Chancellor Jeremy Hunt has delivered his first Budget, which focused on boosting business investment, and prompting those who have left their jobs to return to the work place.
Business and trade highlights of the Chancellor’s Spring Budget included:
On taxation and wages, the Chancellor announced:
Announcements on jobs and work included the following:
In light of the ongoing cost of living crisis, the Chancellor’s Budget also addressed energy concerns:
When it came to the economy and public finances, the Budget highlighted the following:
Commenting on the Spring Budget, Helen Dickinson, chief executive of the British Retail Consortium (BRC) (pictured – left), said: “In the face of volatile demand caused by high inflation and low consumer confidence, measures to support households with the cost of living, such as the ongoing energy bill support and changes to childcare costs, are welcomed.
“However, many businesses are weighed down by a myriad of higher costs right through the supply chain. Government must do more to limit one of the biggest drags to retail investment, which is oncoming regulatory burdens heading down the track, or risk a crash in business investment and further inflationary pressures.”
She added: “The Chancellor understands the need to train people to re-enter the workforce, yet he missed a key opportunity to fix the issues with the Apprenticeship Levy system that would support this very goal.
“Over the last three years, businesses have lost £3.5bn in unused Levy funds. To break this cycle of wasted investment, it is vital that Government allows businesses to use their hard-earned Levy funds for a wider array of skills courses.
“Without spending a penny, the Chancellor would increase investment in our workforce, helping businesses to prepare the UK economy for the skills it needs.”
Ms Dickinson said that while the Autumn Budget brought in some welcome changes to the business rates system, further reform is needed.
“The broken business rates system remains a drag on business investment, jobs, and economic growth. Rates must be paid in full whether firms are making a profit or a loss. This makes business rates the final nail in the coffin for many struggling stores; shutting shops, costing jobs and preventing new stores openings.
“The Chancellor should make good on the Conservative 2019 pledge to reform rates and lay out a clear roadmap for future reforms,” she said.
Business and trade highlights of the Chancellor’s Spring Budget included:
- Main rate of corporation tax, paid by businesses on taxable profits over £250,000, confirmed to increase from 19 percent to 25 percent.
- Companies with profits between £50,000 and £250,000 to pay between 19 percent and 25 percent.
- Companies able to deduct investment in new machinery and technology to lower their taxable profits.
- Tax breaks and other benefits for 12 new Investment Zones across the UK, funded by £80m each over the next five years.
On taxation and wages, the Chancellor announced:
- Cap on amount workers can accumulate in pensions savings over their lifetime before having to pay extra tax (currently £1.07m) to be abolished.
- Tax-free yearly allowance for pension pot to rise from £40,000 to £60,000 - having been frozen for nine years.
- Fuel duty frozen - the 5p cut to fuel duty on petrol and diesel, due to end in April, kept for another year.
Announcements on jobs and work included the following:
- 30 hours of free childcare for working parents in England expanded to cover one and two-year-olds, in a bid to help them work more.
- Families on Universal Credit to receive childcare support up front instead of in arrears, with the £646-a-month per child cap raised to £951.
- £600 "incentive payments" for those becoming childminders, and relaxed rules in England to let childminders look after more children.
- New fitness-to-work testing regime to qualify for health-related benefits.
- Funding for up to 50,000 places on new voluntary employment scheme for disabled people, called Universal Support.
- Tougher requirements to look for work and increased job support for lead child carers on Universal Credit.
- More places on "skills boot camps" to encourage over-50s who have left their jobs to return to the workplace.
In light of the ongoing cost of living crisis, the Chancellor’s Budget also addressed energy concerns:
- Government subsidies limiting typical household energy bills to £2,500 a year extended for three months, until the end of June.
- £200m to bring energy charges for prepayment meters into line with prices for customers paying by direct debit - affects 4m households.
When it came to the economy and public finances, the Budget highlighted the following:
- Office for Budget Responsibility predicts the UK will avoid recession in 2023, but the economy will shrink by 0.2 percent.
- Growth of 1.8 percent predicted for next year, with 2.5 percent in 2025 and 2.1 percent in 2026.
- UK's inflation rate predicted to fall to 2.9 percent by the end of this year, down from 10.7 percent in the last three months of 2022.
- Underlying debt forecast to be 92.4 percent of GDP this year, rising to 93.7 percent in 2024.
Commenting on the Spring Budget, Helen Dickinson, chief executive of the British Retail Consortium (BRC) (pictured – left), said: “In the face of volatile demand caused by high inflation and low consumer confidence, measures to support households with the cost of living, such as the ongoing energy bill support and changes to childcare costs, are welcomed. “However, many businesses are weighed down by a myriad of higher costs right through the supply chain. Government must do more to limit one of the biggest drags to retail investment, which is oncoming regulatory burdens heading down the track, or risk a crash in business investment and further inflationary pressures.”
She added: “The Chancellor understands the need to train people to re-enter the workforce, yet he missed a key opportunity to fix the issues with the Apprenticeship Levy system that would support this very goal.
“Over the last three years, businesses have lost £3.5bn in unused Levy funds. To break this cycle of wasted investment, it is vital that Government allows businesses to use their hard-earned Levy funds for a wider array of skills courses.
“Without spending a penny, the Chancellor would increase investment in our workforce, helping businesses to prepare the UK economy for the skills it needs.”
Ms Dickinson said that while the Autumn Budget brought in some welcome changes to the business rates system, further reform is needed.
“The broken business rates system remains a drag on business investment, jobs, and economic growth. Rates must be paid in full whether firms are making a profit or a loss. This makes business rates the final nail in the coffin for many struggling stores; shutting shops, costing jobs and preventing new stores openings.
“The Chancellor should make good on the Conservative 2019 pledge to reform rates and lay out a clear roadmap for future reforms,” she said.
