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

Hunt said that he wanted to support the productivity of the NHS, including supporting the long-term workforce plan.

He said: “I wanted better care for patients, better value for taxpayers and more rewarding work for its staff. Making changes on the scale we need is not cheap. The investment needed to modernise NHS IT systems so they are as good as the best in the world costs £3.4 billion.

“But it helps unlock £35 billion of savings, 10 times that amount. So in today’s Budget for long-term growth, I have decided to fund the NHS productivity plan in full.”

Hunt announces a vaping levy, a one-off increase in tobacco duty and a rise in air passenger duty on non-economy flights.

The excise duty on vapes will be introduced from October 2024.

The Chancellor has said that the controversial 'non-dom' status will be abolished.

The non-dom system allows foreign nationals avoid paying UK tax on money made overseas, with Hunt saying that a “modern, simpler and fairer residency-based system” will be introduced in its place.

Political watchers will remember the controversy over Akshata Murthy, the wife of the Prime Minister, benefiting from the system. It also marks a 180 flip for Hunt who said only last year that abolishing the system would be "wrong"

Chancellor Jeremy Hunt confirmed a highly-anticipated National Insurance cut.

The rate will be cut from 10% to 8% from April 6, with self-employed National Insurance being slashed from 8% to 6%.

Here we have the Chancellor’s rabbit out of the hat - he's reforming child benefit. This is one of the main changes that hasn't been briefed out.

This has long been seen as unfair as under the current system two parents each earning £50,000 get full child benefit, however if one parent earns £60,000 and the other is not working their child benefit gets cut. The Chancellor says this will now be calculated by household.

Having cut National Insurance by two percentage points, Hunt told MPs: “We have cut it by one third in six months without increasing borrowing and without cutting spending on public services. That means the average earner in the UK now has the lowest effective personal tax rate since 1975 – and one that is lower than in America, France, Germany or any G7 country.”

He added: "It is to unleash that people power that we have today put this country back on the path to lower taxes. A plan to grow the economy versus no plan. A plan for better public services versus no plan. A plan to make work pay versus no plan. Growth up, jobs up and taxes down. I commend this statement to the House.”

In his response to today's budget announcement, Labour leader Sir Keir Starmer has branded the statement as a "last desperate act of a party which has failed".

He accused the Conservatives of "delusion", adding: "Britain in recession - the national credit card is maxed out."

He also accused Hunt of "taking lessons on marketing from the Willy Wonka Experience in Glasgow", in a nod to the viral disaster event.

I'll start to bring you some reaction to the Budget, firstly from the IPPR think tank. Harry Quilter-Pinner, director of policy and politics, said: “Today’s slash-and-crash budget put politics before the needs of the nation. No one believes that future cuts to day-to-day spending are possible, or that squeezing public investment further is sensible, yet the government chose to slash taxes today at the expense of crashing public services tomorrow.

"With the NHS, pensions, childcare and defense spending likely to be protected, future spending plans imply big cuts across other key public services. This isn’t fiscally responsible, economically desirable nor politically popular. 

“The Chancellor has once again missed an opportunity to show that the government has a real plan to tackle the issues facing our nation. Growth remains low, people are struggling to pay the bills and our public services are crumbling.

"Yet today’s budget had few real answers to these pressing problems. We desperately need a real plan for shared economic growth, investment in our economy and net zero, and properly funded public services, supported by progressive tax reform.” 

As this was the Budget, Labour leader Sir Keir Starmer gave the opposition's response, however now the Shadow Chancellor Rachel Reeves has had her say as well.

Reeves said: “The Chancellor’s Budget has lifted the lid on 14 years of Tory economic failure. Taxes are still rising, prices are still going up in the shops, and mortgages are higher. Nothing Jeremy Hunt has said today changes that. It’s time for change. It’s time for an election."

The Social Market Foundation's director Aveek Bhattacharya said this Budget without "much to say" made the case for having one fiscal event per year. Currently there are two, the Autumn Statement and the Spring Budget.

Bhattacharya said: "Today’s Budget was a relatively low key affair, with the notable exception of the National Insurance cut. If anything, it demonstrated the case for reducing the number of annual fiscal events from two to one – having made a number of big consequential announcements in last year’s Spring Budget and Autumn Statement, and presumably wanting to keep some powder dry before the election, there didn’t seem to be very much to say.

"The two costliest announcements – cutting national insurance and freezing fuel duty – reflect questionable priorities, and the pressure such events generate to produce gimmicky ‘rabbits out of hats’ rather than that doing the responsible thing."