Alcohol
The price of a pack of cigarettes is expected to rise by £1.15 in line with RPI.
With booze duty to remain frozen until August.
The chancellor is keen to bolster Britain’s workforce as he looks to deliver on PM Rishi Sunak’s pledge of growing the UK’s stalling economy.
Inflation set to fall to 2.9% by the end of 2023
Inflation is projected to fall from 10.7% annually in the final quarter of 2022 to 2.9% by the end of 2023.