Jeremy Hunt will present his Spring Budget on 15th March 2023, marking his second fiscal statement since becoming chancellor.
Experts believe the focus of the Spring Budget will be on how the government plans to get the economy growing faster – one of prime minister Rishi Sunak’s five priorities – and that short-term tax cuts are unlikely, as this could fuel inflation.
“The International Monetary Fund showed its support for the government’s fiscal prudence in the Autumn Statement in stark contrast to the fiscal fiasco around the mini-Budget in September,” said Victoria Scholar, head of investment at the investment platform interactive investor.
“This suggests the Treasury is unlikely to pull any rabbits out of the hat at the Spring Budget on 15 March with chancellor Jeremy Hunt expected to stick to tax increases rather than cuts as taming inflation remains an ongoing priority.”
In January, the Chancellor reiterated the importance of employment and tackling economic inactivity, helping more people into work and filling the vacancies in the jobs market. He also outlined ambitions to help more disabled people and those with mental illnesses into work, and a pensions system that encourages continued workforce participation.
These could all be themes in the chancellor’s Spring Budget. There is also speculation that it could contain a few sweeteners like extending the fuel duty cut, as well as some less welcome announcements such as speeding up the state pension age rise to 68.
Additionally, the latest figures from the Office for National Statistics showed the government saw a surprise £5.4bn surplus in its finances in January, thanks to the highest amount of self-assessment income tax receipts since records began in 1999.
“The army of self-employed poured in much more tax than expected into HMRC coffers in January, giving the government a surplus in its finances despite the splurge in spending to help households and businesses with energy bills,” says Susannah Streeter, head of money and markets at Hargreaves Lansdown.
The boost was due to an increase in Income Tax and National Insurance payments, which reached £368.5bn between April 2022 and January 2023, up £44.9bn from the year before.
Inheritance tax also boosted the government’s finances, with IHT receipts climbing to £5.9bn between April 2022 and January 2023, a £900m increase from the same period a year before.
“This will give UK Finance Minister, Chancellor Jeremy Hunt more potential room for manoeuvre as he plans the budget next month, although the expectation still remains that he’ll hold off any bumper giveaways until closer to an election, particularly as he seems so glued to debt reduction plans”.
We will watch with interest on Wednesday 15th March, for the actual announcement, and then digest the details, and work out what this will mean for us all.