All eyes are on Jeremy Hunt as the Chancellor is delivering his Budget in the House of Commons.
- The fiscal watchdog the Office for Budget Responsibility forecasts inflation falling below the 2% target in a few months’ time
- Extension of the alcohol duty freeze until February 2025
- Chancellor confirmed he has decided to maintain the 5p cut and freeze fuel duty for a further 12 months
- VAT registration threshold will be increased from £85,000 to £90,000 from the start of April
- New “British Isa” giving investors a £5,000 extra tax-free allowance
- Chancellor promised to guarantee “the rates that will be paid to childcare providers” to deliver the Government’s free childcare expansion pledge
- Planned growth in day-to-day public spending kept at 1% in real terms
- Introduction of an excise duty on vapes from October 2026, a one-off increase in tobacco duty and a one-off adjustment to rates of air passenger duty on non-economy flights
- Abolition of the non-dom system that lets foreign nationals avoid paying UK tax on money made overseas
Here’s the latest:
1.40pm
Chancellor Jeremy Hunt, on non-doms, said: “Recognising the contribution many of these individuals have made to our economy, we will put in place transitional arrangements for those benefitting from the current regime.
“That will include a two-year period in which individuals will be encouraged to bring wealth earned overseas to the UK where it can be spent and invested here – a measure that will attract onshore an additional £15 billion of foreign income and generate more than £1 billion of extra tax.
“Overall abolishing non-dom status will raise £2.7 billion a year by the end of the forecast period, money the party opposite (Labour) planned to use for spending increases, but today a Conservative government makes a different choice. We use that revenue to help cut taxes on working families.”
1.39pm
Turning to taxes paid by those who are resident in the UK but not domiciled here for tax purposes, Mr Hunt told the Commons: “Nigel Lawson wanted to end the non-dom regime in his great tax reforming budget of 1988 which is where I suspect the Labour Party got the idea from.
“I too have always believed that provided we protect the UK’s attractiveness to international investors, those with the broadest shoulders should pay their fair share. After looking at the issue over many months, I have concluded that we can indeed introduce a system which is both fairer and remains competitive with other countries.
“So the Government will abolish the current tax system for non-doms, get rid of the outdated concept of domicile…”
As he was heckled by Labour MPs, Mr Hunt joked: “I aim to please all sides of the House in all my budgets. And will replace the non-dom regime with a modern, simpler and fairer residency-based system.
“From April 2025, new arrivals to the UK will not be required to pay any tax on foreign income and gains for their first four years of UK residency, a more generous regime than at present and one of the most attractive offers in Europe.
“But after four years, those who continue to live in the UK will pay the same tax as other UK residents.”
1.38pm
BREAKING: Chancellor Jeremy Hunt confirmed a further 2p National Insurance cut, from 10% to 8% from April 6, with self-employed National Insurance being slashed from 8% to 6%.
1.36pm
The high-income child benefit charge threshold will be raised from £50,000 to £60,000 and the taper will extend up to £80,000, Chancellor Jeremy Hunt has said.
1.35pm
The Chancellor’s announcement there will be an additional £2.5 billion available to the NHS in the coming year is “just enough to stop spending falling” and “not an increase on this year’s spending”, according to IFS director Paul Johnson.
Extra £2.5bn for NHS next year is just enough to stop spending falling compared to this year. It is not an increase on this year's spending. History suggests there will be more top ups to come.
— Paul Johnson (@PJTheEconomist) March 6, 2024
Mr Johnson also criticised the extension of the Energy Profits Levy for another year to 2029, which Mr Hunt said would raise £1.5 billion, posting: “We need a stable regime. It is ludicrous adjusting this year on year to raise bits and pieces of money.
“There is a case for high taxes on these sorts of profits. Let’s have a stable regime.”
1.33pm
Turning to oil and gas, Mr Hunt said the Government will legislate in the Finance Bill to abolish the Energy Profits Levy “should market prices fall to their historic norm for a sustained period of time”.
He added: “But because the increase in energy prices caused by the Ukraine war is expected to last longer, so too will the sector’s windfall profits. So I will extend the sunset on the Energy Profits Levy for an additional year to 2029 raising £1.5 billion.”
1.32pm
Mr Hunt received cheers as he spoke of lower taxes, telling MPs: “If we want to encourage hard work, we should let people keep as much of their own money as possible.
