Chancellor Jeremy Hunt today announced his spring budget to the House of Commons, with plans to expand nuclear power and reduce taxes.
In a packed house, Hunt’s delivery of the Spring budget was frequently interrupted by heckles from the opposition and general disruption. He opened by reflecting on the Conservative leadership thus far and citing the OBR’s forecast for UK economic growth. In particular, he homed in on the OBR’s forecast for inflation to drop below the 2 per cent target within the next few months, alongside predictions that “real household income is on track to rise by 0.8 per cent.”
Hunt alluded to the UK’s position in Europe, claiming since 2010 the UK has grown faster than the three largest European economies, Italy, France and Germany. However, critics have pointed out that, when looking at GDP per capita and “how well-off each individual is,” the stats tell a very different story.
Recognising the difficult economic climate early in the budget, Hunt announced plans to support UK households, referring to the £3,400 in economic support given to the average household over the last two years. In terms of his new policies, existing household support will be extended beyond 31 March for another 6 months.
Hunt will maintain the 5p cut on fuel duty and freeze fuel duty for another 12 months, alongside a freeze on alcohol duty until February 2025.
Green Investment
In terms of green industry support, Hunt placed heavy emphasis on nuclear energy as a solution to the UK’s energy woes. The UK has a goal to derive a quarter of its energy from nuclear sources by 2050, and the budget reflected this target. Great British Nuclear will progress its Small Modular Reactor selection process with the deadline for submissions arriving in June this year.
Hunt has also pledged £120mn more to the Green Industries Growth Accelerator, alongside a £270mn commitment to advanced manufacturing, focussing on clean aviation, zero emission vehicles, and space technology. He also alluded to the advancement of a strategy for faster grid connection by January 2025.
Takeaway for small businesses
Hunt championed investment as a key solution for British industry, increasing in the VAT threshold from £85,000 to £90,000, a pledge he believes will help “tens of thousands of small businesses.” Hunt also announced a brand new British ISA which will contribute an additional £5,000 tax free allowance to be invested in British equity.
Tax changes
A slew of tax cuts were announced in Hunt’s budget. Most notably:
- Extension of the windfall tax on oil and gas companies until 2029 which is anticipated to raise £1.5bn.
- Stamp duty relief for people purchasing more than one dwelling has been abolished
- The capital gains tax on residential property has been cut from 28 per cent to 24 per cent
- National insurance will be cut from 6 April by a further 2p.
