Jeremy Hunt is soon due to update the government’s tax and spending plans as he delivers his first official budget as Chancellor.
The ‘Spring Budget’ will be announced in Parliament on Wednesday (15 March), with the Office for Budget Responsibility (OBR) set to publish its latest five-year forecasts for the country’s economy and public finances on the same day.
It comes at a slightly less tumultous time than Hunt’s Autumn Statement, when the Chancellor laid out a five-year package of tax hikes and spending cuts as he scrapped much of what had been announced in Liz Truss and Kwasi Kwarteng’s disastrous mini budget. This, he said, would help restore the UK’s economic credibility and help steer the country through a recession.
But while there is less chaos in the financial markets at the moment, a cost of living crisis is still plaguing UK families and households, strikes are continuing to bring the country to a halt, and energy bills remain sky-high due to the war in Ukraine. The government is therefore under intense pressure to cut taxes, meaning Hunt has a fair amount to deal with in his upcoming statements.
Here’s everything you need to know about the highly-anticipated fiscal statement.
When is the Spring Budget?
Hunt previously told MPs that he will deliver his Spring Budget on 15 March 2023 - and this date has not changed. The announcement usually takes place after Prime Minister’s Questions (PMQs), around 12.30pm, and can last up to an hour.
In a written statement announcing the Budget, Hunt said: “I can inform the House that I have asked the Office for Budget Responsibility (OBR) to prepare a forecast for March 15 2023 to accompany a Spring Budget.
“This forecast, in addition to the forecast that took place in November 2022, will fulfil the obligation for the OBR to produce at least two forecasts in a financial year, as is required by legislation.”
How do I watch live on TV?
NationalWorld will stream the Spring Budget live on our page here. You can also watch the financial statement on Parliament Live TV.
What could be announced?
We have already been given a vague idea of some of the new policies Hunt will announce during the Spring Budget 2023. These include:
- ‘Back to work’ measures
- Energy bills changes
- Defence Budget increase
- Possible rise to alcohol duties
Something else reportedly on the table for the Spring Budget will be a decision on whether or not to boost investment incentives to business, which would help offset April’s planned increase in corporation tax from 19% to 25%. Other predictions include the Chancellor addressing interest rates and taking a look at the impacts of the subsequent interest rate increases from the Bank of England.
Meanwhile, Prime Minister Rishi Sunak previously hinted at possible tax cuts in the government’s fiscal update. During a speech in January, he claimed he did not want to “pre-empt” the Spring Budget, but did say that he would like to cut taxes as soon as possible.
He said: “I think work provides people with purpose, provides them with dignity and confidence. It’s something to be celebrated and rewarded, which is why as soon as we are able to I want to cut taxes on working people.”
Hinting that the Chancellor may lower taxes with his next statement, Sunak continued: “That’s something that I think the Chancellor is also aligned on, but right now we’ve got a set of challenges that we’re grappling with, and that’s the priority.”
What was said in the Autumn Statement?
In November, in his last, although unofficial, financial statement, Hunt announced a range of new measures which he said would help curb inflation, stabilise the UK’s economy and tackle the cost of living crisis. This included a series of tax rises, which amounted to an effective U-turn on the tax-slashing mini budget previously announced by Kwarteng and Liz Truss.
Some of the key announcements included reducing the threshold of the 45p income tax rate from £150,000 to £125,140, as he said the government would be “asking more from those who have more”, and freezing the income tax personal allowance threshold until 2028, meaning millions of people will pay more in tax.
He also confirmed more targeted energy bills support for the most vulnerable members of society, but simultaneously revealed that from April 2023, the Energy Price Guarantee that currently caps bills at £2,500 will rise to £3,000 for the average household.
Similarly, Hunt announced a “difficult” public spending squeeze as he strives to deal with inflationary pressures, but also unveiled, to the surprise of some, that healthcare and education budgets will be protected - with spending in these sectors actually set to increase.