“Conservatives look around the world at economies in North America and Asia and notice that countries with lower taxes generally have higher growth. Economists argue about cause and correlation. But we know that lower taxed economies have more energy, more dynamism and more innovation. We know that is our future too.”
Mr Hunt said he was confirming the introduction of an excise duty on vaping products from October 2026 in a bid to discourage non-smokers from taking up vaping.
Mr Hunt also said he would abolish the furnished holiday lettings regime.
He went on: “I have also been looking at the stamp duty relief for people who purchase more than one dwelling in a single transaction, known as multiple dwellings relief. I see the Deputy Leader of the Labour Party (Angela Rayner) paying close attention given her multiple dwellings. This relief was not actually designed for her but intended to support investment in the private rented sector. However, an external evaluation found no strong evidence that it had done so and that it was being regularly abused. So I am going to abolish it.”
He said he was going to reduce the higher rate of property capital gains tax from 28% to 24%, joking to Ms Rayner: “That one really is for Angela.”
1.31pm
BREAKING: Chancellor Jeremy Hunt confirmed he will abolish the non-dom system that lets foreign nationals avoid paying UK tax on money made overseas, replacing it with a “modern, simpler and fairer residency-based system”.
RECAP
Chancellor freezes fuel and alcohol duties for a year
1.26pm
BREAKING: Chancellor Jeremy Hunt confirmed the introduction of an excise duty on vapes from October 2026, a one-off increase in tobacco duty and a one-off adjustment to rates of air passenger duty on non-economy flights.
Protesters unimpressed with Budget
1.24pm
IFS director Paul Johnson has said the Chancellor’s plan to keep planned growth in day-to-day public spending at 1% in real terms will mean some public services having to be cut by a total of around £20 billion per year by 2028.
Keeping planned growth in day to day spending at 1% p.a. real over next parliament.
— Paul Johnson (@PJTheEconomist) March 6, 2024
Key point is that, with bigger increases nailed in for health, defence, and childcare, other public services will need to be cut - by c£20bn p.a. by 2028 on our calculations.
Mr Johnson posted to X: “Keeping planned growth in day to day spending at 1% (per annum) real over next parliament.
“Key point is that, with bigger increases nailed in for health, defence, and childcare, other public services will need to be cut – by (circa) £20bn (per annum) by 2028 on our calculations.”
1.22pm
Chancellor Jeremy Hunt, on his bid to make public services “more efficient”, said: “Police officers waste around eight hours a week on unnecessary admin – with higher productivity, we could free up time equivalent to 20,000 officers over a year.
“So we will spend £230 million rolling out time and money saving technology which speeds up police response time by allowing people to report crimes by video call and where appropriate use drones as first responders.”
Mr Hunt said £170 million would be used to fund “non-court resolution, reduce reoffending and digitise the court process”.
He also said £165 million would be invested over the next four years to increase the capacity of the children’s homes estate while £105 million over the next four years would be used to build 15 new special free schools.
1.19pm
Chancellor Jeremy Hunt said improvements will be made to the NHS so it can be used to confirm and modify all appointments, telling MPs: “On top of funding this longer-term transformation, we will also help the NHS meet pressures in the coming year with an additional £2.5 billion.
“This will allow the NHS to continue its focus on reducing waiting times and brings the total increase in NHS funding since the start of the parliament to 13% in real terms.”
Today, I can announce we've agreed a landmark £3.4 billion Productivity Plan with the NHS, which we're funding in full.
— Jeremy Hunt (@Jeremy_Hunt) March 6, 2024
The NHS say that will unlock over £35 billion pounds in the coming years, ten times the amount we put in. At the next spending review, that will be a model… pic.twitter.com/6JjqV3U8ev
1.18pm
Chancellor Jeremy Hunt said there is a need for a “more productive state not a bigger state”, saying: “I am keeping the planned growth in day-to-day spending at 1% in real terms. But we are going to spend it better.
“So today I am announcing a landmark public sector productivity plan that restarts public service reform and changes the Treasury’s traditional approach to public spending.”
On the NHS, Mr Hunt said the systems that support its staff are “often antiquated” before adding on the long-term workforce plan: “I wanted better care for patients, better value for taxpayers and more rewarding work for its staff. Making changes on the scale we need is not cheap. The investment needed to modernise NHS IT systems so they are as good as the best in the world costs £3.4 billion.
“But it helps unlock £35 billion of savings, 10 times that amount. So in today’s Budget for long-term growth, I have decided to fund the NHS productivity plan in full.”
