Jeremy Hunt Pledges More Aid for Energy Crisis in Upbeat First Budget Speech
16:33 GMT 15.03.2023 (Updated: 16:34 GMT 15.03.2023)
© AP Photo / Frank AugsteinBritain's Chancellor of the Exchequer Jeremy Hunt poses for the media with his traditional Red despatch box as he leaves 11 Downing Street for the House of Commons to deliver the Budget
© AP Photo / Frank Augstein
Chancellor Jeremy Hunt was accused of making a return to austerity with his November changes to his short-lived predecessor Kwasi Kwarteng's September mini-budget. But he has swung to the opposite pole with a spending plan full of apparent giveaways.
Jeremy Hunt has delivered his first full budget as Chancellor of the Exchequer — leaning on predictions that the UK will dodge a recession and inflation will fall.
“In the face of enormous challenges, I report today on a British economy which is proving the doubters wrong,” Hunt said, adding that inflation had “peaked.”
He announced that the Office for Budget Responsibility (OBR) had forecast that the UK “will not now enter a technical recession this year” — prompting cheers from the government benches and heckling from the opposition. The economy is even predicted to grow by 1.8 per cent in 2024, 2.5 per cent in 2025 and 2.1per cent in 2026.
Turning to the Prime Minister Rishi Sunak’s pledge to halve inflation, Hunt said its "destroys the value of hard-earned pay, deters investment and foments industrial strife" — acknowledging the latest wave of strikes by junior doctors and newsroom staff at state broadcaster the BBC, which disrupted coverage of his budget.
He boasted that the OBR had forecast inflation would drop from 10.7 per cent in the final quarter of last year to 2.9 per cent by the end of 2023.
"We are following the plan and the plan is working," Hunt insisted.
The chancellor announced that the Energy Price Guarantee scheme, which subsidised household gas and electricity bills to keep them below an average of £2,500 per year, would continue until June. But the £400 extra winter payment will be cancelled.
And he pledged to address the plight of the more than 4 million poorest households with pre-payment utility meters — many of which were forcibly installed by energy companies against their will until energy regulator Ofgem stepped in with a temporary suspension.
Hunt said the government would "go further" by lowering the higher pre-payment tariffs in line with those enjoyed by households billed from their bank accounts.
But the energy support package for businesses was dropped in the chancellor's budget — drawing criticism from Liberal Democrat treasury spokeswoman Sarah Olney.
© Sarah Olney/TwitterLiberal Democrat treasury spokeswoman Sarah Olney criticises Conservative Chancellor of the Exchequer Jeremy Hunt for failing to maintain energy bill support for businesses
Liberal Democrat treasury spokeswoman Sarah Olney criticises Conservative Chancellor of the Exchequer Jeremy Hunt for failing to maintain energy bill support for businesses
© Sarah Olney/Twitter
Hunt also announced £63 million in funding to help local authorities keep public swimming pools open in the face of high heating costs. That prompted more jeers from the opposition in the wake of media reports that workers had to upgrade the local electricity grid near Sunak's country home after he had a £500,000 heated pool installed.
Existing relief measures for theatres, orchestras and museums will also be extended.
In a bid to address shortcomings exposed by the conflict in Ukraine, Hunt said the Treasury would provide an extra £11 billion for the armed forces over the next five years, bringing defence spending up to 2.25 per cent of GDP by 2025. Another £33 million is earmarked to help military veterans over the same period.
Drivers and road hauliers hit hard by soaring global oil prices thanks to Western sanctions on Russia had some comfort after Hunt announced the 5p cut in petrol and diesel duties would continue for a year after it was originally due to end in April.
But Tobacco tax will rise above the rate of inflation, while alcohol duty will keep pace — although Hunt announced new tax relief on beer, cider and wine sold in pubs, still recovering from the COVID-19 pandemic lockdowns.
High-earners got a pensions boost from Hunt, with the annual tax-free allowance on payments into retirement schemes raised from £40,000 to £60,000 — after a nine-year freeze.
The Lifetime Allowance for tax-free pension savings will also lifted from £1.07 million to £1.8 million, a move that will benefit around 1.3 million people, less than four per cent of the economically-active population.
Opposition Labour Party leader Sir Keir Starmer called those moves a tax cut for "the richest one per cent", asking: "How can that possibly be a priority for this government?"
Ordinary Britons "see their tax burden at its highest level for 70 years and they know it's not the government that's lowering inflation," Starmer said.
"Again we see a failure to grip the long-term challenges," he charged. "No determination to create growth that unlocks the potential of the many, working people being made to pay for Tory choices and Tory mistakes."
9 March, 12:10 GMT
Along with the changes to pension tax to incentivise early retirees to return to the workforce, parents of young children will see the 30 hours of state-funded childcare extended to one- and two-year olds, allowing them to get back to work sooner.
Those making a career move into childminding will get £600 "incentive payments", while regulations will be relaxed to increase the maximum number of kids they can look after at once.
And families claiming Universal Credit will receive the child support element of their state benefits immediately, not six weeks after their application, while the cap of £646 per child per month will be raised to £951.