In Jeremy Hunt’s first full budget which he called the “budget for growth” there were no surprises or controversial changes.
Early announcements on the extension of the Energy Price Guarantee and the trailing of a possible expansion of free childcare provided the backdrop to the Chancellor’s Spring Budget on 15th March.
In the event, both were confirmed with the Energy Price Guarantee for households being extended to June 2023 and a phased introduction of up to 30 hours per week free childcare for families with children over 9 months old being fully delivered by September 2025.
Insisting that the Government was following the economic plan set out last Autumn and that the plan was working, Chancellor Jeremy Hunt laid out his ‘Budget for Growth’ today.
He whetted taxpayers’ appetite by announcing that thanks to post – Brexit freedoms he would be supporting pubs by reducing the duty on draught ales by 11p less than the equivalent price charged in supermarkets. This was followed by confirmation that Fuel Duty was to remain frozen along with the 5p cut.
Mr Hunt explained that the Budget was based on supporting the 4 pillars of industrial strategy for the UK.
Everywhere
He gave details of investments and funding for a dozen regeneration projects around the UK in support of the Government’s levelling-up agenda together with further assistance to local regeneration work. Not least an additional sum to local authorities for their ‘potholes fund’!
Enterprise
With the tax relief ‘super-deduction’ of 130% of eligible capital expenditure by businesses ending on 31st March the Chancellor explained that he would be introducing a fully capitalised expenses regime going forward with the intention of making it permanent when fiscally possible. This means that businesses will be able to write-off the full cost of qualifying main rate plant and machinery costs in the year of investment.
Enhanced tax relief will be available for Research & Development intensive smaller companies and the creative industries will continue to be supported.
A range of other green and hi-tech computing, life sciences and the nuclear industry will receive further investment and support to help develop the UK as a world centre of excellence and safeguard future power independence.
Employment
The Chancellor sought to address problems of shortages in the labour market in a number of ways. Proposed measures would encourage the disabled and those suffering from debilitating illnesses to work longer without losing benefits. He also hoped that the extension of the Childcare free hours would encourage families where both parents wanted to work, to enable, particularly mothers, to do so.
Mr Hunt targeted the over-50s as a group whose skills and experience were needed in the workplace and cited NHS doctors who, because of current tax rules on pension contributions were disincentivised from continuing to work.
Pre-Budget speculation that the Lifetime Allowance for pension contributions would be increased, along with the threshold at which the Annual Charge makes it disadvantageous to invest in a pension, proved correct in part. Mr Hunt proudly announced that the Lifetime Allowance of £1.07m was to be abolished altogether whilst the Annual Allowance would rise from £40,000 to £60,000.
Education
As part of the phasing in of the extended Childcare plans Mr Hunt explained that incentives for childminders would be increased to encourage involvement and that flexibility over the child/staff ratios would be necessary.
As an encouragement to draw in older workers from semi-retirement there would be a ‘Returnership’ scheme rather like an apprenticeship where new, valuable skills would be taught.
Additional training for universal credit claimants would be made available and funds would be provided for an expansion of the programme entitled to Special Educational Needs support.
With all the upheaval in Government last year and the frenetic economic and fiscal uncertainty suffered by the country it seems that Budget 2023 may have restored the equilibrium.
