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
Missed The Budget?
Here’s a look at some of the key points
- Jeremy Hunt announced the scrapping the lifetime allowance on tax-free pension contributions, which is currently £1.07m. The pensions annual tax-free allowance is being raised by 50 per cent from £40,000 to £60,000.
- Fuel duty has been frozen for another year and government support for energy bills, the energy price guarentee, extended for another three months. The fuel duty freeze and the 5p cut will be maintained for another year, saving the average driver around £100.
- Defence spending is being boosted by £11bn over the next five years and corporation tax will be increased from 19% to 25% as expected
- Nuclear power will be classed as “environmentally sustainable” which will give it access to the same investment incentives as renewable energy.
- Underlying debt is forecast to be 92.4% of gross domestic product (GDP) next year, 93.7% in 2024-25; 94.6% in 2025-26, and 94.8% in 2026-27, before falling to 94.6% in 2027-28.
- Some 12 new investment zones will be created, offering up to £80 million of support each for tax breaks and incentives.
- Small businesses investment allowance increased to £1m
“The sick man of Europe”
If you tuned in to the Budget you will have heard the phrase “Sick man of Europe”
Sir Keir Starmer said Britain is the “sick man of Europe once again” and the Budget shows the “expiry date looms ever closer” for the Conservatives.
The Labour leader said years of Tory-led governments have led to a “doom loop of lower growth, higher taxes and broken public services” and put the country on a “path of managed decline”.
He criticised Chancellor Jeremy Hunt for “dressing up stagnation as stability”, adding of the public: “They deserve better than another cheap trick from the Government of gimmicks, making them pay whilst trying to claim the credit.”
Rising to respond to Mr Hunt’s hour-long financial statement, Sir Keir mocked the Government over recent salad shortages in supermarkets and Environment Secretary Therese Coffey’s suggestion of a greater reliance on turnips to avoid such a situation.
He told the House of Commons: “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.”
The Scotch whisky industry has been dealt a “historic blow” after Chancellor Jeremy Hunt announced one of the largest tax hikes in recent decades, the sector has warned.
Mr Hunt raised duty on Scotch whisky by 10.1 per cent, in a move the industry said broke the UK Government’s pledge to “review alcohol duty to ensure our tax system is supporting Scottish whisky”.
Critics said distillers were being “hung out to dry”.
More on that decision from Jeremy Hunt in today’s Budget to reclassify nuclear energy as “environmentally sustainable” to give it the same access to investment incentives as renewables
Caroline Lucas, Green Party MP for Brighton Pavilion, said he had “utterly failed” to mention a fifth – environment.
She said: “Just when we needed a solar rooftop revolution, an unblocking and upscaling of renewables, a major street-by-street mass insulation programme, and a commitment to invest in our totally neglected, sewage-filled rivers and seas, we get too slow, too expensive and too dangerous nuclear white elephants.
“A budget that fails to protect our environment gravely risks damaging our economy too.”
Public Accounts Committee chairwoman Dame Meg Hillier said changes to pensions allowances will not stop the “exodus of people leaving”.
The Labour MP for Hackney South and Shoreditch welcomed the announcement on childcare but warned: “The Chancellor is borrowing from (former prime minster Liz Truss’s) play book. She was the minister who proposed this ‘pile them high and teach them cheap’ approach to childcare.
“And I worry about the change in ratios – heartened that it’s only voluntary, but these voluntary changes creep in.”
On pensions, Dame Meg said: “The lifetime allowance is being abolished: That helps the richest 1% but nothing for the poorer workers who are in auto-enrolment, which is a good first step but nowhere near enough to stop the ticking time bomb that will be poorer pensioners in the future that will cost the Exchequer in terms of benefits in years to come.
“And it will do nothing I think to reverse the exodus of people leaving. It might stop some people in their tracks and make them think, but many will have already made their pension plans.”
She also told MPs: “They have nothing to offer generation rent, people desperate for council housing who can’t afford to rent privately, and they’ve done nothing on that, and I’m very concerned.”
Energy company EDF has turned down a Government request to keep its coal power plant in Nottinghamshire available in case of emergency next year.
The energy giant said that its West Burton A site – which sits between Doncaster and Lincoln – “will close as planned on 31 March 2023, in line with the agreement signed last year”.
Business groups have said their members will struggle to keep their doors open from next month as the Government ignored calls for extra support to help companies pay their energy bills.
Despite extending current support levels for households, the Chancellor did not promise anything new for businesses.
Companies are set to see their energy bills soar from the start of April as the current more generous support package is slashed.
“As April 1 rapidly approaches, businesses are also nervously awaiting what’s next for their energy costs and a lack of support in today’s announcement will have a direct impact on their ability to keep their lights on and doors open,” said Emma McClarkin, chief executive of the British Beer and Pub Association.
The Chancellor did not mention business energy bills at all in his speech to the Commons on Wednesday afternoon.
In an accompanying document, the Treasury said the new support will give businesses a discount on their bills.
However, businesses say it will not be nearly enough. Nearly half of businesses surveyed by the British Chambers of Commerce (BCC) said they would struggle to pay their energy bills from the start of April.
And that brings this blog to a close.
Chancellor Jeremy Hunt has unveiled the contents of his first Budget in the House of Commons, and we will have more on Scotsman.com
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