He added: “We will slash the 13 million hours lost by doctors and nurses every year to outdated IT systems. We will use AI to cut down and potentially cut in half form filling by doctors. We will digitise operating theatre processes allowing the same number of consultants to do an extra 200,000 operations a year.
“We will fund improvements to help doctors read MRI and CT scans more accurately and quickly, speeding up results for 130,000 patients every year and saving thousands of lives, something I know would have delighted my brother Charlie who I recently lost to cancer.”
1.17pm
BREAKING: Chancellor Jeremy Hunt has said planned growth in day-to-day public spending will be kept at 1% in real terms but the Government will “spend it better” with a new “productivity plan”.
1.14pm
Chancellor Jeremy Hunt said AstraZeneca plans to invest £650 million in the UK to expand their footprint on the Cambridge Biomedical Campus and fund the building of a vaccine manufacturing hub in Speke in Liverpool.
Mr Hunt also joked he believes Education Secretary Gillian Keegan is doing an “F-ing good job” before saying he would be guaranteeing the rates that will be paid to childcare providers to deliver the Government’s offer for children over nine months old for the next two years.
On the armed forces, Mr Hunt said: “We are providing more military support to Ukraine than nearly any other country and our spending will rise to 2.5% as soon as economic conditions allow.”
1.13pm
BREAKING: Chancellor Jeremy Hunt promised to guarantee “the rates that will be paid to childcare providers” to deliver the Government’s free childcare expansion pledge.
1.12pm
Jeremy Hunt said Great British Nuclear will begin the next phase of the small modular reactor selection process, with companies having until June to submit their initial tender responses.
On creative industries, Mr Hunt said the Government will provide eligible film studios in England with 40% relief on their gross business rates until 2034.
He also said: “We will introduce a new tax credit for UK independent films with a budget of less than £15 million. For our creative industries more broadly, we will provide £26 million of funding to our pre-eminent theatre, the National Theatre, to upgrade its stages.”
On recognising the contribution to the creative industries and tourism made by orchestras, museums, galleries and theatres, Mr Hunt said: “In the pandemic we introduced higher 45% and 50% level of tax relief which were due to end in March 2025. It has been a lifeline for performing arts across the country.
“Today in recognition of their vital importance to our national life I can announce I am making those tax reliefs permanent at 45% for touring and orchestral productions and 40% for non-touring productions. Lord Lloyd-Webber says this will be a once in a generation transformational change that will ensure Britain remains the global capital of creativity.
“I suspect the theatre reliefs may be of particular interest to the shadow chancellor who fancies her thespian skills when it comes to acting like a Tory. The trouble is we all know how her show ends: higher taxes like every Labour government in history.”
1.10pm
One million pounds will be given towards the cost of building a memorial to honour the Muslims who died in the First and Second World Wars “in the service of freedom and democracy”, the Chancellor has said.
Jeremy Hunt told the Commons: “As we mourn the tragic loss of life in Israel and Gaza, the Prime Minister reminded us last week of the need to fight extremism and heal divisions.
“So I start today by remembering the Muslims who died in two world wars in the service of freedom and democracy.
“We need a memorial to honour them, so following representations from the Right Honourable Member for Bromsgrove (Sajid Javid) and others, I’ve decided to allocate £1 million towards the cost of building one.
“Whatever your faith or colour or class, this country will never forget the sacrifices made for our future.”
1.07pm
Chancellor Jeremy Hunt said he intends to reform the Isa system to encourage more people to invest in UK assets.
He said: “After a consultation on its implementation, I will introduce a brand new British Isa which will allow an additional £5,000 annual investment for investments in UK equity with all the tax advantages of other Isas.
“This will be on top of the existing Isa allowances and ensure that British savers can benefit from the growth of the most promising UK businesses as well as supporting them with the capital to help them expand.”
1.06pm
Chancellor Jeremy Hunt said new powers will be given to the Pensions Regulator and Financial Conduct Authority to ensure “better value” from defined contribution schemes by “judging performance on overall returns not cost”.
He said: “But I remain concerned that other markets such as Australia generate better returns for pension savers with more effective investment strategies and more investment in high quality domestic growth stocks.
“So I will introduce new requirements for DC and local government pension funds to disclose publicly their level of international and UK equity investments. I will then consider what further action should be taken if we are not on a positive trajectory towards international best practice.”
