Budget 2024 - live: Hunt and Starmer ‘in conspiracy of silence’ as Britain faces hardest five years since WWII
‘We could be in for a rude awakening’ after election, says head of top economic think tank
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Both the Conservatives and Labour are engaged in a “conspiracy of silence” about what will happen to the public finances after the election, the head of a leading economic think tank has said.
Responding to the spring Budget, Paul Johnson, director of the Institute for Fiscal Studies, said both parties were not being straight about the “scale” of the trade-offs they will face after voters go to the polls.
“They, and we, could be in for a rude awakening when those choices become unavoidable,” he told a press conference on Thursday.
Mr Johnson also warned that the UK was facing its most difficult period financially since the Second World War.
“The combination of high debt interest payments and low forecast nominal growth means that the next parliament could well prove to be the most difficult of any in 80 years for a chancellor wanting to bring debt down,” he said.
Chancellor should have cut income tax not NI, argues Sir David Davis
The Chancellor should have cut income tax rather than national insurance, Conservative former minister Sir David Davis has said, claiming it would have incentivised more workers over 65 to remain in work.
Tory grandee Sir David told the Commons: “If I had my way I would not have gone for national insurance, I would have gone for reducing income tax.
“Why do I say that? Well there has been a lot of assertions made in the public domain… that national insurance is less inflationary than income tax.
“This is bogus nonsense. The only argument they have to support that is that national insurance will pull into the employment pool, some tens of thousands more people. Well, so will cutting income tax.
“Indeed, because income tax applies to people over the age of 65 it will also keep people in the workforce, highly skilled, highly capable people who we don’t want to retire at the moment.”
Vapes hit with new tax in Budget as part of Jeremy Hunt’s crackdown on smoking
Jeremy Hunt has announced a new tax on vapes as the government moved to crack down on smoking in the spring Budget.
The chancellor introduced a levy on the smoking alternatives in a bid to make them unaffordable for children. He said the move would take effect from October 2026.
It comes after the government in November last year made plans for a “smoke-free” generation by banning tobacco products for children turning 14 or younger.
Matt Mathers reports:
Vapes hit with new tax in Budget as part of Jeremy Hunt’s crackdown on smoking
Move comes after government in November last year made plans for a ‘smoke-free’ generation
Treasury Committee chairwoman welcomes child benefits charge changes
Treasury Committee chairwoman Harriett Baldwin has welcomed the Chancellor’s Budget and said increasing the high income child benefit charge would remove the disincentive of taking on work above £50,000.
The Government is set to increase the threshold at which the high-income child benefit charge starts from £50,000 to £60,000 from April.
The Conservative MP for West Worcestershire told the Commons: “It was great to hear the Chancellor today really focus on addressing this high-income child benefit charge.
“When we brought it in, and I voted for it at the time, £50,000 a year was a high rate of income. With the progress in terms of higher incomes, the median income in those days was about £22,000, now the median income is about £35,000 and so £50,000 these days is not more than about 40% over the median income.
“And that’s why it was absolutely right today that the Chancellor recognise that in his Budget statement, and he has made the taper that much less of a disincentive to people taking on work above that income level.
“Of course I would have loved to have seen him do more, but I am very grateful for what he has done.”
Hunt says £100k personal donation to local Tory party shows ‘commitment’ to area
Jeremy Hunt has admitted giving £100,000 of his own money to his constituency Conservative party, arguing “it’s a free country” and that it demonstrated his “commitment” to the area.
The Chancellor is seeking to boost his chances of re-election in his Godalming and Ash seat, amid warnings he is set to be ousted at the general election later this year.
The Surrey constituency is a key target seat for the Liberal Democrats as they aim to demolish the Conservative “Blue Wall” in southern England.
Sophie Wingate reports:
Hunt says £100k personal donation to local Tory party shows ‘commitment’ to area
The Chancellor was accused of ‘running scared of losing his own seat’ by the Lib Dems, who are targeting his Surrey constituency at the election.
Inflation to fall below 2% target in ‘next few months’, says OBR
Inflation is set to drop below the Government’s 2% target rate within a “few months” as the fiscal watchdog upgraded economic growth predictions for the next two years.
But the Office for Budget Responsibility (OBR) also warned that the slowdown in inflation could be knocked off course by disruption in the Middle East and surge by as much as 7% in a worst-case scenario.
The fresh economic forecasts came as Chancellor Jeremy Hunt confirmed a 2p cut in national insurance for employees and the self-employed during the important pre-election Budget.
