Political analysis
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In what is likely to be his final Budget the Chancellor Jeremy Hunt was handed an average set of economic forecasts which severely restricted his ability to cut taxes, leading to a limited Budget that is unlikely to live long in the memory as a standalone event.
In what was a moderated and cautious Budget in keeping with his steady reputation Jeremy Hunt has cut employee National Insurance by 2 per cent, in a repeat of his Autumn Statement from November 2023.
The government declined to take a reckless or ambitious approach to its pre General Election budget and instead was able to only tinker at the edges of public service reform and make modest changes to the existing tax system.
The Chancellor’s parting gift to his successor is to outline future Departmental spending plans that see spending from 2025 grow at just 1 per cent year on average in real terms, leading to potentially significant spending cuts in non-protected departments.
As economic forecasts from the Office for Budget Responsibility worsened the Budget was marked by division between 10 Downing Street and 11 Downing Street over whether a cut to income tax; inheritance tax; or stamp duty was viable or more desirable than a National Insurance cut.
With the Conservative Party trailing significantly in the polls the Chancellor has confirmed plans that Labour had to abolish the current tax regime for people known as ‘non doms’ and under the new regime anyone who has been a tax resident in the UK for more than four years will pay UK tax on their foreign income and gains.
It means that the Labour Party now has to look again at its spending plans in order to meet its fiscal rules and deliver several pledges it has already set out.
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