Here’s All You Need To Know About Jeremy Hunt’s Spring Budget 2023

On Wednesday 15th March, Jeremy Hunt revealed the 2023 spring Budget in a speech to MPs at the Houses of Parliament. Since becoming Chancellor in October last year, Hunt has already reversed most of the strategies set out in the disastrous September 2022 mini-Budget. Expanding on plans set out in the autumn Budget, the new spring Budget outlines Hunt’s economic strategy which echoes his earlier desire to halve inflation, decrease debt and grow the economy. 

According to the International Monetary Fund (IMF), the UK’s economy is the worst performing out of all of the G7 countries. In order to try and revitalise our economy, the Chancellor has revealed that he will implement measures to promote ‘prosperity with a purpose’.

Why is the Budget important?

 The Budget presents the Government’s plans to address key areas of the economy  including education, pensions and taxes. In order to independently review the country’s economic direction, the Office for Budget Responsibility (OBR) evaluates the Budget to predict the long-term economic impact.
After considering Hunt’s spring Budget, the OBR forecasts that the UK will successfully avoid recession, shrink inflation and decrease underlying debt.

What does the spring Budget set out?

For those looking to understand the highlights of the spring Budget, below is a summary of the Chancellor’s statement. You can read the Budget Report in full on the HM Treasury website.

Energy:

• Energy Price Guarantee, where annual household energy bills capped at £2500, will remain for a further 3 months until June.
• The Energy Bills Support Scheme of £67 per month paid directly to your energy supplier will continue for a further 3 months Until June.
• Charges for prepayment metres will be made comparable with customers paying via direct debit.
• £20bn investment in carbon capture technology.
• Commitment to invest in renewable energy sources so that by 2050 a quarter of the UK’s electricity is supplied by nuclear power.

Childcare:

• From April 2024, working parents with 2 year olds will have access to 15 hours of free childcare.
• From September 2024, working parents with children 9 months and over will also have access to 15 hours of free childcare.
• From September 2025, every working parent with 5 year olds and under will have access to 30 hours of free childcare per week.
• Families on Universal Credit to receive up-front childcare support of up to £951 per month for one child and £1630 for two children.

Pensions:

• The Lifetime Allowance (LTA) will be abolished from 6th April 2024. No pension savers will face the LTA charge in the 2023/24 tax year.
• Tax free cash will be limited to a quarter of the current LTA which means a maximum amount of £268,275.
• The Annual Allowance (AA) of £40,000 will rise to £60,000.
• Money Purchase Annual Allowance (MPAA) and minimum Tapered Annual Allowance (TAA) will increase from £4,000 to £10,000.

Taxes:

• 5p fuel duty cut on petrol and diesel to be extended for another year.
• Alcohol taxes in pubs will be 11p lower than the rate in supermarkets from August.

Employment:

• Returnership schemes to be offered to over 50s wanting to get back into employment.

Disability:

• Work Capability Assessment abolished.
• New voluntary employment scheme for up to 50,000 disabled people called Universal Support.
• Funding to finance Work Coaches who support disabled and long-term sick people return to work.

Businesses:

• Main rate of corporation tax will increase from 19% to 25%.
• Companies are encouraged to lower taxable profits by deducting investment in innovative new machinery and technology.
• Announcement of 12 new Investment Zones across the UK which will receive £80m funding over the next 5 years.

Defence:

• £11bn investment in defence sector over the next 5 years.