Jeremy Hunt spoke in the House of Commons today, outlining his spring Budget.
It is the first spring Budget that Hunt has given since becoming Chancellor in October 2022 following the dismissal of Kwasi Kwarteng.
Ahead of the announcement, Hunt confirmed that he would be sharing the Government's plans to tackle inflation, reduce debt and grow the struggling economy in the House of Commons after Wednesday's Prime Minister's questions.
Here are 15 key points that the Chancellor said in today's speech.
Today is Budget day. Last year we stabilised the economy, today we deliver the next part of our plan - growth. Tune in at 12.30pm to watch live here on my Twitter. pic.twitter.com/7fM4sZlZFu
— Jeremy Hunt (@Jeremy_Hunt) March 15, 2023
As he opened his speech, Hunt said that the UK's economy is “on the right track" and that the country will not enter a "technical recession" this year.
Hunt told the Commons: “In the face of enormous challenges I report today on a British economy which is proving the doubters wrong.
“In the autumn we took difficult decisions to deliver stability and sound money. Since mid-October, 10-year gilt rates have fallen, debt servicing costs are down, mortgage rates are lower and inflation has peaked.
“The International Monetary Fund says our approach means the UK economy is on the right track.”
£11 billion defence budget
Hunt confirmed the Government would add £11bn to its defence budget over the next five years.
The Chancellor said: “Today, following representations from our persuasive Defence Secretary, I confirm that we will add a total of £11bn to our defence budget over the next five years and it will 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.”
Corporation tax to increase to 25%
Wednesday's statement also saw Hunt announcing that corporation tax for businesses is to increase from 19% to 25%.
If a firm makes a profit of more than £250,000, they will pay 25% tax on their profits from April.
Only 10% of companies will pay the full 25% rate, the Chancellor said.
Childcare support (England only)
Hunt announced that he will pilot incentive payments of £600 for childminders joining the profession which will be raised to £1200 if they join through an agency.
Funding to nurseries will be increased to £204 million from September and will then rise to £288 million next year.
It comes as the optional minimum staff-to-child ratio will change from 1:4 to 1:5 for two-year-olds in England.
30 hours of free childcare for all under-fives from the moment maternity care ends to eligible households was also announced.
Jeremy Hunt told the Commons: “I today announce that in eligible households where all adults are working at least 16 hours, we will introduce 30 hours of free childcare not just for three- and four-year-olds, but for every single child over the age of nine months.
“The 30 hours offer will now start from the moment maternity or paternity leave ends. It’s a package worth on average £6,500 every year for a family with a two-year-old child using 35 hours of childcare every week and reduces their childcare costs by nearly 60%. Because it is such a large reform, we will introduce it in stages to ensure there is enough supply in the market.
“Working parents of two-year-olds will be able to access 15 hours of free care from April 2024, helping around half a million parents.
“From September 2024, that 15 hours will be extended to all children from 9 months up, meaning a total of nearly one million parents will be eligible. And from September 2025 every single working parent of under 5s will have access to 30 hours free childcare per week.”
Parents on Universal Credit will also now receive up to £951 for one child.
This will be raised to £1630 for two children per month and will now be paid upfront.
Pensions lifetime allowance to be abolished
The pensions annual tax-free allowance will be increased from £40,000 to £60,000.
It comes as he abolished the Lifetime Allowance which was previously set at £1.07 million.
Investment zones across the UK
Hunt is also predicted to create 12 investment zones which will benefit from tax breaks and be backed by £80m over five years.
Eight of the zones are located in England and there are also thought to be four in Scotland, Wales and Northern Ireland.
The Chancellor identified the West Midlands, West Yorkshire, Liverpool, among others as "potential Canary Wharfs" in England.
It comes amid a series of levelling-up and local transport-related funding pots with over £200 million in high-quality local regeneration projects across England and over £400 million available for new Levelling Up Partnerships.
He continued: “Having listened to the case for better local transport infrastructure from many Members, I can announce a second round of the City Region Sustainable Transport Settlements, allocating £8.8 billion over the next five-year funding period.”
Community facilities support
Jeremy Hunt announced a £63m fund to "keep public leisure centres and pools afloat" to help them meet energy costs and become more efficient.
Pint duty frozen
The Chancellor also announced that the duty on a pint will also be frozen which follows changes already due to come into effect in August.
Hunt said he would “significantly increase the generosity of draught relief”, which he said could not be done when the UK was in the EU.
