Budget 2024: Jeremy Hunt cuts National Insurance and reforms child benefit but tax burden still climbing

The Budget is already more lively than the fairly subdued PMQs, writes Ralph Blackburn from the House of Commons.

Chancellor Jeremy Hunt has said that statistics from the Office for Budget Responsibility show that inflation is forecast to fall below the 2% in a few months time.

He told MPs: “When the Prime Minister and I came into office, it was 11%. But the latest figures show it is now 4%, more than meeting our pledge to halve it last year. And today’s forecasts from the OBR show it falling below the 2% target in just a few months’ time, nearly a whole year earlier than forecast in the autumn statement.

“That did not happen by accident. Whatever the pressures and whatever the politics, a Conservative government, working with the Bank of England, will always put sound money first.”

Hunt announced that the alcohol duty will continue to be frozen until February 2025.

The Chancellor told the chamber: "In the autumn statement I froze alcohol duty until August of this year. Without any action today, it would have been due to rise by 3%.”

“So today I have decided to extend the alcohol duty freeze until February 2025. This benefits 38,000 pubs all across the UK – and on top of the £13,000 saving a typical pub will get from the 75% business rates discount I announced in the autumn. We value our hospitality industry and we are backing the great British pub.”

These will cost more than £5bn a year, and were baked into the OBR's debt forecasts. That means Hunt will need to find a lot of extra cash.

The Chancellor also announced that he will maintain the 5p cut on fuel duty and keep it frozen for another 12 months.

He told MPs: “The shadow chancellor complained about the freeze on fuel duty and Labour has opposed it at every opportunity. The Labour Mayor of London wants to punish motorists even more with his Ulez plans. But lots of families and sole traders depend on their car. If I did nothing fuel duty would increase by 13% this month.”

Hunt added that it would "save the average car driver £50 next year and bring total savings since the 5p cut was introduced to around £250".

Jeremy Hunt is now talking about growth, writes Ralph Blackburn from the House of Commons. Last year, he gave an “Autumn Statement for growth.”

Now the UK economy is in a recession for contracting for two successive quarters. Hunt says the government has “a plan for growth” - will voters believe him?

Jeremy Hunt labelled his statement a "budget for long-term growth", adding that the government was in a position to deliver "permanent tax cuts".

He told MPs: “Because of the progress we’ve made, because we are delivering the Prime Minister’s economic priorities, we can now help families not just with temporary cost-of-living support, but with permanent cuts in taxation.”

There was a bit of a battle between the Tories and Labour on the subject, as detailed by Ralph Blackburn below:

The economy is expected to grow 0.8% this year and 1.9% next year, 0.5% higher than the OBR’s autumn forecast, says the Chancellor in his Spring Statement.

Mr Hunt also told MPs: “Because we have turned the corner on inflation, we will soon turn the corner on growth.”

A new so-called 'British ISA' has been revealed, with the aim of encouraging more people to investing in UK assets.

Hunt said: “After a consultation on its implementation, I will introduce a brand new British Isa which will allow an additional £5,000 annual investment for investments in UK equity with all the tax advantages of other ISAs.

“This will be on top of the existing Isa allowances and ensure that British savers can benefit from the growth of the most promising UK businesses as well as supporting them with the capital to help them expand.”

Name-dropping actors such as Idris Elba, Orlando Bloom and Keira Knightly, the Chancellor lauded the UK film industry as he announced new support for the creative arts.

Along with £26m in funding for the National Theatre, Hunt also announced the rate of tax credit rise by 5% and a cap on visual effects costs will be removed.

He said: "We have become Europe’s largest film and TV production centre. At the current rate of expansion, we will be second only to Hollywood globally by the end of 2025."

The Chancellor said he would be guaranteeing the rates that will be paid to childcare providers to deliver the Government’s offer for children over nine months old for the next two years.

Hunt also references last Budget's announcement of 30 hours of free childcare.

This has not yet come in, and many childcare providers say this is effectively impossible as they have not had enough funding.

Hunt responds to anger from the Labour benches by saying the opposition have no plan on childcare. A quick reminder that the Tory policy effectively copied Labour's pledge from previous election campaigns.