Mr Hunt said he will proceed with a retail sale for part of the Government’s remaining NatWest shares this summer at the earliest, subject to market conditions and value for money.
1.03pm
BREAKING: Chancellor Jeremy Hunt announced a new “British Isa” giving investors a £5,000 extra tax-free allowance to “encourage more people to invest in UK assets”.
1.02pm
Chancellor Jeremy Hunt said: “As a result of the decisions we take today, the Scottish Government will receive nearly £300 million in Barnett consequentials, with nearly £170 million for the Welsh Government and £100 million for the Northern Ireland Executive.”
Mr Hunt said there would be a long-term funding settlement for the future development corporation in Cambridge at the next spending review.
Mr Hunt also said the Government has reached agreement on a £160 million deal with Hitachi to purchase the Wylfa site in Ynys Mon and the Oldbury site in South Gloucestershire.
1.01pm
The director of the IFS has said the Chancellor’s pledge that borrowing will fall to 1.2% of GDP over the next five years should be taken “with a pinch of salt”.
He said it “will depend on implementing extremely tight spending plans which will imply cuts for many public services”.
Chancellor announces borrowing falling over next five years to just 1.2% of GDP.
— Paul Johnson (@PJTheEconomist) March 6, 2024
Take this with a pinch of salt.
Will depend on implementing extremely tight spending plans which will imply cuts for many public services.
12.59pm
Chancellor Jeremy Hunt took aim at Labour leader Sir Keir Starmer as he mentioned Surrey, noting: “I know he has been taking advice from Lord Mandelson who yesterday rather uncharitably said he needed to shed a few pounds – ordinary families will shed more than a few pounds if that lot get in.
“If he wants to join me on my marathon training he’s most welcome.”
Motoring groups welcome fuel duty freeze
Motoring groups have welcomed Jeremy Hunt’s decision to freeze fuel duty.
RAC head of policy Simon Williams said: “With a general election looming, it would have been a huge surprise for the Chancellor to tamper with the political hot potato that is fuel duty in today’s Budget.
“It appears the decision of if or when duty will be put back up again has been quietly passed to the next government.
“But, while it’s good news that fuel duty has been kept low, it’s unlikely drivers will be breathing a collective sigh of relief as we don’t believe they’ve fully benefited from the cut that was introduced just two years ago due to retailers upping margins to cover their ‘increased costs’.
“This has meant fuel prices have been higher than they would otherwise have been.
“What’s more, despite today’s positive news it’s still the case that drivers are once again enduring rising prices at the pumps, sparked by the oil price going up – the average cost of a litre is already up by more than 4p since the start of the year.”
12.56pm
Chancellor Jeremy Hunt said he will shortly publish draft legislation for full expensing to apply to leased assets, noting: “A change I intend to bring in as soon as it is affordable.”
He also told MPs: “I will provide £200 million of funding to extend the Recovery Loan Scheme as it transitions to the Growth Guarantee Scheme, helping 11,000 SMEs access the finance they need.”
Mr Hunt also said: “I will reduce the administrative and financial impact of VAT by increasing the VAT registration threshold from £85,000 to £90,000 from April 1 – the first increase in seven years.
“This will bring tens of thousands of businesses out of paying VAT altogether and encourage many more to invest and grow.”
Mr Hunt said a package of support potentially worth more than £100 million would be provided to the north east devolution deal.
12.55pm
BREAKING: Chancellor Jeremy Hunt has announced the VAT registration threshold will be increased from £85,000 to £90,000 from the start of April, saying it would help “tens of thousands of businesses.”
12.51pm
Chancellor Jeremy Hunt said the economy is expected to grow 0.8% this year and 1.9% next year, 0.5% higher than the OBR’s autumn forecast.
He said: “After that growth rises to 2%, 1.8%, and 1.7% in 2028.”
Mr Hunt also told MPs: “Because we have turned the corner on inflation, we will soon turn the corner on growth.”
Mr Hunt urged Labour MPs to listen to him as “they don’t have a growth plan”, adding: “Our plan is for economic growth not sustained through migration but one that raises wages and living standards for families.”
12.50pm
Chancellor Jeremy Hunt, on debt figures, said: “Underlying debt, which excludes Bank of England debt, will be 91.7% in 2024-25 according to the OBR, then 92.8%, 93.2%, 93.2% before falling to 92.9% in 2028-29.”
He added: “Our underlying debt is therefore on track to fall as a share of GDP, meeting our fiscal rule. We continue to have the second lowest level of government debt in the G7, lower than Japan, France or the United States.”
