Five takeaways from Jeremy Hunt's Spring Budget

The government made what is likely to be its final major attempt to woo disillusioned voters before the general election, with the much-anticipated Spring Budget today.

Chancellor Jeremy Hunt began his day with a 17-mile run, according to The Sun's political editor Harry Cole, before presenting his budget to an electorate grappling with a technical recession, stagnant growth and a gloomy economic outlook. 

Here are five key takeaways from his spending and taxation plans. 

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1. 2p cut to National Insurance rate 

Hunt confirmed The Times's report of a 2p cut to the rate of National Insurance (NI).

Employee NI will be cut from 10% to 8% in April, and self-employed NI contributions from 8% to 6%. Hunt claimed it would bring the average personal tax bill down to its lowest level since 1975. Combined with the 2p cut announced in last year's Autumn Statement, 27 million workers will save an average of £900 a year, he said, and two million self-employed people will save £650. 

However, Hunt ruled out cutting the basic rate of income tax, which Rishi Sunak (as chancellor) promised would happen in 2024. 

It must be weighed against the context of the highest tax burden since the Second World War and the Conservatives' decision to freeze tax thresholds in 2021, rather than raising them in line with prices, which drags more people into the higher-rate tax bracket. 

The UK's forecaster, the Office for Budget Responsibility (OBR), estimates that almost four million more people will be paying income tax and three million will move into the higher bracket by 2029.

2.  OBR forecasts 0.8% growth 

The OBR forecasts 0.8% growth this year, and 1.9% next year – higher than previously expected, noted The Guardian, but still a "weak growth outlook by long-term standards".

Growth over the whole of 2023 was estimated at 0.1%; the weakest year since the 2009 financial crisis (excluding 2020 and the outbreak of the Covid-19 pandemic), despite Rishi Sunak promising to "grow the economy".

3. Alcohol and fuel duty frozen

After freezing alcohol duty for six months in his Autumn Statement, the chancellor has extended the freeze until February 2025, "cutting costs for breweries, distilleries, restaurants, nightclubs, pubs and bars", according to the Treasury.

Hunt also announced a freeze on fuel duty amid rising petrol prices – due to concerns about the Middle East and global shipping – extending the 5p cut made in 2022 for a third year. 

"There is a fiscal sleight of hand at play," said The Times. The freeze is a temporary policy – meaning the chancellor only has to account for the £5 billion cost this financial year. But Conservatives have frozen fuel duty in each of the past 14 years, "making the policy look pretty permanent".

Taken together, Hunt expects the two freezes will reduce headline inflation by 0.2 percentage points this year. 

The OBR forecasts that inflation will be below the 2% Bank of England target in "just a few months' time", which should allow cuts in interest rates, said Hunt.

4.  Increase in high-income threshold for child benefit

Hunt said he would increase the higher-income threshold at which parents start paying the high-income child benefit charge, from £50,000 to £60,000. 

Almost 500,000 families would gain an average of about £1,260 per household, the Treasury said.

As of April 2026, the threshold will be assessed on a household basis rather than the current individual basis.

5. Borrowing will fall to just 1.2% of GDP 

The chancellor announced that borrowing would fall over the next five years to just 1.2% of GDP. 

"Take this with a pinch of salt," said Paul Johnson, director of the Institute for Fiscal Studies, on X. This will "depend on implementing extremely tight spending plans which will imply cuts for many public services".

Hunt said the government would maintain the plan to increase public spending by 1% in real terms, as set out in the autumn statement, rather than cutting it by 0.75%, as expected.