Spring Budget update

Chancellor Jeremy Hunt’s Spring Budget brought some good news (we are avoiding a technical recession, there will be increases to future child care support and pension pot caps, announcements of  investment zones and further devolution of powers to the local level were all generally welcomed.) Mr Hunt was keen to point out existing cost-of-living support and announced a list of measures to ‘boost economic growth, bolster productivity and support the labour force.’

Inflation is still a big issue and as energy bill support was due to end in April, the Chancellor also announced:

•            The Energy Price Guarantee will remain at the current level of £2,500 until the end of June, saving the typical household £160.

•            A new £63 million swimming pool fund will be used to help support community leisure centres to remain open and accessible.

•            Alcohol duty paid on draft beer frozen and newly termed the  ‘Brexit Pubs Guarantee’.

•            Fuel Duty for motorists will be frozen for a further 12 months.

•            £33 million to support UK Veterans.

The Office of Budget Responsibility (OBR)  predicted inflation to at least halve, reducing to 2.9% by the end of the year. To support further reduction he announced-

•            12new investment zones to function similarly to Canary Wharf’s example.

•            £1 billion ‘Levelling-Up’ fund for local communities and £400 million for regional economic partnerships and identification of  barriers to business growth.

•            SMEs rebate of £27 back on every £100 they spend on research and development.

•            A £20 billion fund for carbon-capture technology.

•            Parents with children aged nine months to four years old will receive 30 hours of free childcare a week post 2025.

•            Abolition of lifetime allowance on pensions (£1,070,000)

•            Increase of annual allowance on pensions to £60,000.

Shadow Chancellor, Rachel Reeves was straight onto the pension pot- declaring that ‘under the Tories, the top 1% of pension savers only will receive a £1bn tax break. This is the wrong priority, at the wrong time, for the wrong people.’ The Party has secured a debate and is voting against the decision.

After the dust has settled and the weekend has allowed some examination and discussion around the announcements, public opinion is divided on this week’s Budget outcomes. The most recent poll (Ipsos- 1000) shows 13% of felt more reassured about their personal finances, 22% about the economy and 12% saying the same about the state of Britain’s public services.

35% said it had made them more concerned about the economy and public services, while 37% said they were more concerned about their own finances. The best outcome for the Chancellor is that the public’s reaction is more positive than after the Chancellor’s autumn statement in November.

Extending the energy price guarantee until June was backed by 74% of people, 70% supported maintaining the fuel duty freeze and 59% said they were in favour of expanding free childcare provision, although many complained that the assistance is actually still some time away.

It may be too soon to decide whether this Budget has done the trick in balancing the demands of the ‘growers’ or the ‘stickers’ within the Conservative Party, shoring up support for the more managerial Prime Minster styles of Rishi Sunak and Chancellor Hunt than we have been used to under Boris Johnson and Liz Truss.

There will be some more debate in the Chamber this week as well as votes that should indicate if they’ve managed to pull it off. However, the background rumble of Boris Johnson’s Privileges Committee Inquiry will become a roar this week as it takes centre stage elsewhere in Parliament and we must hope the Budget votes do not become proxies for the outcome many backbenchers would prefer.