Speaking to MPs in the Commons, Hunt said: “From August 1, the duty on draught products in pubs will be up to 11p lower than the duty in supermarkets, a differential we will maintain as part of a new Brexit pubs guarantee. British ale may be warm, but the duty on a pint is frozen.”
The change will also apply to “every pub in Northern Ireland” due to the Windsor Framework, the Chancellor added.
He also announced an increased draught relief for pubs.
Hunt said: “Today, I will do something that was not possible when we were in the EU and significantly increase the generosity of Draught Relief, so that from 1 August, the duty on draught products in pubs will be up to 11p lower than the duty in supermarkets, a differential we will maintain as part of a new Brexit pubs guarantee.
“British ale may be warm, but the duty on a pint is frozen.”
Freeze fuel duty
Speaking about fuel duty, Hunt confirmed that it was not the right time to uprate fuel duty since inflation remains high.
“So here’s what I am going to do: for a further 12 months I’m going to maintain the 5p cut and I’m going to freeze fuel duty too," the Chancellor explained.
"That saves the average driver £100 next year and around £200 since the 5p cut was introduced.”
Prepayment penalty to end
A “prepayment penalty” for energy bills which sees households with prepayment meters charged more than those on direct debit will end.
The Chancellor's announcement follows Ofgem's agreement with suppliers to introduce a temporary suspension over forced installations of prepayment meters.
“But today I go further and confirm we will bring their charges in line with comparable direct debit charges," Hunt confirmed.
"Under a Conservative government, the energy premium paid by our poorest households is coming to an end.”
Uprate Tobacco duty and freeze gross gaming duty yield bands
The Government will “uprate tobacco duty, and we will freeze the gross gaming duty yield bands”.
He told the Commons: “Taken together today’s measures lead to a slightly lower overall tax burden for the rest of the Parliament compared to the OBR’s autumn forecast. Other parties run out of money, but a Conservative government is reducing borrowing and improving our public finances.
“By doing so, we make sure we are on track to… … halve inflation … get debt falling …and grow our economy, which I turn to next.”
£200 million increase to pothole fund
The Chancellor announced a further £200m increase to help communities tackle England's pothole problem.
It follows the £500m already allocated to the issue.
Scottish and Welsh Government funding
An additional £320m of funding will be allocated to the Scottish Government with £180m going to the Welsh Government and £130m to the Northern Ireland executive.
The Chancellor also announced up to £8.6m of targeted funding for the Edinburgh Festivals and £1.5m to repair the Cloddach Bridge.
Additionally, Hunt confirmed a £20m fund to restore the Holyhead Breakwater in Wales alongside up to £3m to extend the Tackling Paramilitarism Programme in Northern Ireland.
Up to £40m was also pledged to extend participation in further and higher education.
£20 billion towards carbon capture
In a move to reduce the carbon emission that contributes to climate change, the Chancellor outlined £20bn of support for the early development of carbon, capture, usage and storage.
Hunt said that the Government is starting with projects from the East Coast to Merseyside to North Wales.
The fund will support up to 50,000 jobs as well as attract private sector investment, Hunt said.
He also confirmed the extension of the Climate Change Agreement scheme for two years which will allow eligible businesses to claim £60 million of tax relief on energy efficiency measures.
It comes as the Chancellor said that nuclear power will be classed as “environmentally sustainable” to drive investment in the energy sector.
'AI sandbox' to boost UK artificial intelligence businesses support
The Chancellor has announced that there will be a prize worth £1m every year, for the next 10 years, "to the person or team that does the most ground-breaking AI research".
It comes as Hunt revealed a “quantum strategy” to support the future of computing.
Hunt said: “I can report to the House that we will launch an AI sandbox to trial new, faster approaches to help innovators get cutting edge products to market, work at pace with the Intellectual Property Office to provide clarity on IP rules so generative AI companies can access the material they need, and ask Sir Patrick Vallance’s successor, Dame Professor Angela McLean, to report before the summer on options around the growth duty for regulators.”
The strategy will include a research and innovation programme of £2.5bn.
Disability benefits change
The Chancellor announced plans to abolish the work capability assessment and to separate benefits entitlement from an individual’s ability to work as published in a white paper today.
Disabled benefit claimants will always be able to seek work without fear of losing financial support, Hunt has said.
There will be a new, voluntary employment scheme for disabled people which will involve the government spending up to £4000 per person to help them find appropriate jobs and put in place the support they need.
50,000 places will be funded under the change every single year, the Chancellor added.
