We are closing this blog now but you can read all our UK politics coverage here.
Afternoon summary
Rishi Sunak has refused to say how the Conservatives might fund their long-term proposal to abolish national insurance contributions for employees. (See 3.02pm.) Keir Starmer says this amounts to a commitment to a £46bn unfunded tax cut and that in floating the idea Sunak is repeating the same error made by Liz Truss in her mini-budget. (See 11.34am.)
Royal College of GPs says funding for GP surgeries in England for year ahead 'derisory'
Family doctors’ leaders have criticised ministers for giving GP surgeries in England a “derisory” increase in their funding, despite surgeries seeing record numbers of patients.
The Royal College of GPs (RCGP) has warned that the 1.9% rise in the budget for general practice for 2024/25 will leave hard-pressed GPs struggling to provide the care that patients expect.
In a sharply-worded letter to Victoria Atkins, the health and social care secretary, Prof Kamila Hawthorne, the RCGP’s chair, claims that GP services are being “allowed to crumble”.
In her letter she protested that the 1.9% rise “amounts to a real terms funding cut when compared to CPI inflation, which will make it even harder for GPs to deliver the care our patients need at a time when general practice is already in crisis”. She added:
This derisory funding plan for general practice will have real-life consequences for the profession, the service we provide and, most importantly, for our patients.
Hawthorne claimed that the settlement “is sadly part of an ongoing trend of neglecting primary care” and that “the service as a whole remains starved of funding” by ministers and NHS England.
GPs are busier than ever, saw 7% more patients in December than in December 2019 and have delivered on the government’s 2019 pledge to increase the number of appointments by 50m a year – even though the number of fully-qualified family doctors has fallen, she added.
While the amount of money going into GP care is rising, the proportion of the overall NHS budget it receives fell to 8.4% this year – the smallest share for eight years, Hawthorne said.
GP services were given £9.182bn for this financial year but under their new contract will get £9.356bn in the new one starting next month, just £178m (1.9%) more, the RCGP said.
However, Dr Amanda Doyle, NHS England’s national director for primary care and community services, told all GP practices in England in a recent letter that GPs would receive much more next year – £11.864bn overall, an increase of £259m.
The RCGP say the discrepancy between the figures is because NHS England includes in the headline total figure they cite certain payments that it regards as outwith the central GP contract.
In January the Liberal Democrats published an analysis showing that GP funding has fallen by £350m a year in real terms since 2019.
Responding to Hawthorne’s letter, a Department of Health and Social Care spokesperson did not respond directly to her complaint about underfunding. But they said:
GPs and their teams are at the heart of our communities, and we hugely value their vital work.
This contract will reduce unnecessary and burdensome bureaucracy so they can spend more valuable time with their patients, while also giving them greater autonomy to run local practices.
IMF says tax rises likely to be needed in Britain in future
Stabilising the UK’s debt is likely to require additional tax rises, the International Monetary Fund (IMF) has said.
As PA Media reports, speaking at the IMF’s regular press briefing on Thursday, director of communications Julie Kozak told reporters:
IMF staff will be analysing the announced policies in greater detail but the aim to continue the fiscal consolidation pursued since 2022 to reduce inflation and stabilise debt is welcome.
Kozak said that the national insurance cut and reform of the child benefit system had been funded by “well-conceived revenue-raising measures”. She added:
Significant spending to protect service delivery, growth-enhancing investment and the appropriate commitment to stabilise debt are likely to require additional revenue-raising measures in the medium term.
Cameron says in Berlin there's 'incredible unity between allies' when asked about German leak about British troops
David Cameron said there was “incredible unity between allies” when asked about a leaked call between German military officials about Ukraine which included details of UK operations, PA Media reports. PA says:
The foreign secretary’s visit to Berlin today came just days after Russia intercepted a telephone conversation in which officials were heard suggesting British service personnel were on the ground in Ukraine.
He was asked at a press conference alongside his German counterpart Annalena Baerbock whether he agreed with Berlin’s assessment that trust among allies was unbroken.
Cameron said: “I don’t want to play into the hands of some Russian narrative about divisions between allies. What I see … is incredible unity between allies, incredible unity in Nato.
“Of course, we’re going to have areas where we want to discuss what more we can do, what more we can help. And those are the sorts of discussions that good friends and allies with this unity have in private.”
His visit also came as German Chancellor Olaf Scholz faced continued pressure from Western allies and politicians in Berlin to supply Ukraine with long-range Taurus missiles.
