Budget 2024: Everything we know ahead of Jeremy Hunt’s statement

Jeremy Hunt under pressure to solve flatlining economy and alleviate cost of living crisis

Joe Middleton,Matt Mathers
Wednesday 06 March 2024 10:23 GMT
Jeremy Hunt is thought to be considering more tax cuts as he prepares to deliver what is likely to be the last Budget before the general election (Victoria Jones/PA)
Jeremy Hunt is thought to be considering more tax cuts as he prepares to deliver what is likely to be the last Budget before the general election (Victoria Jones/PA) (PA Wire)

Jeremy Hunt is set to deliver a crucial Budget for the Tory party on Wednesday as they languish behind Labour in the polls.

The pressure will be on Mr Hunt to deal with a spluttering economy that has entered a recession and help alleviate pressures from the cost of living crisis that continues to engulf the country.

Senior Tories have been strongly hinting that the chancellor could give the green light to tax cuts, either to national insurance or income tax, to try and woo voters back.

Here The Independent takes a look at what we can expect from the spring Budget:

When is the Budget?

Mr Hunt will step up to the dispatch box today and deliver his second Budget. It is likely to be the last major fiscal event before a general election that is likely to take place later this year.

The announcement will be in the House of Commons and usually comes at around 12.30pm.

Will Jeremy Hunt look to cut taxes?

In a boost for workers, it was confirmed on Tuesday the chancellor is expected to slice 2p from the rate of National Insurance after concluding income tax cuts would be too expensive and risk stoking inflation, which remained frozen at 4 per cent in January.

In an interview in early February Mr Hunt told the BBC’s Political Thinking podcast that his long-term goal was to “lighten the tax burden” for people.

The Financial Times reported earlier this year that the suggested tax cuts could come at the expense of unprotected areas of spending across government departments.

Asked ahead of the Budget if such tax cuts could come at the expense of cutting public services, the chancellor pointed to his record of championing extra investment in the NHS while he was health secretary.

Prime minister Rishi Sunak and chancellor Jeremy Hunt
Prime minister Rishi Sunak and chancellor Jeremy Hunt (Paul Ellis/PA Wire)

He said: “I am a passionate supporter of the NHS and all our public services, but in the long run the best thing that I can do as chancellor for the NHS is to make sure that our economy is growing healthily.

“So what you will see in everything I do in the Budget on March 6 is prioritising economic growth.”

Any possible planned tax cuts could be smaller than Mr Hunt would like after Office for National Statistics figures showed he has less money to spend than he had hoped. The most recent OBR forecast on Wednesday said he had around £12.5bn to spend.

In his broadcast interview round on Sunday ahead of the spring Budget, Mr Hunt stuck to the narrative outlined earlier in the year, telling broadcasters that he would only cut taxes in a “responsible” and “prudent” way.

What else could we see in the Budget?

Another scheme Mr Hunt is reportedly looking at is a “vaping products levy” which would be imposed on imports and manufacturers of vapes to try and make them unaffordable to children.

The duty would apply to the liquid in vapes, with an additional higher tax for any products that contained more nicotine. In addition there is likely to be a one-off tax on tobacco duty that will raise £500 million for Treasury, the newspaper added.

One thing Mr Hunt is expected to do is extend the fuel duty freeze that has been in place since 2011. The government has been seeking to create dividing lines with Labour and foster a “pro-car” narrative, so don’t expect prices to rise.

Despite its popularity with Tory backbenchers there has been very little to suggest that inhertitance tax will be reduced or scrapped.

Only four per cent of the wealthier end of the population pay the tax and it would be a gift to Labour with an election in just a few short months.

However, some experts have predicted Mr Hunt may opt to scrap the controversial “non-dom” tax status adopted by around 37,000 people living in the UK. This could raise an estimated £3.2bn for the government, and come with the additional political benefit of undercutting a major Labour policy.

However, Mr Hunt may seek to woo young voters by giving the green light for a 99 per cent mortgage scheme, as reported by The Daily Telegraph.

This would allow young people to have a much smaller deposit, as little as a few thousand pounds, with the rest of the funds being guaranteed by the government.

However major changes to Stamp Duty seem unlikely to take place, as the chancellor struggles to find fiscal headroom for broader tax cuts in other areas.

Over the weekend the government also announced an £800 million funding package for technology to help drive “efficiencies” in the public sector.

The Treasury said the money would be used to pay for drones and AI to free up the time of police and NHS workers to help tackle crime and reduce waiting times.

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