"Proving the Doubters Wrong": Round-up of the Spring Budget 2023
In his Spring Budget, Chancellor Jeremy Hunt told the UK that, having defied recent projections of a decline, the economy is now primed for recovery and growth. The statement revolved around the continuation of existing cost-of-living support whilst simultaneously introducing a range of measures to boost economic growth, with a particular focus on bolstering productivity within the labour force.
Cost of Living Support
With inflation still near the double-digit mark and energy bill support originally set to end in April, the Chancellor took a number of steps to protect those hardest hit by the current economic climate:
- The Energy Price Guarantee will remain at the current level of £2,500 until the end of June, saving the typical household £160.
- Those on pre-payment metres will see premiums brought in line with comparable direct debit charges, saving the average household an average of £45 a year.
- A new £63 million swimming pool fund will be used to help support community leisure centres to remain open and accessible.
- The alcohol duty paid on draft beer has been frozen as part of a new ‘Brexit Pubs Guarantee’
- Fuel Duty for motorists will be frozen for a further 12 months.
- There will be a new £11.5 million support package to aid Ukrainians currently residing in the UK.
- An additional £33 million is being provided to support UK Veterans.
Growing the Economy
According to the Office of Budget Responsibility, inflation is predicted to more than halve and reduce to 2.9% by the end of the year.
Drawing on the UK’s recent defiance of recession projections, the Chancellor also introduced a number of measures intended to boost economic growth.
- Twelve new investment zones will be introduced around the UK, with Canary Wharf acting as an archetype of a leading investment zone.
- £8.8 billion will be provided for local transport funding as round two of the City Region Sustainable Transport Settlement project.
- £200 million in funds will be set aside to fix potholes to further improve the UK’s road networks
- A further £1 billion has been allocated to Hunt’s ‘Levelling-Up’ fund for local communities as well as £400 million committed to regional economic partnerships and the identification of barriers to business growth.
- Businesses which invest in the UK will receive tax relief on their plant and machinery spend saving 25p on every £1 spent.
- SME’s will receive £27 back on every £100 they spend on research and development.
- Tax relief worth between 45% - 50% will be frozen in place until 2025 to help the UK’s cultural industry.
- A £20 billion fund will be made available to companies working on carbon-capture technology.
- ‘Great British Nuclear’ will be launched to support investment into nuclear power and the development of small modular reactors.
- There will be a new Universal Support Scheme intended to help those suffering from long-term disabilities return to work.
- Qualified care-givers will see their tax-free allowance rise from £10,000 to £18,000 to support foster care.
- Parents with children aged nine months to four years old will receive 30 hours of free childcare a week as the Chancellor looks to help new mothers back into the workplace.
- The lifetime allowance on pensions, previously set at £1,070,000 has been abolished.
- And the annual allowance on pensions will rise from £40,000 to £60,000.
The full 122-page Spring Budget can be viewed in its entirety here.
To learn more about what this could mean for your business check out:
The British Chamber of Commerce’s reaction