Scholz has been unwilling to send the Taurus cruise missiles to Kyiv on the grounds that German soldiers would have to be sent to Ukraine to help operate them, dragging Germany into war with Russia.
Asked whether the UK is pushing Berlin to send its Taurus missiles, Lord Cameron said “it was a matter for the German government to decide” and that he could “only speak for Britain’s experience of how effective these weapons have been at helping Ukraine to fight off this illegal aggression”.
Peace will be achieved “through strength,” he said.
“You get peace by demonstrating that Putin cannot win, you get peace by helping the Ukrainians deliver what they need on the battlefield.”
He also downplayed concerns about a possible escalation of the conflict.
“At every stage it’s been said ‘if you give anti-tank weapons to the Ukraine, that’s escalation’. No, it wasn’t.
“‘If you give tanks to the Ukrainians, that’s escalation’. No, it wasn’t. ‘If you give long-range artillery or long-range fires to the Ukrainians, it’s escalation’. No, it isn’t.
“I think the reason for that is clear. If what you’re doing is helping a country defend itself from illegal and completely unjustified aggression, then there should be nothing to stop you helping that country to fight back to recover its territory.
“As long as we’re not in a situation where a Nato soldier is killing a Russian soldier, we are not causing escalation. We’re allowing Ukraine to defend itself.”
Updated
The government has said that Michelle Donelan, the science secretary, received official legal advice about the message she posted on X that led to her department paying damages to an academic. This point has been made to explain why it has been decided she should not have to personally pay the £15,000 being paid out in damages. (See 1.22pm.)
Emilio Casalicchio from Politico says he has been told that the advice was that it would be safe for Donelan to make the allegations she did.
I'm told legal officials concluded she was on safe legal ground https://t.co/qGvvSIg2j1
— Emilio Casalicchio (@e_casalicchio) March 7, 2024
If so, the advice was clearly flawed, because Donelan has now retracted what she said.
Labour says Channel crossing figures undermine Sunak's claim about that plan to stop small boats is working
In 2023 the number of people crossing the Channel in small boats was down by more than a third on the previous year. But the number who have arrived so far this year is higher than it was at the same point last year, Labour says.
In a news release, Labour says:
225 individuals were confirmed to have crossed the Channel on Wednesday 6 March on five boats, taking the total for the year so far up to 3,208.
That exceeds the 3,150 that had arrived by the same point last year, and is almost 45% more than the 2,212 that had arrived by 6 March 2022, which went on to become the record year for small boat arrivals …
The number of individuals rescued in the Channel by the French authorities and returned to the French coast is also at a record high for this point of the year. Up to 6 March, at least 868 migrants had been rescued in French waters, compared to 490 over the same period in 2023 and 463 in 2022.
That means the total number of people who have tried to cross the Channel so far this year is over 4,075, way in excess of the numbers in any previous year.
Stephen Kinnock, the shadow immigration minister, said these figures undermined Rishi Sunak’s claim that his plan to stop small boats is working. Kinnock said:
In January, Rishi Sunak and James Cleverly told us that small boat arrivals were down by a third, they said their plan was working, and they insisted that the reduction in crossings last year was nothing to do with the weather.
All those claims now look utterly ridiculous, and even worse, their complacency has left our country dangerously exposed and ill-prepared for what continues to be a record start to the year for small boat crossings.
Updated
John Crace has devoted his sketch today to Jeremy Hunt’s post-budget morning media round. You can read it here.
Donations to UK political parties nearly doubled to £93m in 2023
Political parties accepted £93m in donations last year, boosted by new Conservative and Labour mega-donors, with the 2024 election on course to be the highest-spending contest ever, Rowena Mason and Aletha Adu report.
Sunak refuses to say how government might fund long-term proposal to abolish national insurance
Rishi Sunak has declined to say how his long-term plan to abolish employees’ national insurance might be funded. In an interview for broadcasters, asked about this, he said:
I think what people can see from me, I think they trust me on these things, is that I will always do this responsibly.
We funded our current tax cuts responsibly, borrowing hasn’t increased, we are still on track to meet our fiscal rules that have our debt falling.
At the No 10 lobby briefing the PM’s spokesperson also declined to say how the government might fund this proposal. And he refused to say whether the government was considering forgoing the entire £46bn it gets from national insurance, or whether it was considering getting rid of national insurance by merging it with income tax, which might result in income tax having to rise.
In an interview this morning Jeremy Hunt, the chancellor, said one option would be to merge income tax and national insurance.
