6 MARCH 2024 | NEWS
The Government has announced that National Insurance will be cut by a further 2% in its Budget address today. The move represents a significant tax cut, dropping the tax rate from 10% to 8%.
It follows a previous measure to the same effect in the last Autumn Statement. The move is anticipated to save the average taxpayer hundreds of pounds a year.
During his address in the House, Chancellor Jeremy Hunt also received repeated heckles amid a rowdy scene in the Commons today. The Deputy Speaker, Eleanor Laing, was forced to intervene on several occasions.
Mr Hunt also announced several more measures in the Commons today, although almost none of them had not already been flagged recently as likely to be included in the Budget:
- Those on child benefit will need to be earning more than £60,000 per annum, up from £50,000, before their benefits will fully cease;
- The VAT registration threshold for small businesses will rise from £85,000 to £90,000;
- Oil and gas companies will continue to see a ‘windfall tax’ on their profits until 2029, extending the period;
- Capital gains tax for properties marketed at higher rates will fall from 28% to 24%;
- ‘Non-dom’ tax status – which applies to people who earn money in this country, but do not pay tax on it here – will cease to exist in its current form, and wealthy foreign residents will only be able to claim the tax relief for the first four years of their stay in the UK;
- Government spending per department is set to increase by a further 1% every year until 2029;
- As anticipated, there was a further freeze in alcohol duty and the 5p cut in fuel duty is set to remain in place;
- The NHS budget is set to receive a cash injection of £2.5bn next year, with a further £3.4bn anticipated by 2030 – there was a major focus on streamlining services through improving IT efficiency;
- There will be a new British ISA to encourage further investment in UK assets, although it is understood from Westminster sources that the way this will be used remains unclear as yet;
- Vaping products will also be subject to additional levies, designed to deter a nicotine addiction in non-smokers, while still maintaining them as an alternative for existing smokers;
- The Household Support Fund will be extended for a further six months.
The Chancellor also reported to the House that the UK economy was forecast to grow by 0.8% this year, rising to 1.9% next year. He added that the country’s inflation rate was currently set to fall below 2% by June, dropping further to 1.5% next year.
Public debt as a share of GDP – excluding Bank of England debt – is set to amount to 91.7% this year, rising to 92.8% next year, according to the Office for Budget Responsibility.
Responding, Opposition leader Sir Keir Starmer said the Budget would only represent “a vicious downward spiral”, adding that “it will only get worse” if the Conservatives remain in power for a further five years after the next General Election, which is anticipated to be due this year.
Sir Keir also called upon the Government to announce a General Election to be held at the same time as this year’s upcoming local and mayoral elections – due to be held on 2 May – but the Government is showing no signs of responding to this.
He went on to admonish the Government, saying that “it could have been a moment of contrition, an apology for the chaos they have inflicted”, adding that some people’s current financial difficulties are due to “a Rishi recession”, and that “working people” are being asked to “pay more and more for less and less”. He added that this Budget was “a last desperate act” by the incumbent Tory administration.
Liberal Democrat leader Sir Ed Davey also voiced disapproval, saying that the newly announced measures would not “touch the sides” for hard-pressed households, and adding: “this is really bad news for people”.
This Budget is set to be the last delivered by the Government after its 14 years in power, if polling among the electorate is accurate. It is also understood in Westminster to be likely that several of its measures, if not all, would be adopted by an incoming Labour government or a coalition.
The Budget Statement will continue to be debated in both Houses of Parliament over the coming days.