Henry Saker-Clark reports:
Inflation to fall below 2% target in ‘next few months’, says OBR
The Office for Budget Responsibility also warned that the slowdown in inflation could be knocked off course by disruption in the Middle East.
Budget shows Tories continuing with ‘austerity agenda’, says Northern Ireland’s First Minister
Northern Ireland’s First Minister Michelle O’Neill said the Budget showed the Conservative Party continuing with its “austerity agenda”.
Speaking during a visit to a GAA club in Belfast, Ms O’Neill said: “We still need to see some of the detail but I think it’s fair to say that a general observation would be the Tories are continuing with an austerity agenda.
“We still have work to do in terms of securing a proper financial framework for here and that remains a work in progress for us.
“There are some Barnett consequentials to come across, in terms of what has been set out today, there’s obviously a welcome drop in national insurance contributions, that will be helpful to workers and families.
“But by and large there’s no additional money for capital.”
Tax calculator: See how Jeremy Hunt’s spring Budget will affect you
Jeremy Hunt has unveiled a further 2 per cent cut to national insurance in his 2024 Budget, as the chancellor seeks to entice voters ahead of this year’s general election.
Combined with last autumn’s identical national insurance cut, Mr Hunt claims the two tax giveaways will leave the average worker £900 better off.
Other measures to support people that were announced on Wednesday include an extension of the Household Support Fund and a rise in the earnings threshold for child benefit, from £50,000 to £60,000.
Andy Gregory reports:
Tax calculator: See how Jeremy Hunt’s Budget will affect you
Use our Budget calculator to determine whether Hunt’s announcements will leave you better or worse off
Listen to Jeremy Hunt’s U-turn on non-dom taxes over two years
Listen to Jeremy Hunt’s U-turn over abolishing the non-dom tax status across two years.
In November 2022, the chancellor told BBC Radio 4’s Today programme that he would rather the super-rich “stayed here and spent their money here”.
“The Treasury did not tell me it was going to help the economy to do this, that’s why I chose not to do it,” he said at the time.
However in Wednesday’s (6 March) Budget, Mr Hunt committed to scrapping the non-dom status for wealthy foreigners, putting the £2.7 billion a year raised as a result towards tax cuts, mirroring a Labour policy.
Holly Patrick reports:
Listen to Jeremy Hunt’s U-turn on non-dom taxes over two years
Listen to Jeremy Hunt’s U-turn over abolishing the non-dom tax status across two years. In November 2022, the chancellor told BBC Radio 4’s Today programme that he would rather the super-rich “stayed here and spent their money here”. “The Treasury did not tell me it was going to help the economy to do this, that’s why I chose not to do it,” he said at the time. However in Wednesday’s (6 March) Budget, Mr Hunt committed to scrapping the non-dom status for wealthy foreigners, putting the £2.7 billion a year raised as a result towards tax cuts, mirroring a Labour policy.
Rachel Reeves: Budget ‘lifts lid on 14 years of Tory economic failure’
Rachel Reeves has said the Budget has “lifted the lid on 14 years of Tory economic failure”.
Writing on X, formerly Twitter, the shadow chancellor said: “The Chancellor’s Budget has lifted the lid on fourteen years of Tory economic failure.
“Taxes are still rising, prices are still going up in the shops and mortgages are higher.
“Nothing Jeremy Hunt has said today changes that. It’s time for change. It’s time for an election.”
Sir Jacob Rees-Mogg criticises plans to abolish non-dom status
Sir Jacob Rees-Mogg criticised plans to abolish the non-dom status and to extend a windfall tax on oil and gas producers.
The Conservative former business secretary told the Commons he was “not at all keen” on plans to scrap the special tax status for non-domiciles.
Sir Jacob said: “The OBR (Office for Budget Responsibility) forecast expects 350,000 immigrants to come to this country net every year to 2028-29, that is built into their forecasts. We need to get control of that, we need to get control of the people who are coming in and undercutting the British workforce and lowering wages in things like social care.
“On the other hand, we want as many billionaires who are willing to come because they are very small in number and they contribute very largely to the economy. Attacking them, making it harder for them, may mean stealing the Labour Party’s clothes but is not good economic policy.”
Speaking about his opposition to extending the oil and gas windfall tax, the Tory former minister added: “We need more oil and gas. One of the reasons our productivity has been low and our economy stagnant compared to the United States is our much higher energy prices.
“We need to wean ourselves from the green ideology which is making us cold and poor.”
He also criticised forecasting by the OBR, describing it as “telling” that Chancellor Jeremy Hunt started his speech by speaking about “how many things the OBR has gone wrong”, and described their forecasting as a “real problem for policy-making”.
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