Updated
Sunak would be 'absolutely nuts' to hold general election in May, says George Osborne
Rishi Sunak would be “absolutely nuts” to call a general election in May, the former Tory chancellor George Osborne has said.
Speaking on his Political Currency podcast, which he co-hosts with Ed Balls, Osborne said that No 10 has thought about having a May election.
A lot of Tory MP were in favour of the idea “because they think things will only get worse”, he said.
But Osborne said he personally thought going early would be a mistake.
The centre has thought about a May election but I think it would be absolutely nuts. They are 26 points behind in the opinion polls. You do not call a general election when you’re 26 points behind and you still have nine months left of your mandate to run.
If I was Sunak, I wouldn’t be ruling out an election in January 2025. You want to give yourself maximum room for manoeuvre.
Energy minister Andrew Bowie won't have to resign despite criticising windfall tax extension, No 10 confirms
Andrew Bowie, the energy minister, is not being sacked despite posting a message on X yesterday saying the extension of the windfall tax on energy companies was “deeply disturbing”.
In normal circumstances a minister who criticised government policy in public in this way would be expected to resign. But, at the No 10 lobby briefing, the PM’s spokesperson said that Rishi Sunak retained confidence in Bowie.
The spokesperson said:
[Bowie has] obviously has since clarified his position, he’s spoken to the chancellor about his views and he’s been clear that he supports the budget.
The spokesperson was referring to this post on X put out by Bowie last night.
I've spoken to the Chancellor. He understands the importance of the EPL issue in the North East.
— Andrew Bowie MP (@AndrewBowie_MP) March 6, 2024
The fact is only the Conservatives support our Oil and Gas sector. Thats why, for example, we are alone in retaining the capital gains allowances. So now we need get on and deliver.
I’ve spoken to the Chancellor. He understands the importance of the EPL [energy profits levy] issue in the North East.
The fact is only the Conservatives support our Oil and Gas sector. Thats why, for example, we are alone in retaining the capital gains allowances. So now we need get on and deliver.
Bowie seems to have been allowed some leeway to speak out because he is MP for West Aberdeenshire and Kincardine in the north-east of Scotland, where there are strong concerns that an extension of the windfall tax might jeopardise jobs in the oil and gas industries. Douglas Ross, the Scottish Conservative leader, has said that he will not vote for this policy when the Commons has to approve the budget.
Labour has said Bowie should have to resign over this.
Updated
Labour's Anas Sarwar criticises SNP's health record during FMQs at Holyrood
The Scottish National party government in Edinburgh is under further attack by its critics who accuse ministers of passing performative acts of parliament which they then fail to properly pay for, this time over NHS waiting lists.
Last month the housing charity Shelter Scotland accused Humza Yousaf, the first minister, of “gaslighting” voters by introducing progressive-seeming legal rights to housing but then cutting the funding councils needed to deliver them. Scottish homelessness rates hit record levels last year, despite a legal guarantee to housing.
At first minister’s questions earlier today Anas Sarwar, the Scottish Labour leader, said that under another Scottish law, this time the Patient Rights (Treatment Time Guarantee) (Scotland) Regulations 2012, Yousaf and his colleagues had technically broken that law 680,000 times because 680,000 patients had not had treatment within the 12-week target specified.
Listing every recent health secretary, Sarwar said:
Humza Yousaf might try and blame the pandemic, but this law was broken over 320,000 times before covid.
Shona Robison broke the law 158,000 times.
Michael Matheson broke the law 184,000 times.
And Humza Yousaf broke the law 235,000 times.
And since he published his so-called NHS recovery plan, the SNP have broken the law 306,735 times.
Yousaf protested that the pandemic had hit every health service, and repeated his apology to any patient who was not seen or treated in time.
But this theme will reoccur in the run-up to the general election: the SNP’s opponents plan to make the contest in Scotland in large part a referendum on the SNP’s record in government, even though it is not actually up for re-election.
Sunak defends taxpayer funding Michelle Donelan's libel settlement, on grounds dispute related to her doing her job
Rishi Sunak had defended the use of taxpayers’ money to make a payment of £15,000 for damages to an academic libelled by Michelle Donelan, the science secretary.
The prime minister claimed that it was right for the government to cover the cost to the damages because the legal dispute arose as a result of Donelan doing her job.
But Keir Starmer has described this as “totally insulting”, and insisted that as prime minister he would never authorise a payment of this kind.
In October last year Donelan suggested that Prof Kate Sang, of Heriot-Watt university in Edinburgh was a support of Hamas. She made the suggestion in a letter to UK Research and Innovation (UKRI), posted on X, saying it should cut links with Sang. On Tuesday Donelan retracted her suggestion, and it was subsequently revealed that her department has paid £15,000 in damages.
