In his first Budget, since he became Chancellor in October last year, Mr Hunt opened by referencing the Office for Budget Responsibility (OBR) forecast which states that the British economy is “on the right track”. He explained: “The UK won’t enter a technical recession this year. They forecast we will meet the PM’s priorities to halve inflation, reduce debt and get the economy growing.”
The OBR products that inflation is due to fall from 10.7 percent last year to 2.9 percent by the end of 2023.
Mr Hunt said his Budget will achieve this growth by “removing obstacles that stop businesses investing; by tackling labour shortages that stop them recruiting; by breaking down barriers that stop people working; and by harnessing British ingenuity to make us a science and technology superpower.”
The UK budget is now in surplus, with Mr Hunt explaining: “The current budget is in surplus, meaning we only borrow for investment and not for day-to-day spending.” He added that the Government is on track to reduce debt to 92.4 percent of GDP by next year, falling every year after until 2027-28.
Among the measures announced, Mr Hunt unveiled a £63million fund for public leisure centres and pools, an annual £1million prize for AI research, and allocated £400million to increase the availability of mental health and musculoskeletal resources for workers.
He also used post-Brexit freedoms to reduce the price of pints in British pubs. Around £80million will be invested in 12 new Investment Zones to help level up the nation over the next five years.
Fuel duty has also been frozen for another 12 months, and a 5p reduction will remain. Mr Hunt said: “Now is not the right time to update fuel duty with inflation.”
The Energy Price Guarantee will remain at £2,500 for the typical household for the next three months, saving the average family a further £160. Additionally, those on prepayment meters will see their bills brought in line with direct debit charges.
Mr Hunt announced that a further £5billion will be given to the Ministry of Defence across the next two years, with £11billion being allocated over five years. Some £30million has also been given to support veterans. He said: “We will provide a package of over £30million to support veterans with injuries returning from service and increase the availability of veterans’ houses.”
Corporation tax for businesses will increase from 19 percent to 25 percent, as planned, meaning firms making a profit of more than £250,000 will pay 25 percent tax on their profits from April. Smaller businesses will also benefit from the Annual Investment Allowance increasing to £1million.
The £1million lifetime tax-free allowance for pensions will also be abolished to encourage higher-paid workers to remain in work for longer. He also revealed new “returnships” will be created to help update the skills of workers over 50 and tackle economic inactivity. An expansion of free childcare will mean parents of one and two-year-olds will be eligible for 30 hours a week to help parents return to work.
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