Budget announcement RECAP: Jeremy Hunt's Spring Budget as it happened with pension, fuel duty, and energy bill changes
As part of a package aimed at helping with the cost of living, the Chancellor said the energy price guarantee, which caps average household bills at £2,500, will be extended at its current level from April to June.
It had been due to rise to £3,000 in April and the cost of scrapping the planned 20% increase will amount to about £3 billion.
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The fuel duty freeze and the 5p cut will be maintained for another year, saving the average driver around £100.
Jeremy Hunt confirmed nuclear power would be classed as “environmentally sustainable” to drive investment in the energy sector, and said he would launch “Great British Nuclear” to bring down costs
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Budget announcement RECAP: Jeremy Hunt announces Spring Budget with pension, fuel duty, and energy bill changes
Pothole targetting
Jeremy Hunt said the £500 million allocated would be increased by a further £200 million next year to help communities “tackle this problem”.
Mr Hunt also said: “For Scotland, Wales and Northern Ireland this Budget delivers not only a new investment zone but an additional £320 million for the Scottish Government, £180 million for the Welsh Government and £130 million for the Northern Ireland Executive as a result of Barnett consequentials.
“On top of which in Scotland, I can announce up to £8.6 million of targeted funding for the Edinburgh Festivals as well as £1.5 million funding to repair the Cloddach Bridge.
“I will provide £20 million of funding for the Welsh Government to restore the Holyhead Breakwater and, in Northern Ireland, I am allocating up to £3 million to extend the Tackling Paramilitarism Programme and up to £40 million to extend further and higher education participation.”
Nuclear classed as ‘enviornmentally friendly’
Jeremy Hunt confirmed nuclear power would be classed as “environmentally sustainable” to drive investment in the energy sector, and said he would launch “Great British Nuclear” to bring down costs.
The Chancellor said: “To encourage the private sector investment into our nuclear programme, I today confirm that subject to consultation nuclear power will be classed as ‘environmentally sustainable’ in our green taxonomy, giving it access to the same investment incentives as renewable energy. Alongside that will come more public investment.”
Announcing “two further commitments to deliver our nuclear ambitions”, he added: “Firstly, following representations from our energetic Energy Security Secretary I am announcing the launch of Great British Nuclear which will bring down costs and provide opportunities across the nuclear supply chain to help provide up to one quarter of our electricity by 2050.
“And secondly, I am launching the first competition for small modular reactors. It will be completed by the end of this year and if demonstrated to be viable we will co-fund this exciting new technology.”
The Chancellor announced an “AI sandbox” to boost support for artificial intelligence businesses in the UK, as well as a “quantum strategy” to support the future of computing.
Jeremy Hunt said: “I can report to the House that we will launch an AI sandbox to trial new, faster approaches to help innovators get cutting edge products to market, work at pace with the Intellectual Property Office to provide clarity on IP rules so generative AI companies can access the material they need, and ask Sir Patrick Vallance’s successor, Dame Professor Angela McLean, to report before the summer on options around the growth duty for regulators.”
He added: “Because AI needs computing horsepower, I today commit around £900m of funding to implement the recommendations in the independent Future of Compute Review for an Exascale supercomputer. The power that AI’s complex algorithms need can also be provided by quantum computing.
“So today we publish a quantum strategy which will set our vision to be a world leading quantum enabled economy by 2033 with a research and innovation programme totalling £2.5 billion.”
The chancellor says a white paper is being published today on disability benefits, including plans to abolish the work capabilty assessment and to separate benefits entitlement from an individual’s ability to work.
As a result, he says, disabled benefit claimants will always be able to seek work without fear of losing financial support.
Lifetime allowance change
A change we expected as Jeremy Hunt announces plans to get older people back into work, the Chancellor announced plans to abolish the lifetime allowance limit on pensions.
Jeremy Hunt told the Commons: “Finally, I have listened to the concerns of many senior NHS clinicians who say unpredictable pension tax charges are making them leave the NHS just when they are needed most. The NHS is our biggest employer, and we will shortly publish the long-term workforce plan I promised in the Autumn Statement. But ahead of that I do not want any doctor to retire early because of the way pension taxes work.”
He added: “As Chancellor I have realised the issue goes wider than doctors. No one should be pushed out of the workforce for tax reasons. So today I will increase the pensions annual tax-free allowance by 50% from £40,000 to £60,000. Some have also asked me to increase the Lifetime Allowance from its £1 million limit. But I have decided not to do that.
“Instead I will go further and abolish the Lifetime Allowance altogether.”
Mr Hunt said the changes would “stop over 80% of NHS doctors from receiving a tax charge” and incentivise “our most experienced and productive workers to stay in work for longer”.
Institute for Fiscal Studies (IFS) director Paul Johnson said the Chancellor is missing a “serious long term strategy” on pension tax policy.
“‘Listened to concerns of senior NHS clinicians’ says Mr Hunt,” he tweeted.
“Changing pension tax relief as a result. Should have changed NHS (and other public sector) pension schemes. Sledgehammer to crack a nut.
“There is a case for raising annual and lifetime allowances – reversing last 13 years of policy. But won’t have much effect on employment. And damaging and complex tapering system remains.
“Pension tax policy needs a serious long term strategy. Such a strategy completely missing.”
Sir Keir Starmer is not on his feet, saying that “this Budget changes nothing” after a 55 minute address from Jeremy Hunt.
He accused the Conservative Government of being “out of touch”.
Responding to Jeremy Hunt’s Budget in the Commons, he said: “So for all the hype, a Budget for growth that downgrades the growth forecast.
“His opening boast was that things aren’t quite as bad now as they were in October last year after the ‘kamikaze’ budget and the more that he pretends everything is fine, the more he shows just how out of touch they are.”
Institute for Fiscal Studies (IFS) director Paul Johnson said the Chancellor is missing a “serious long term strategy” on pension tax policy.
“‘Listened to concerns of senior NHS clinicians’ says Mr Hunt,” he tweeted.
“Changing pension tax relief as a result. Should have changed NHS (and other public sector) pension schemes. Sledgehammer to crack a nut.
“There is a case for raising annual and lifetime allowances – reversing last 13 years of policy. But won’t have much effect on employment. And damaging and complex tapering system remains.
“Pension tax policy needs a serious long term strategy. Such a strategy completely missing.”
Sir Keir Starmer says the Budget spell out the problems of the economy, with Britain facing a “year of stagnation and “non-existent” growth adding that the UK is the worst performing nation in the G7, adding that the country has spent “13 years stuck in a doom loop” under Tory governments.
“This is a failure you can measure not just in the figures but in the empty pockets of working people right across the country. 13 years without wage growth. 13 years no better off. 13 years stuck in a doom loop of lower growth, higher taxes and broken public services.”
He said the OBR had made clear “things don’t look any better in the long run”.
He added: “A broken labour market holding back our prospects, seven million on the NHS waiting lists, ill-health and disability on the rise. And the consequences, as we’ve just heard, deferred to the future.
“The classic short-term sticking plaster cycle. Decisions cynically ducked today. Pain for working people tomorrow. It doesn’t have to be like this.”