Asked to explain why the taxpayer should pay for the minister’s mistake, Sunak told broadcasters today:
Obviously you will understand I’ve been focused on the Budget, but my understanding of this is that Michelle raised some concerns about some articles that had been shared talking about what happened on October 7.
I think subsequently to that, those thoughts I think have been clarified and Michelle has withdrawn those concerns.
With regard to the settlement, it is a long-standing convention stretching back many years, over different governments of all different parties, including Labour, that the government will fund those legal disputes when it relates to government ministers doing their work.
But Starmer said that getting the taxpayer to pay for a libel committed by a minister should not be allowed. In a separate clip for broadcasters, he said:
I think most people watching this will be aghast.
The government is telling them every day that they can’t do any more to help them. People are really struggling to pay their bills, and the government says ‘We can’t afford to help you anymore’. People know that public services are crumbling.
And then you’ve got a minister who says something she shouldn’t have said, then has to pick up a legal action and pay damages and costs, and then says ‘The taxpayer is going to pay for that’.
Totally insulting. We need a change.
I’ll tell you something else – if we’re privileged enough to come into power and have a Labour government, we will never allow that sort of thing to happen. That will be history.
During business questions in the Commons, Penny Mordaunt, the leader of the house, defended Donelan on the grounds that she did not take a severance payment after she resigned as eductation secretary in 2022, even though she was entitled to one. Mordaunt said:
When [Donelan] was entitled to redundancy payments from being a secretary of state, which was £16,000, she did not take that and handed it back to the department, because it was the right thing to do. I would just remind people of that and I think that speaks volumes about her character and how much she values the fact that it is taxpayers’ money that we are talking about.
Mordaunt did not remind MPs that Donelan only spent about 36 hours as education secretary. She was appointed by Boris Johnson, as his government was falling apart, but quickly decided she did not want to serve under him.
Government sources have suggested that one reason why the department felt obliged to fund the settlement is that Donelan received official legal advice about her letter, and her tweet, before it was published.
Updated
Sunak declines to restate claim that his working assumption is general election to be held in second half of 2024
In an interview with Sky News last night Jeremy Hunt, the chancellor, played down the prospects of the election being held in May. Asked if the budget was “the last throw of the dice” before the election, he replied: “Absolutely not.” Asked if the government was still planning for an autumn election, he said that was still “the working assumption” (which is what Rishi Sunak himself said in January), but he stressed that the timing of the election was a matter for the PM.
Sunak himself was interviewed by Jeremy Vine on Radio 2 within the last hour, and, when asked about the timing of the election, he chose not to repeat the line about autumn being the “working assumption”.
When Vine put it to him that there are reports saying he is considering an election in May, Sunak laughed, and said he would not be saying anything about that.
Asked if he still favoured holding it in the second half of the year, Sunak just said that what mattered was the choice facing voters.
Hunt's proposal to abolish national insurance 'not worth paper its written on', IFS suggests
The Institute for Fiscal Studies always finds at least some aspects of a budget to criticise, but its verdict on yesterday’s is a lot more withering than usual. Here are the main points from the summary of its position from Paul Johnson, the IFS’s director. Johnson delivered this at a news conference this morning.
Johnson suggested the proposal to abolish national insurance from Jeremy Hunt was “not worth the paper its written on”. He explained:
Talk of abolishing national insurance does not look realistic. Of course, the chancellor is only talking about the part paid by employees (and the self-employed) not the much bigger part paid by employers. But this pledge to cut taxes by more than £40bn goes in the same bucket as pledges to increase defence spending – not worth the paper its written on unless accompanied by some sense of how it will be afforded.
He said taxes were likely to remain high as a proportion of national income for decades to come. He said:
I’ve said it before, and I’ll say it again. Tax has risen to a higher fraction of national income than it has ever been in my lifetime, and I don’t expect it to return to its previous level for the rest of my lifetime.
Johnson is 57.
This chart from the OBR’s report yesterday shows how tax as a proportion of GDP has risen during Johnson’s lifetime.
He said the debt problem facing the next government will be worse than for any other government since the end of the second world war. He said:
The combination of high debt interest payments and low forecast nominal growth means that the next parliament could well prove to be the most difficult of any in 80 years for a chancellor wanting to bring debt down. Even stabilising debt as a fraction of national income is likely to mean some eye wateringly tough choices – and we are talking tens of billions of pounds worth of tough choices – on tax and spending.
