Jeremy Hunt’s Spring Budget, announced in the House of Commons on Wednesday afternoon, is receiving a mixed reception among Conservative MPs who fear the headline measure to cut National Insurance by 2 per cent does not go far enough.
Ahead of the budget yesterday, the chancellor faced calls from some in his party, including former home secretaries Dame Priti Patel and Suella Braverman, to cut income tax.
Instead, Hunt opted for the cheaper tax cut of reducing national insurance (NI) instead.
In doing so, Jeremy Hunt stated his intention to gradually end what he labeled as the “unfair” double taxation regime whereby working people pay both employee national insurance and income tax.
Reacting to Hunt’s budget, Suella Braverman appeared to criticise the government for “presiding over a record tax burden”.
Braverman told Sky News that the budget “lacked something vivid to tell the British people we’re on their side”, and that she has “constantly been urging the prime minister to change course and be bolder”.
Drawn on the party’s electoral prospects after the budget, she added: “There’s a new poll every day confirming my worst fears, that being that Labour is on the brink of assuming power. And that’s something that fills me with dread.”
Meanwhile, former cabinet minister Sir Jacob Rees-Mogg bemoaned what he called Jeremy Hunt’s “endless tinkering” in Wednesday’s Budget.
Speaking to GB News, the broadcaster for which he hosts a show, the former business secretary argued that Hunt should have been bolder with his cuts to capital gains tax and increases in the VAT threshold.
Sir Jacob said that “overall” the budget was constrained by the “way we now construct economic policy.”
He added: “Now, the tax burden is best applied if it’s applied sensibly and uniformly and what I don’t like about this budget is the endless tinkering: the little bit here and a little bit.
“So yes, I was pleased that capital gains tax on property, from which I may marginally benefit myself just so that you know, went down and that the Treasury and the OBR had agreed that there was a Laffer effect and that it would raise more money.
“But why not take it down to 20 percent so you only have one rate of [Capital Gains Tax]? Why carry on with this muddling?”
Spring Budget: Jeremy Hunt signals ‘long term ambition’ to scrap National Insurance
Amongst the most notable measures announced by the chancellor on Wednesday were:
- A 2% cut in employee national insurance from 10% to 8%.
- An increase in the salary threshold at which child benefit can now be obtained in full from £50,000 to £60,000 per year, with the benefit now tapering out at the higher income level of £80,000.
- Proposals to introduce excise duty on vaping products from October 2025, alongside a further increase in tobacco duty.
- An increase in Air Passenger Duty on non economy flights to reflect recent increases in inflation.
- The abolition of the furnished holiday let rental regime which previously provided tax advantages for those renting out their second properties to holiday makers.
- Alcohol duty remaining frozen.
- Fuel duty also remaining frozen with the previous 5p cut in fuel duty being extended.
- A reduction in the rate of Capital Gains Tax for those owning second properties from 28% to 24% as part of an initiative to increase transactions in the housing market and thereby increase tax revenues.
- Extending the energy profits tax by a further year to 2029 in an initiative set to raise £1.5 billion.
- The abolition of the current tax regime for non domiciles living in the United Kingdom in a move designed to raise £2.7 billion. Those moving to the UK will still though benefit from tax advantages for the first 4 years after they move to the country.
- The creation of a brand new British ISA savings regime, which will increase the savings amount that can be invested in an ISA each year by £5,000 providing those savings are invested in British assets.
Budget verdict: Jeremy Hunt’s offering will prove no election springboard
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