Mr Hunt went on: “We also meet our second fiscal rule for public sector borrowing to be below 3% of GDP three years early. Borrowing falls from 4.2% of GDP in 2023-24, to 3.1%, 2.7%, 2.3%, 1.6% and 1.2% in 2028-29. By the end of the forecast, borrowing is at its lowest level of GDP since 2001.”
The Chancellor claimed “none of that would be possible if Labour implemented their pledge to decarbonise the grid five years early by 2030”.
12.46pm
Chancellor Jeremy Hunt said he would maintain the 5p cut and freeze fuel duty for a further 12 months.
He said: “The shadow chancellor complained about the freeze on fuel duty and Labour has opposed it at every opportunity. The Labour Mayor of London wants to punish motorists even more with his Ulez plans. But lots of families and sole traders depend on their car. If I did nothing fuel duty would increase by 13% this month.”
Mr Hunt added: “I have as a result decided to maintain the 5p cut and freeze fuel duty for a further 12 months. This will save the average car driver £50 next year and bring total savings since the 5p cut was introduced to around £250.
“Taken together with the alcohol duty freeze, this decision also reduces headline inflation by 0.2 percentage points in 2024-25 allowing us to make faster progress towards the Bank of England’s 2% target.”
12.46pm
Alcohol duties will remain frozen until February 2025, Jeremy Hunt said, with the aim of “backing the great British pub”.
The Chancellor told the Commons: “In the autumn statement I froze alcohol duty until August of this year. Without any action today, it would have been due to rise by 3%.”
He said he had listened to representations from MPs about the tax, adding: “So today I have decided to extend the alcohol duty freeze until February 2025. This benefits 38,000 pubs all across the UK – and on top of the £13,000 saving a typical pub will get from the 75% business rates discount I announced in the autumn.
“We value our hospitality industry and we are backing the great British pub.”
12.45pm
BREAKING: Chancellor Jeremy Hunt confirmed he has decided to maintain the 5p cut and freeze fuel duty for a further 12 months.
12.44pm
A fund aimed at supporting vulnerable households with the cost of living will be extended a further six months beyond March, the Chancellor said.
Jeremy Hunt told the Commons: “Next the Household Support Fund. It was set up on a temporary basis and due to conclude at the end of this month.”
He added: “I have decided that – with the battle against inflation still not over – now is not the time to stop the targeted help it offers. We will therefore continue it at current levels for another six months.”
12.43pm
BREAKING: Chancellor Jeremy Hunt announced the extension of the alcohol duty freeze until February 2025, benefiting 38,000 pubs across the UK.
12.42pm
Chancellor Jeremy Hunt said inflation is forecast to fall below the 2% target in a few months’ time.
He told MPs: “When the Prime Minister and I came into office, it was 11%. But the latest figures show it is now 4%, more than meeting our pledge to halve it last year. And today’s forecasts from the OBR show it falling below the 2% target in just a few months’ time, nearly a whole year earlier than forecast in the autumn statement.
“That did not happen by accident. Whatever the pressures and whatever the politics, a Conservative government, working with the Bank of England, will always put sound money first.”
Mr Hunt said he wanted to focus on people falling into debt, saying: “Nearly one million households on Universal Credit take out budgeting advance loans to pay for more expensive emergencies like boiler repairs or help getting a job.
“To help make such loans more affordable, I have today decided to increase the repayment period for new loans from 12 months to 24 months.”
Mr Hunt said a debt relief order can cost £90 and deter people seeking one, adding: “Having listened carefully to representations from Citizens Advice, I today relieve pressure on around 40,000 families every year by abolishing that £90 charge completely.”
12.41pm
The Chancellor said the Government was in a position to deliver “permanent tax cuts”, and billed his financial statement as a “Budget for long-term growth”.
Jeremy Hunt said: “Because of the progress we’ve made, because we are delivering the Prime Minister’s economic priorities, we can now help families not just with temporary cost-of-living support, but with permanent cuts in taxation.”
He claimed Conservatives know “lower tax means higher growth. And higher growth means more opportunity, more prosperity and more funding for our precious public services”.
Mr Hunt warned that growth could not come from “unlimited migration”, but from a high skilled, high wage economy, and claimed Labour’s plans for government would “destroy jobs with 70 new burdens on employers”.