He said the budget showed the government is not genuinely committed to raising defence spending. He said:
Remarkably [Jeremy] Hunt stuck with the claim that he wants defence spending to rise to 2.5% of national income “as soon as economic conditional allow”. Well, economic conditions allowed a £10 billion cut in NICs this year. So they could have allowed a £10 billion increase in defence spending instead. That would have just about met the target. Actions speak louder than words.
He said Hunt had only been able to present a budget in line with his fiscal rules by making “unlikely” or “undesirable” assumptions about spending. He said:
On his figures, debt is rising slowly to 2027-28 before falling by a minuscule amount as a share of national income in the following year. But that requires him to assume a whole series of unlikely, or undesirable things.
Perhaps unlikeliest of all is that the supposedly temporary one-year 5p cut on fuel duty originally put in place in April 2022 will expire in a year’s time, and that rates of fuel duties will then rise in line with inflation, despite freezing them yesterday for the 15th year in a row. Perhaps least desirable is that investment spending will fall by £18bn a year in real terms. Somewhere between the two lies the effective promise that day-to-day spending on a range of public services outside of health, defence and education, will fall by something like £20bn. Maybe that is possible, but keeping to these plans would require some staggeringly hard choices which the government has not been willing to lay out. Indeed, we heard yesterday that the next spending review, in which these choices will have to be announced, will rather conveniently not happen until after the election.
One only has to look at the scale of NHS waiting lists, the number of local authorities at or near bankruptcy, the backlogs in the justice system, the long-term cuts to university funding, the struggles of the social care system, to wonder where these cuts will really, credibly come from.
He said the Conservatives and Labour were both refusing to accept how severe the spending cuts planned for after the election are. He said:
If I am sceptical about Mr Hunt’s ability to stick to his current spending plans, I am at least that sceptical that Rachel Reeves will preside over deep cuts in public service spending …
Government and opposition are joining in a conspiracy of silence in not acknowledging the scale of the choices and trade-offs that will face us after the election. They, and we, could be in for a rude awakening when those choices become unavoidable.
He said higher rate tax payers could gain up to £1,500, and people on average earnings up to £1,000 a year, from the reductions in national insurance in the budget and last year’s autumn statement.
He said pensioners would be “substantial net losers” from the budget. Confirming an assessment made by the Resolution Foundation (see 10.24am), Johnson said:
While many workers will be better off as a result of tax changes over this parliament, pensioners will be substantial net losers. Well over 60 per cent of pensioners now pay income tax. Income tax changes will leave most of them £650 a year worse off by 2027, and over £3,000 a year worse off if they are higher rate tax payers.
He said “average household incomes this autumn are likely to be lower than they were in autumn 2019”.
Richard Partington has more on the IFS’s analysis here.
Electoral Commission records show Hunt has now donated £123,000 to Tory association in his constituency
Jeremy Hunt has donated more money to his constituency Conservative party in the last four months to boost his chances of re-election, according to fresh official records.
The chancellor donated an extra £18,084 last November, Electoral Commission records show, pushing the total number of cash he has spent since the last general election, to £123,345.
Earlier this week the Guardian revealed he had given £105,261 to the south west Surrey Conservative association over the last five years, from the last general election held in December 2019 until June 2023.
The most recent accounts for Hunt’s local association have warned that its “balance sheet is at a less than satisfactory level”. A note stated that members’ annual subscriptions were due to increase this year.
Hunt’s Godalming and Ash seat is a key target for the Liberal Democrats.
Polling by Savanta shows the Lib dems are on course to take the “blue wall” constituency, which would make Hunt the first chancellor in modern times to lose his seat in the Commons.
Over the last week, Hunt has repeatedly insisted he hopes he will “carry on serving” his voters, and noted: “I hope to be the chancellor after the election”.
When asked whether he spent £105k from February 2021 to June 2023 over fears of losing his seat, Hunt told Sky News yesterday:
I put that money in mainly because during the pandemic it was not possible to do fundraising in the normal way. I’ve got a brilliant team in my constituency and we do some fantastic local campaigning and I wanted that to continue despite the fact that we couldn’t fundraise. But have I (got) a tough fight against the Lib Dems? Absolutely. And I’ve never taken that for granted.
Starmer says Hunt repeating Liz Truss's budget error with £46bn unfunded tax cut proposal
Keir Starmer has accused Jeremy Hunt of repeating the budget mistakes made by Liz Truss during her disastrous premiership.
