5 key takeaways from Jeremy Hunt’s budget

A budget totally out of step with what people want and need.

Jeremy Hunt

Today saw Chancellor Jeremy Hunt deliver his much-awaited Spring Budget. The stakes couldn’t be higher, with the economy in recession, millions struggling to make ends meet and a forthcoming general election.

In what is likely to be the last budget, and possibly the final fiscal event before the general election later this year, Hunt sought to present a rosy picture of the economy, one which is totally divorced from reality.

A budget totally out of step with what people want and need, opinion polls have repeatedly shown that the British public prefer investment in public services rather than tax cuts. There was no plan bold and radical plan to get the UK economy out of economic stagnation, to tackle poor productivity or to improve public services.

Here are five key takeaways from Hunt’s budget:

1)2p National Insurance cut

As expected and has been reported before the budget, the Chancellor decided to cut national insurance by 2p, as part of a pre-election giveaway to voters.  There had previously been much discussion over whether Hunt would choose to cut national insurance or income tax, with the latter though to be more costly and inflationary.

Yet the national insurance cut will do little to help those most in need. The New Economics Foundation has already provided analysis showing that the national insurance cut will mean that the richest households stand to gain 12 times more than the poorest.

The NEF says that the tax cut would hand billions to the richest households while offering much less to those in need and adds: ‘It would cost us billions which we could spend on vital public services like schools or the NHS’.

2) Further cuts to public services

The Chancellor announced that borrowing will fall to just 1.2% of GDP over the next five years. Yet that figure is contingent on very tight spending plans which would mean deep cuts for many already stretched public services.

With our public services already on their knees, and with the public demanding more investment, the Tories have once more chosen not to listen, putting their own narrow interests ahead of those of the country.

3) Non-dom tax status will be “abolished”

Having run out of ideas themselves, and having opposed abolition of the non-dom tax status, the Tory party today confirmed that non-dom tax status will be abolished and replaced by a modern, simpler and fairer system from April 2025.

Downing Street has repeatedly defended non-domiciled tax status – as enjoyed by Sunak’s wife, but has now decided to adopt Labour’s policy.

4) 5p cut to fuel duty will be maintained

The chancellor announced that the 5p cut to fuel duty will be maintained, with a freeze extended for another 12 months.

The policy has been slammed as ‘regressive’ in some quarters, with the NEF posting on X that ‘it is a policy for wealthy SUV drivers, not people struggling with the cost of living crisis’. The think tank added: “It disproportionately benefits the richest households. (and that’s without even thinking about the environmental impact).

5) Oil & gas windfall tax extended

The windfall tax on oil and gas firms has been extended by 12 months in Jeremy Hunt’s Budget. The 35% surcharge on profits due to high energy prices had been scheduled to end in March 2028.

The move has been criticised by Tories in Scotland, with Douglas Ross posting on X: “There are many positive measures in the Chancellor’s Budget which I strongly support.

“However, while I accept he had some tough decisions to make, I’m deeply disappointed by his decision to extend the windfall tax for a further year.”

That sets the stage for yet more Tory infighting.

Basit Mahmood is editor of Left Foot Forward

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