“Chancellor Jeremy Hunt placed a £10bn cut in national insurance at the heart of a Budget designed to chip away at Labour’s polling lead while leaving the door open for more tax reductions before an autumn election. Conservative MPs broadly welcomed what Hunt called his “responsible” Budget, but they admitted it had not delivered a knockout political punch and was unlikely to be the launch pad for a snap May election. Hunt’s Budget on Wednesday contained a 2p cut in employee national insurance rates – partly funded by a crackdown on perks enjoyed by so-called “non-doms”, who are resident in the UK but domiciled for tax purposes overseas – but he was penned in by very tight public finances. “It kept us in the game, but it’s not a game-changer,” said one former Tory minister. Another ex-minister said the party mood was flat.” – FT
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>Today:
>Yesterday:
“Jeremy Hunt announced a nearly £6bn injection into the NHS over the next five years in his Budget on Wednesday, as he set out a plan to tackle lacklustre productivity across Britain’s public sector. The chancellor said the government would add £2.5bn to the day-to-day budget of the health service in 2024-25, taking the annual total to £164.9bn. Hunt also laid out an extra £3.4bn of spending over the next five years on a new NHS productivity plan aimed principally at ramping up digitisation and automation. He told MPs the “landmark” investment in productivity would “modernise NHS IT systems so they’re as good as the best in the world”, and lead to £35bn in savings.” – FT
Comment:
>Yesterday: Ed Davies in Comment: The best tax cut Hunt could announce today? Raising work allowances in Universal Credit.
“Pensioners have been left out of the Chancellor’s round of tax cuts for a second time in six months after the Government snubbed its core voting base ahead of the General Election. Eight million pensioners who already face average tax rises of £960 as a result of the Government’s stealth freezes on tax thresholds were left empty-handed in the giveaways announced yesterday. Jeremy Hunt’s 2p cut in National Insurance will see more than 12.6million pensioners who do not pay the levy missing out on £450 of personal taxation giveaways for a second time in two months. That is despite the fact that pensioners who draw income from their private and workplace pensions are paying more tax than previous retired generations as a result of stealth taxes.” – Daily Mail
Comment:
>Yesterday: ToryDiary: Andrew Gimson’s Budget sketch: Hunt promises he will always be loyal to Prudence
“Britain will go into the next general election with taxes at their highest level since 1948 despite Jeremy Hunt’s 2p budget cut in national insurance contributions – with the threat of a fresh squeeze on public spending to come after polling day. The chancellor used a combination of higher borrowing and a range of stealth taxes to fund a £14bn giveaway package and said his ambition was to phase out NICs for employees and the self-employed altogether. But the lack of any real surprises in the budget – other than an increase in the child benefit threshold to £60,000 – appeared to reduce significantly the prospect of a snap general election in May, when the UK will still officially be in recession. Many Conservative MPs had hoped for a headline-grabbing budget that would finally leave people feeling better off and help to close the gap with Labour in the polls, acting as a launchpad for the election later this year.” – The Guardian
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>Today: John O’Connell in Comment: For taxpayers, this Budget only fiddled at the edges
“The Chancellor came under fire tonight for failing to increase defence spending at a time of heightened global instability and security threats. He was accused of being ‘incredibly shortsighted’ for refusing to earmark extra money. The Budget’s ‘Red Book’, in fact, suggests that there will be a £2.5 billion reduction in 2024-25. Tables published in the Financial Statement and Budget Report indicated routine spending on the already cash-strapped Armed Forces will shrink by £2.2 billion next year. Meanwhile, spending on major procurement projects is forecast to fall by £0.3 billion next year. The combined totals for both categories will fall from £54.2 billion in 2023/24 to £51.7billion in 2024/25 – at a time of war in Ukraine and the Middle East.” – Daily Mail
“Sir Jacob Rees-Mogg has launched a scathing attack on the Office of Budget Responsibility – as well as bemoaning what he called Jeremy Hunt’s “endless tinkering” in Wednesday’s Budget. The Tory MP for North Somerset and former Business Secretary also suggested Chancellor’s eagerly awaited financial statement was identical to the one opposite number Rachel Reeves would have delivered – with one key exception. Speaking on GB News, he suggested the UK was spending more beyond its means, arguing that Mr Hunt should have been bolder with his cuts to capital gains tax and increases in the VAT threshold… Sir Jacob said he was “very much in favour” of the VAT threshold being increased to enable small businesses to have a chance to grow.” – Daily Express
Comment:
>Yesterday:
“Britain’s migrant population will rise by 315,000 a year, experts warned last night. The claim comes despite nearly ten million people remaining out of work – many owing to stealth taxes and ill health. In yesterday’s Budget, Chancellor Jeremy Hunt said it was “morally and economically wrong” to hire foreign labour while Britons stay at home. But Tory pledges to fix the problem took a battering as long-term net migration forecasts by the Office for Budget Responsibility were revised up from 240,000 to 315,000 for every year from 2028. Last year the figure was 672,000. The new forecast would mean enough people arriving each year to fill a city the size of Doncaster. Mr Hunt yesterday said there were about 900,000 job vacancies and told those on benefits: “Those who can work should.”” – The Sun
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Comment:
“Hunt has ultimately delivered a Budget that squares with his own fiscal rules and has been validated by the OBR. Conservative MPs may be fed up with OBR, but it does add credibility to the Government and its spending plans. We learnt in the Truss premiership that it cannot be ignored. Yes, growth may be low compared with the past, but it is low across Europe. I see no reason why our growth will not speed up. It’s often forgotten that growth is the natural state of economies most of the time. Hunt is not a conjurer or a magician – he is only the Chancellor. He cannot change the political weather overnight. But he has left Labour in a difficult position and pointed the way to an election. By sticking to tight public spending plans while delivering tax cuts, Hunt was delivering a challenge.” – Daily Telegraph
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“The UK foreign secretary, David Cameron, has said he had held a “tough but necessary” conversation with Israeli war cabinet minister Benny Gantz, repeating calls for more humanitarian aid for Gaza and warning him against a fully fledged offensive in Rafah. Cameron said ensuring the availability of aid in Gaza would be a factor when the UK assesses whether Israel is acting in line with international law. Gantz, a former defence minister and domestic political rival of the Israeli prime minister, Benjamin Netanyahu, has caused a furore at home by going to both Washington and London independently to speak to their most senior figures about the future of the war. Netanyahu instructed the British embassy to afford him no help or security detail on his visits.” – The Guardian
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“Nikki Haley has officially announced she’s suspending her presidential campaign as she refuses to endorse Donald Trump. Haley confirmed the end of her White House bid on Wednesday morning during a press conference in her home state of South Carolina… The former South Carolina governor criticized the state of Congress, calling incumbents “followers, not leaders.” Haley, who was the US ambassador to the United Nations during Trump’s presidency, suffered a slew of embarrassing losses and struggled to win delegates after announcing her candidacy in February 2023. Haley lost every state but Vermont during Super Tuesday’s primary election… Haley did not endorse Trump during Wednesday’s speech but congratulated him and wished him well.” – The Sun