In comments on the budget during a visit to a building site this morning, Starmer focused on Hunt’s proposal to abolish employees’ national insurance over time, saying that this was a bigger unfunded tax promise than those in Truss’s mini-budget. (See 9.28am.)
He also said that it was “humiliating” for Hunt to have to announce the abolition of non-dom status, a longstanding Labour proposal that Starmer wanted to use to fund some of his policies, including more investment in the NHS.
Starmer said:
How humiliating was that for the government yesterday?
We’ve argued for years that they should get rid of the non-dom tax status, they’ve resisted that. And now, completely out of ideas, the only decent policy they’ve got is the one that they’ve lifted from us.
Obviously we will keep our commitment to the NHS, so important it is. We’ll go through all of the numbers and we’ll be absolutely clear nothing in our manifesto will be unfunded and uncosted. That is an iron rule for the Labour party.
Contrast that with the government, where, yesterday, at the end of the budget, the chancellor made a staggering £46bn unfunded commitment to abolish national insurance.
That’s bigger than Liz Truss’s commitment, so they’ve learned absolutely nothing.
The Labour claim overlooks the fact that Truss’s unfunded tax cuts triggered financial panic because they were specific measures which would have been implemented if they had not been swiftly reversed. Hunt was also talking about a massive tax cut, without saying how it might be funded, but he made it clear that this was just a long-term aspiration, and not something that at present has any impact on government finances.
IFS says Hunt's budget has not done anything to significantly address multiple economic problems facing UK
Amol Rajan may have been understating the problems facing Britain in his question to Jeremy Hunt this morning (see 10.33am), if the Institute for Fiscal Studies’s assessment is anything to go by.
This is how Paul Johnson, the IFS director, opened his speech at the IFS presentation where its experts have been explaining the significance of what was announced yesterday.
Nothing that Jeremy Hunt did yesterday, nor anything the OBR said, changes anything very significantly. Which is a shame. Because that means we are still:
-heading for a parliament in which people will on average be worse off at the end than at the start,
-looking at a debt to GDP ratio that is at its highest level in 70 years and is showing no signs of falling;
-facing debt interest payments at close to all time highs;
-seeing worrying increases in the number of individuals moving onto health and disability related benefits, bringing huge challenges for those households and rising costs for the public purse;
-(despite the genuinely significant cuts in NICs) stuck with a situation where tax revenues will have risen by a record amount as a share of national income over this parliament and still heading towards UK record levels;
-implicitly planning on big cuts in public investment spending overall and cuts to many areas of day-to-day spending on public services despite very obvious signs of strain in many areas.
All of that was true on Tuesday, and all of it remains true today. In all likelihood it will still be true come the general election.
I will post more from the IFS assessment shortly.
More in Common UK, a group campaigning to reduce political divisions, which carries out a great deal of public opinion research, conducted a focus group last night on the budget. It was in Whitby, with women who voted Conservative in 2019 and who are now undecided. Luke Tryl, the More in Common director, has written up the findings in a thread on X starting here.
🚨 We spent tonight talking to a group of conservative to undecided female voters in Whitby about what they had taken from the budget. On the headline NI cut “a drop of nothing” summed up their mood.
— Luke Tryl (@LukeTryl) March 6, 2024
We spent tonight talking to a group of conservative to undecided female voters in Whitby about what they had taken from the budget. On the headline NI cut “a drop of nothing” summed up their mood.
Tryl says pensioners were not happy with the budget.
The pensioners in the group wondered why there was nothing for them. While there was a general feeling that those who worked and didn’t qualify for benefits but also weren’t middle class weren’t getting the support they deserved.
Alex Wickham from Bloomberg says this could become a problem for Jeremy Hunt and Rishi Sunak, especially if the Tory papers start to focus on the Resolution Foundation analysis. (See 8.24am.)
This could become a key political problem with the budget today especially for Tory-leaning newspapers
— Alex Wickham (@alexwickham) March 7, 2024
Pensioners lose out most — those aged 66 plus will be £770 poorer, say @resfoundation
Story via @PhilAldrick >>https://t.co/VldmrU3V1C
Hunt accuses Today presenter of being 'not worthy of BBC' after he suggests budget not enough to revive 'stagnant' economy
Jeremy Hunt has accused a Today presenter of being “not worthy of the BBC” after he suggested the budget did not do enough to revive Britain’s “stagnant” economy.
Towards the end of what was otherwise a relatively good-tempered interview, Amol Rajan said:
This might be, and you’ll say you don’t want it to be, one of your last big acts in politics. Do you really think you’ve read the moment?