He added: “Instead of going back to square one, the policies I announce today mean more investment, more jobs, better public services, and lower taxes in a Budget for long-term growth.”
12.40pm
BREAKING: The fiscal watchdog the Office for Budget Responsibility forecasts inflation falling below the 2% target in a few months’ time, Chancellor Jeremy Hunt said.
12.37pm
Mr Hunt said that because the Government is “delivering the Prime Minister’s economic priorities, we can now help families not just with temporary cost-of living-support, but with permanent cuts in taxation”.
12.36pm
Chancellor Jeremy Hunt began his Budget speech by saying he would allocate £1 million towards building a war memorial for Muslims who fought for the UK in past wars.
Mr Hunt said: “I start today by remembering the Muslims who died in two world wars in the service of freedom and democracy. We need a memorial to honour them, so following representations from the Member for Bromsgrove (Sajid Javid) and others, I have decided to allocate £1 million towards the cost of building one.
“Whatever your faith or colour or class, this country will never forget the sacrifices made for our future.”
12.34pm
Chancellor Jeremy Hunt is on his feet as he delivers his Budget speech.
12.30pm
The Conservatives have posted a picture from Cabinet this morning of Chancellor Jeremy Hunt speaking to colleagues ahead of his Budget speech.
Ready to deliver on our plan for long term growth ✅ pic.twitter.com/tP37kI6PpA
— Conservatives (@Conservatives) March 6, 2024
12.28pm
The Conservative Government is going to “keep cutting taxes for hard working Scots”, the Prime Minister told MPs at PMQs.
Speaking in the Commons, Rishi Sunak said: “(Stephen Flynn) claims to be supportive of the North Sea energy industry, why is it that he’s opposed all the measures we have taken to protect those jobs in Scotland over the past couple of years?
“He also, he talks about tax in Scotland and England, I would just gently point out to him that thanks to the actions of the Chancellor and this UK Government, everyone in Scotland has received a significant tax cut from January this year and in contrast to the Chancellor’s last budget, the SNP’s budget put taxes up for working people.
“Scotland is now the high tax capital of the UK but this Conservative Government is going to keep cutting taxes for hard working Scots.”
This came in response to Westminster SNP leader Stephen Flynn, who said: “The Conservative party want to use Scotland’s natural resources to pay for tax cuts in England, the Labour Party want to use Scotland’s natural resources to pay for nuclear power stations in England, and the cost of that up to 100,000 jobs.
“Scotland’s wealth, Scotland’s resources, Scotland’s jobs all a gain to Westminster.”
12.25pm
Has the Prime Minister let the cat out of the bag on tax cuts during PMQs?
Sunak mentions during PMQs that his party is offering tax cuts. Was that an unintended leak? #Budget2024
— Richard Murphy (@RichardJMurphy) March 6, 2024
What is the Chancellor expected to tell MPs in his Budget speech?
Chancellor Jeremy Hunt is expected to tell MPs: “Because of the progress we’ve made because we are delivering on the Prime Minister’s economic priorities we can now help families with permanent cuts in taxation.
“We do this not just to give help where it is needed in challenging times. But because Conservatives know lower tax means higher growth. And higher growth means more opportunity and more prosperity.”
He will say growth “cannot come from unlimited migration”, but “can only come by building a high-wage, high-skill economy”.
The Chancellor will claim Labour would take the country backwards, saying: “Instead of going back to square one, our plans mean more investment, more jobs, more productive public services and lower taxes, sticking to our plan in a Budget for long-term growth.”
Will the Chancellor pay for tax cuts with more austerity?
Jeremy Hunt has said he will not pay for tax cuts with borrowing, meaning a combination of spending cuts and tax rises elsewhere will be necessary.
Tax rises could include a levy on vapes, a tax raid on owners of short-term holiday lets, and the scaling back of non-dom tax relief – a policy previously advocated by Labour and opposed by ministers.
Mr Hunt could shave more off his post-election public spending plans to fund giveaways, reducing overall departmental spending – currently pencilled in to rise by 1% per year in real terms after 2025 – to 0.7%.
In a sign he could go down that path, Mr Hunt defended austerity, saying it was only because the Government “reduced the deficit” that it could “generously” help people during the pandemic.
12.01pm
Protesters are demonstrating outside the Palace of Westminster before Chancellor Jeremy Hunt delivers his Budget.
What do experts say about a 2p reduction in national insurance?
