15 MARCH 2023 | NEWS
Chancellor Jeremy Hunt has said the UK will “avoid a technical recession in 2023” and the British economy is “proving the doubters wrong”, as he delivered his first Budget speech.
Defence, energy bills, beer, fuel and inflation: here are the key announcements from the Chancellor’;s’s March 2023 Budget.
Energy Price Guarantee will stay at current level
The Chancellor has confirmed the Energy Price Guarantee will remain at £2,500 for the typical household for the next three months. He says this will save the average family a further £160, on top of support measures already announced.
Free childcare of 30 hours a week
Parents – working 16 hours a week – of children aged nine months to five years will get 15 hours’ free childcare to encourage caregivers to enter the workforce.
This will be staggered from April 2024 to ensure enough places. Children up to two years old will get 15 hours free from April 2024. Children from nine months up will benefit from September 2024, and from September 2025, every single working parent of a child under five will have access to 30 hours of free childcare per week.
Hunt promises cash for leisure centres
Hunt talked about the “risk to swimming pools” and other community facilities of rising costs, to much uproar in the Commons as MPs make their feelings known. The chancellor went on to lay out a £63m fund to “keep our public leisure centres afloat”.
Fuel duty to remain frozen and 5p cut will stay
Fuel duty will be frozen and a 5p reduction will be maintained for a further year, at a cost of £6bn.
Duty on a pint ‘frozen’
“British ale may be warm, but the duty on a pint is frozen,” the Chancellor quipped as he announced that from 1 August, the duty on draught products in pubs would be up to 11p lower than the duty in supermarkets: “A differential we will maintain as part of a new Brexit pubs guarantee.”
Economy forecast to grow by 1.8% next year
Looking ahead to the forecasts for economic growth, the Chancellor said: “After this year, the UK economy will grow in every single year of the forecast period: by 1.8% in 2024; 2.5% in 2025; 2.1% in 2026; and 1.9% in 2027.”
£11bn to be added to Defence budget in total
Following some “persuasive” arguments from the Defence Secretary, Ben Wallace, Jeremy Hunt confirmed that the government would add a total of £11bn to the UK’s Defence budget over the next five years and that it would be nearly 2.25% of GDP by 2025.
“We were the first large European country to commit to 2% of GDP for defence and will raise that to 2.5% as soon as fiscal and economic circumstances allow,” he said.
This is not only what Mr Wallace requested, but more than double what was expected.
Corporation tax to increase to 25%
The main rate of corporation tax, paid by businesses on taxable profits over £250,000, has been confirmed to increase from 19% to 25%, as was anticipated.
Companies will be able to deduct investment in new machinery and technology to lower their taxable profits.
There will be tax breaks and other benefits for 12 new Investment Zones across the UK, funded by £80m each over the next five years.
Pensions lifetime allowance to be abolished
The Chancellor said he would increase the pensions annual tax-free allowance from £40,000 to £60,000 and would abolish the Lifetime Allowance – previously set at £1.07m.