This is a country ravaged by economic shocks, at best drifting, at worse, stagnant. We all know about its potential, but we’ve had seven quarters of falling GDP per head, that’s been revised downwards.
We’re hooked on foreign labour, the birth rate is collapsing. Many public services are creaking, councils are going bust.
Those are facts, has your budget really come even close to meeting the scale of the challenges this country faces?
In response, Hunt said:
I think the overall characterisation that you’ve just given of the British economy is unworthy of the BBC.
Rajan insisted that there was “no such thing as ‘the BBC’”, because so many different people worked there, and he said he was “just putting to you facts about this country”. But Hunt replied: “It’s unworthy of you Amol.”
“Has your Budget come close to meeting the scale of the challenges this country faces?”@AmolRajan lists a stagnant economy, creaking public services and a reliance on foreign labour.
— BBC Radio 4 Today (@BBCr4today) March 7, 2024
Jeremy Hunt says he ‘believes it has’ and calls the characterisation ‘unworthy of the BBC’.
Updated
8m pensioners who pay income tax will lose £1,000 each on average from threshold freeze, Resolution Foundation says
The Resolution Foundation has described pensioners as the the biggest losers from the budget.
In its analysis, it says:
Looking beyond just employees, though, personal taxes are still going up significantly, with threshold freezes exceeding value of NI rate cuts by £20bn (£41bn versus £21bn). What’s going on? £8bn is being raised by the freezes to thresholds for employer NI, which in time should feed through into lower pay levels for employees. And there is a big group of losers: pensioners, who are already exempt from NI but affected by freezes to income tax thresholds. All 8 million taxpaying pensioners will see their taxes increase, by an average of £1,000 – an £8bn collective hit. This approach is justified with tax cuts focused on working-age employees and the self-employed, who currently pay higher rates of tax than pensioners or landlords, but it is a staggering turnaround from the approach of Conservative governments since 2010, who have generally focused support on pensioners.
Commenting on the figures, Sarah Olney, the Lib Dem Treasury spokesperson, said:
This Conservative government has shown their true colours, pensioners are not their priority. They would rather cut taxes for the big banks than look after those who have given so much for so long to our society.
But Jeremy Hunt rejected this claim. He told Sky News:
We’ve done an enormous amount for pensioners. This government introduced the triple lock … we have really prioritised pensioners.
Updated
Prompted by this story, a reader asks:
Can Hunt, or anyone, actually pay more tax than is due?
Yes. If you think you should pay more tax, there is nothing to stop you sending a cheque to the Treasury. Stanley Baldwin famously did this in 1919, donating a fifth of his wealth, the equivalent of £5m today, as a contribution to paying off. He wrote an anonymous letter to the Times urging other wealthy people to do the same. Later he was named as the author of the letter, and he subsequently served three terms as prime minister.
I am not aware of any modern precedent, although when Gordon Brown was chancellor, and a pensioner angrily sent him a cheque for 75p after the state pension was increased by just 75p a week, Brown ensured that the cheque was cashed and that the 75p went into the Treasury’s coffers.
UPDATE: A reader (Stan) points out that there is a page on the government’s website explaining how you can make voluntary donations to the Treasury. In 2017 the FT reported that the government had received 200 gifts throught this system since 2000.
Updated
UK to have first parliament in modern history with fall in living standards, says Resolution Foundation
Household incomes are on course to fall for the first time over the course of a parliament despite Jeremy Hunt’s national insurance cuts, the Resolution Foundation thinktank has said in its assessment of the budget. Phillip Inman has the story.
Hunt admits Tories would not be able to abolish national insurance 'any time soon'
Jeremy Hunt has conceded that the Conservative will not be able to abolish employees’ national insurance, as he has said he would like to do (see 9.28am), any time soon,
Asked when this might happen, he told Times Radio:
That’s a huge job. [National insurance] raises an enormous amount of money. And I don’t think it’s realistic to say that’s going to happen any time soon. But I do want to end the unfairness of a system where the income you get from work is taxed twice through income tax and national insurance.
Hunt's national insurance giveway 'funded by fiscal fiction spending cuts', says Resolution Foundation
The Resolution Foundation thinktank has published its assessment of the budget. At a news conference, James Smith, the RF’s research director, said Jeremy Hunt’s £20bn national insurance giveaway was funded by planned cuts to public spending that were so implausible they amounted to “fiscal fiction”. He said:
The government are pencilling overall day-to-day spending numbers beyond the end of the spending review, from 2025-26 onwards.
