2023 Spring Budget

Much of the detail had already been leaked by the time Chancellor Jeremy Hunt took to his feet in the Commons to deliver his first Budget. He wanted to focus on one of the Prime Minister’s key priorities – growth – in this budget.

He started by saying that the OBR (Office for Budget Responsibility) forecasts the UK will avoid a technical recession in 2023, with inflation expected to fall significantly from 10.7 % by the end of the year.

There was good news for small businesses with the Annual Investment Allowance of £1 million, which means 99 % of all businesses can deduct the full value of their investment from that year’s taxable profits.

Small and medium-sized businesses will be able to claim a credit worth £27 for every £100 they spend if they invest 40% or more of their total expenditure on Research and Development.

But the news wasn’t so good on corporation tax, which is to increase from 19% to 25% on their profits from April.

He also announced the creation of 12 new investment zones across the country including the East and West Midlands, Manchester, the North East, South and West Yorkshire, Teesside and Liverpool. There will also be at least one each in Scotland, Wales and Northern Ireland.

There were energy measures too with nuclear power to be re-classified as “environmentally sustainable”. He also announced £20 billion of support for the development of carbon capture, usage and storage.

He also confirmed the government will extend support for energy bills at current levels for a further three months.

In one of the biggest surprises he announced he would increase the pensions annual tax-free allowance from £40,000 to £60,000. He also announced he would abolish the Lifetime Allowance which currently stands at £1.07 million.

That measure is designed to get older workers (those over 50) back into work and retain those with experience, such as doctors, who may retire early due to the Lifetime Allowance.

He also promised to remove the barriers to work for parents by announcing 30 hours of free childcare for all children over nine months.

In other measures, he announced that fuel duty will be frozen and the 5 pence cut to fuel duty on petrol and diesel, which was due to end in April, will be kept for another year.

Labour Leader Keir Starmer accused the Chancellor of lacking ambition.

As ever the devil will be in the detail but this felt like a budget to keep things calm and steady rather than the radical moves we saw in Kwasi Kwarteng’s mini-budget which so spooked the markets.