All eyes are on Jeremy Hunt today as the Chancellor will deliver his Budget in the House of Commons.
The Budget is likely to be the last one before the UK goes to the polls in a general election that Prime Minister Rishi Sunak will take place at some point this year.
Mr Hunt, who has faced pressure from Tory MPs to ease the record-high tax burden, is expected to make a 2p cut to national insurance one of his central pledges.
But plenty more announcements are likely to be made. Stay with us to keep up with them as they’re announced in addition to the latest reaction and analysis.
Here’s the latest:
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.