And if you take out what the government has said it will guarantee in terms of health, defence, education, then you end up with those unprotected departments … with really, really big cuts. So this is something like three-quarters of the intensity of the cuts that we got from 2010 and it’s getting on for £20bn. So you can think of tax cuts, the £20bn national insurance giveaway that we’ve had since autumn has been essentially funded by these fiscal fiction spending cuts that are pencilled in.
Smith also said the UK has had almost two decades without real-terms wage growth. He said:
We don’t get back to the pre-2008 level of real wages until 2026. So that’s nearly two lost decades of real wage growth. So that’s an incredibly bleak backdrop in terms of living standards.
If you look at overall income, this is going to be the first parliament, which we have comparable income data for, where income is actually falling in real household disposable income terms.
Updated
Labour says Hunt’s long-term plan to abolish national insurance amounts to a £46bn unfunded tax cut
Good morning. If a budget is going to unravel, that often starts to happen on day two, after the initial headlines have gone and when the experts start to unpack what it really means. So far, there is not much sign of that happening, because Jeremy Hunt did not announce much yesterday that had not been well trailed in advance. But the reaction in Tory circles is a bit flat. And Labour has leapt on one of the more half-hearted proposals in the budget to make the case that Hunt is being even more irresponsible than Liz Truss.
Hunt said yesterday the Tories had a “long-term ambition” to get rid of employees’ national insurance. And in an email to Tory supporters last night Hunt said (bold text from the original):
This time, we’ve cut national insurance AGAIN – from 10% to 8%.
In total, across both tax cuts, that means the average British worker keeps £900 more a year.
But there’s further to go. I’d like to end the unfairness where people in work are paying tax twice on their earnings.
We want a simpler, fairer tax system where you only pay tax once.
If we stick with our plan that’s working, we’ll be able to make progress towards that goal in the next parliament.
Labour says this would cost £46bn. It has sent out this briefing with the costings.
It would cost many tens of billions to abolish NICs [national insurance contributions] entirely:
£39.96bn to abolish employee NICs main rate, going from 8p to 0p
£2.28bn to abolish self-employed NICs, going from a 6p rate to 0p
£2.9bn to abolish employee NICs additional rate, going from 2p to 0p
£0.54bn to abolish self-employed NICs additional rate, going from 2p to 0p
That means that in total Jeremy Hunt wants to deliver £46bn of unfunded tax cuts
That is £1bn more than the £45bn of unfunded tax cuts in the disastrous Truss mini-budget.
Rachel Reeves, the shadow chancellor, has been giving interviews this morning. She said that Labour is constantly being challenged to explain how it will fund its pledges (she admitted she now has to find money to pay for the proposals that would have been funded by the abolition of non-dom status), but Hunt now had to explain how he would fund a £46bn cut. She told the Today programme:
You just asked me how I’m going to find £2.1bn, and I will do that.
But the government yesterday suggested that are going to cut national insurance entirely at a cost of £46bn pounds a year. That is a bigger unfunded commitment to tax cuts than even Liz Truss and Kwasi Kwarteng tried.
So the question to the chancellor is, is this a real promise, is this a real commitment? And, if so, how is that going to be funded? I want taxes on working people to come down. But I’m never going to make a commitment without saying where the money is going to come from.
Hunt has also been giving interviews this morning. I will post more from both interview rounds shortly.
Here is the agenda for the day.
9am: The Resolution Foundation publishes its budget analysis at a press conference.
9.30am: Kemi Badenoch, the business secretary, takes questions in the Commons.
10.30am: The Institute for Fiscal Studies publishes its budget analysis at a press conference.
Morning: Rishi Sunak takes part in a Q&A in a pub in Yorkshire.
Morning: Keir Starmer and Rachel Reeves visit a building site in London.
11.30am: Downing Street holds a lobby briefing.
After 11.30am: MPs resume their debate on the budget.
After 12pm: Rishi Sunak is interviewed on Radio 2’s Jeremy Vine show.
1pm: Badenoch gives a speech at the Global Trade conference.
Also, David Cameron, the foreign secretary, is visiting Berlin.
If you want to contact me, do try the “send us a message” feature. You’ll see it just below the byline – on the left of the screen, if you are reading on a laptop or a desktop. This is for people who want to message me directly. I find it very useful when people message to point out errors (even typos – no mistake is too small to correct). Often I find your questions very interesting, too. I can’t promise to reply to them all, but I will try to reply to as many as I can, either in the comments below the line; privately (if you leave an email address and that seems more appropriate); or in the main blog, if I think it is a topic of wide interest.
Updated