Experts have said that a 2p reduction in national insurance contributions would not by itself be enough to stop the tax burden reaching record levels by the end of this decade.
The Institute for Fiscal Studies said the measure would not prevent taxes rising to about 37% of GDP by 2028-29.
The Resolution Foundation think tank said the biggest net beneficiaries of the national insurance cut, combined with threshold freezes, are those earning £50,000, while those earning £19,000 or less will actually be worse off.
11.50am
A union boss has been critical of the Government before Chancellor Jeremy Hunt delivers his Budget.
Speaking in a video published on social media around an hour before Mr Hunt makes his speech in the Commons, Unison general secretary Christina McAnea said she expects the Budget to bring “more pain for working people, more money in the pockets of the wealthiest and more cuts to public services”.
Waiting for today’s budget but with low expectations from this government. pic.twitter.com/3xdG9OChIR
— Christina McAnea (@cmcanea) March 6, 2024
What would it mean for the average worker if the Chancellor cuts national insurance?
Jeremy Hunt looks likely to announce a cut in national insurance by a further two percentage points in his Budget, matching a cut in the autumn statement.
The change could save the average worker £450 a year, adding up to £900 when combined with last year’s move.
‘Stick to the plan’, Hunt urges the public
The Chancellor has pleaded with the UK to back him and not “throw away” the work done to repair the economy in a promotional video released by the Treasury.
We’re sticking to the plan. pic.twitter.com/kJefyMKndc
— HM Treasury (@hmtreasury) March 6, 2024
Pleading with the public to back his plan, Jeremy Hunt said: “We’ve worked so hard to get through the really challenging period that we’ve come through. Don’t throw it away.
“We can see now the economy is set for healthy growth. We’re putting more money into our public services and we’re bringing down taxes. Stick to the plan.”
Aside from possible tax cuts, what else is likely to be in the Budget?
A £360 million investment in advanced manufacturing projects across the life sciences, automotive and aerospace sectors is set to feature in the Budget as well as a package of £800 million intended to boost public sector productivity.
Mr Hunt has also announced changes to pension regulations, including a requirement for funds to declare how much they invest in UK companies, in order to “focus minds” and boost investment in British businesses.
And fuel duty is likely to remain at its current rate, keeping the “temporary” 5p cut which has been in place since 2022.
If the Chancellor cuts tax, how will he be able to afford it?
The Chancellor is bound by his self-imposed fiscal rules, which include having national debt as a share of gross domestic product (GDP) falling by the end of a five-year period. The gap between his tax and spending plans and the limits set by this rule is known as the headroom.
As well as potentially eating into this headroom – leaving less of a buffer to cope with unexpected events – Mr Hunt is likely to tinker with a few taxes to raise some extra cash. The non-dom tax status for wealthy overseas individuals could be changed or scrapped and a levy on vapes could also help fill the Treasury coffers.
But the big prize for Mr Hunt would be economic growth – as well as generating extra tax income, an increase in GDP changes the balance when it comes to calculating the headroom available for meeting his fiscal rule.
What will the Chancellor’s flagship policy be in his Budget?
The Chancellor and Prime Minister Rishi Sunak have consistently hinted at tax cuts, and with an election looming and the Conservatives a long way behind in the polls, they will be keen to offer voters as big an incentive as possible to stick with the Tories.
Reducing the basic rate of income tax by a penny would cost about £7.3 billion while a cheaper option would be a 1p reduction in the main rates of national insurance contributions paid by employees and the self-employed, at around £5 billion a year.
But there is speculation that Mr Hunt could gamble and go for an even more eye-catching cut – knocking 2p off national insurance or income tax.
11.10
Chancellor Jeremy Hunt had to knock on the door of Number 11 Downing Street to be let back in after posing for photographs for the assembled media outside his home.
11.05am
Labour leader Sir Keir Starmer has been preparing the Opposition’s Budget response with shadow chancellor Rachel Reeves.
In a post on X, he said: “Preparing our #Budget2024 response with Rachel.
“If Labour is privileged enough to deliver the next budget, my mission-driven government will make working people better off for the long term.”
Preparing our #Budget2024 response with Rachel.
— Keir Starmer (@Keir_Starmer) March 6, 2024
If Labour is privileged enough to deliver the next budget, my mission-driven government will make working people better off for the long term. pic.twitter.com/FIQzH2gnsS
11am
It was all smiles from Jeremy Hunt and his Treasury team outside 11 Downing Street as the Chancellor prepares to deliver his Budget after Prime Minister’s Questions this afternoon.
