How Jeremy Hunt’s Budget pledges stack up one year on from his first Spring Statement | Personal Finance | Finance

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Last year’s Budget from  promised to tackle inflation, improve childcare for working parents, boost growth and business investment.

And all eyes will be on the Chancellor on Wednesday, March 6, when he will deliver this year’s Spring Statement to a packed House of Commons in Westminster, central London.

The promises he makes will be crucial to the Conservative Party’s performance in the upcoming General Election but how voters judge the likelihood of those policies manifesting could depend on how they view his track record of delivering.

Here, Express.co.uk takes a look at which of his aims the Chancellor and his colleagues in Government have achieved 12 months later.

Inflation

In the 2023 Budget, Mr Hunt highlighted a forecast from the Office for Budget Responsibility (OBR) that inflation would be halved by the end of 2023.

At the time, inflation was above 10 percent and since then the figure has come down to four percent with predictions it could drop to two percent by the summer.

That represents a big tick for the government, however critics will point out that the Bank of England rather than ministers have taken the lead on inflation, using higher interest rates to achieve this aim.

At the same time, global factors, including a reduction in the price of oil and energy have been key.

Childcare

One of the biggest measures announced a year ago was free additional childcare.

From April 2024, eligible two-year-olds in England will be entitled to 15 hours a week of childcare during term time.

More than 100,000 working parents have registered for this. And the scheme will be extended to parents of children aged nine months to two years in September 2024 and then increased to 30 hours a week in September 2025.

This measure was widely welcomed by business leaders, such as the CBI, and parents, however there are fears it will not be delivered as promised.

There are concerns that nurseries have not received information on the scheme from Whitehall and that they do not have the staff to cope with the extra demand.

Estimates suggest more than 100,000 additional children will be eligible for full-time care by September 2025. In theory, this would require another 27,500 childcare professionals.

In February, the government launched a campaign to recruit more staff, but early-years charities said it would be too late to help.

Growth

Mr Hunt labelled his 2023 Budget as a ‘Budget for growth’.

Recent official figures from the Office for National Statistics (ONS) show this has not – at least so far – been achieved.

In fact, the UK was in a ‘technical recession’ – two quarters of a slightly shrinking economy – at the end of last year.

At the same time, Gross Domestic Product (GDP) per head of population has been falling for more than a year.

Looking ahead, both the Conservatives and Labour have made boosting growth central to their General Election strategy.

Mr Hunt is expected to promise tax cuts in the Budget on Wednesday in a way that is designed to boost growth later this year.

Business investment

One of the big Budget 2023 announcements was “full expensing”, allowing companies to deduct the full amount they invest in equipment and machinery from their profits.

It means for every pound a company invests, its taxes are cut by up to 25p.

Mr Hunt said: “Its impact on our economy will be huge,” citing the OBR as saying it would increase business investment by three percent a year.

The policy came into force on 1 April 2023. The level of business investment for the whole of 2023 was 6.1 percent higher than it had been in 2022.

Karl Williams, research director at the Centre for Policy Studies (CPS) welcomed this increase, saying: “Business investment has been flat for years, contributing to weak economic growth.”

He said it was too soon to say what proportion of the increase was due to full expensing, but predicted that it would eventually increase it by about 1.5 percent a year.

Back to work

Mr Hunt said he was going to promote growth was by helping people back into work, including those not working due to disability or long-term sickness.

His measures included apprenticeships for over-50s, abolishing the lifetime pension allowance and sanctioning benefits claimants who choose not to take up a reasonable job offer.

He said that, excluding students, there were over seven million adults of working age who are not in work.

Official figures show that figure has fallen slightly, but there have been changes to the data that mean they are not strictly comparable.

Pubs

The Chancellor announced a change in the alcohol duty regime to make draught beer and cider cheaper.

The relief reduced the tax on them by 9.2 percent as Mr Hunt said: “We’re protecting the price of a pint.”

Despite this measure, pubs and breweries have pushed up prices due to increases in other business costs, such as energy and staff.

The Office for National Statistics (ONS) said they were up 7.5 percent in January 2024 compared with the same month last year, with prices increasing every month of the year, despite draught relief.

Prepayment meters

In the 2023 Budget, Mr Hunt announced measures on energy bills including stopping people who use prepayment meters having to pay more for their energy than those paying by direct debit.

He said: “The energy premium paid by our poorest households is coming to an end.”

This has been achieved in two stages. Initially he changed the Energy Price Guarantee to temporarily remove the difference.

From April, Ofgem has changed the energy price cap formula to remove differences in charges for those who have a prepayment meter and those who pay via direct debit.



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