Will Hunt reduce income tax?
We won’t know until the Chancellor delivers his speech in the Commons, but Jeremy Hunt has been widely reported to have defied calls from some in Downing Street and many Conservative MPs to reduce income tax, which is more expensive but better understood by many voters.
Mr Hunt was said to have taken the decision after the fiscal watchdog the Office for Budget Responsibility downgraded the amount of fiscal headroom available for delivering tax cuts or spending commitments, within the Chancellor’s self-imposed rule of having debt falling as a share of gross domestic product (GDP) by 2029.
An income tax cut, previously promised by Prime Minister Rishi Sunak, could reportedly still feature in a fiscal event later this year or in the Conservative election manifesto.
Two former home secretaries criticised the move, with Suella Braverman saying “my preference would be 2p off the basic rate of income tax” and Dame Priti Patel calling for the unfreezing of income tax thresholds.
10.50am
Chancellor Jeremy Hunt has appeared outside 11 Downing Street with his Treasury team and held up the famous red briefcase ahead of his Budget speech later today.
Will the Chancellor scrap ‘tourism tax’?
Dame Priti Patel has asked Mr Hunt to scrap the tourism tax and reintroduce VAT-free shopping for tourists.
The former home-secretary and the Conservative Party Member for Witham said the move would “give businesses a real boost”, saying the current tax on tourism is making Britain less attractive for tourists.
Writing in the Telegraph, Dame Priti said: “Our country now needs more pro-business measures to secure future growth and with the Budget approaching the Chancellor must consider scrapping the tourism tax and reintroducing VAT-free shopping for foreign visitors.
“Our competitors in Europe have already taken advantage, with France experiencing record levels of tourism spend in 2022 and 2023 as they attract high-spending tourists.
“High-spenders and tourists from the USA, Canada, the Middle East and China are now finding Paris and other European cities a more attractive destination than London and the UK.”
Martin Lewis on what he’s looking for in the Budget
Money Saving Expert Martin Lewis has revealed what he’s looking for when the Chancellor delivers his speech.
Two #budget specifics I'm watching for (of the things he asked me to write to him about rather than wider issues)
— Martin Lewis (@MartinSLewis) March 6, 2024
-Will he change Child Benefit Higher Income charge (ie stop penalising single parent, single income & dominant income families)
-Will he ditch penalty for Lifetime…
What’s Labour saying?
Shadow chancellor Rachel Reeves says Labour is “now the party of economic responsibility” and has accused the Tories of overseeing “fourteen years of economic failure”.
She said: “The Conservatives promised to fix the nation’s roof, but instead they have smashed the windows, kicked the door in and are now burning the house down.
“Taxes are rising, prices are still going up in the shops and we have been hit by recession. Nothing the Chancellor says or does can undo the economic vandalism of the Conservatives over the past decade.”
Labour also said any reductions in the Chancellor’s Budget would be cancelled out by the Government’s continued freeze on tax thresholds, meaning more people are dragged into a higher band as their pay increases.
Today’s Budget should be the final chapter of fourteen years of Tory economic failure.
— Rachel Reeves (@RachelReevesMP) March 6, 2024
Taxes are rising, prices are going up in the shops and we have been hit by recession.
Britain is worse off under the Conservatives. Nothing Jeremy Hunt says or does today can change that.
How are house prices looking going into the Budget?
Annual growth in house prices turned positive for the first time in around a year in February, according to an index.
Across the UK, property values increased by 1.2% annually in February, following a 0.2% fall in January, Nationwide Building Society said.
It marked the first month since January 2023 that Nationwide recorded positive annual growth in house prices. In that month, there was a 1.1% year-on-year increase.
On a month-on-month basis, house prices increased by 0.7% in February, taking the average UK house price to £260,420.
A look at the key numbers, opinion polls and calendar dates before the Budget
When will the Budget be announced?
Chancellor Jeremy Hunt will be on his feet to deliver the Budget at around 12.30pm. His speech will be preceded by Prime Minister’s Questions at midday.
The Office for Budget Responsibility are expected to publish its outlook at around 1.30pm.
9.50am
Cabinet ministers are meeting before the Chancellor delivers his Budget at 12.30pm today.
Home Secretary James Cleverly, Foreign Secretary Lord Cameron and Defence Secretary Grant Shapps were among those photographed as they arrived at Downing Street.
