Jeremy Hunt’s hollow budget

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Chancellor Jeremy Hunt delivered his high-stakes budget statement to the House of Commons this afternoon. But he needn’t have really.

Over the past few days, Hunt’s headline measures had been released unto a less-than-grateful public Times-story-by-Timessplash, successfully sapping any excitement from today’s proceedings. Writing in a post on X/Twitter this morning, The Times’ political editor Steven Swinford explained: “There are some claims that Jeremy Hunt will announce an additional 1p cut in income tax today on top of the NI cut. He won’t”.

And so it has come to pass.

Hunt, hands tied by a lack of fiscal headroom, confirmed this afternoon what we already knew: the government is trimming national insurance by 2p — the second successive cut after it did the same in the autumn statement. The measure means the tax will drop from 10 per cent to 8 per cent for employees. The self-employed rate will fall from 8 per cent to 6 per cent.

Hunt declared that the changes “make our system simpler and fairer and will “grow our economy by rewarding work”. Spare a thought for former home secretary Priti Patel and those many Conservative MPs who had been lobbying Hunt to cut income tax.

Naturally, Hunt had prepared plenty of anti-Labour zingers for his budget statement. He wasted no time in telling MPs his plan will mean “more investment, more jobs, better public services, and lower taxes”. The government was delivering, he explained, a “Budget for long-term growth”, proclaiming that “none of that would be possible” if Labour implements its plan to decarbonise the economy by 2030 — five years ahead of the government’s target.

Besides the NI cut, another widely expected measure announced today was the scrapping of the so-called “non-doms” regime, whereby certain wealthy individuals are able to avoid paying tax on their foreign income. Getting rid of the tax status has been Labour policy for some time, and the party had earmarked the resultant £3 billion windfall for a variety of spending commitments. Keir Starmer’s policy wonks will need to head back to the drawing board after Hunt’s address today.

Meanwhile, following on from comments made by Peter Mandelson yesterday, Hunt made an apparent dig at Starmer’s weight. The chancellor, after discussing the government’s new levelling up proposals, asserted: “I know he has been taking advice from Lord Mandelson, who yesterday rather uncharitably said he needed to shed a few pounds”, adding: “Ordinary families will shed more than a few pounds if that lot get in”.

Budget verdict: Jeremy Hunt’s offering will prove no election springboard

Lunchtime briefing

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Hunt cuts National Insurance in a budget that was exactly as trailed

The Chancellor also pointed to the UK having now turned a corner on both growth and inflation.

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‘Rabbits’ and ‘traps’ – Jeremy Hunt set to deliver his 2nd full budget to the Commons

Labour is thought likely to commit to retain any tax cuts introduced by the Chancellor for working people.

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Latest UK Opinion Polls

In early March 2024, the Labour Party maintained a 19% poll lead over the Conservatives, an increase in 2% from late 2023.

Lunchtime soundbite

‘Crisis, what crisis? Or as the captain of the Titanic and the former prime minister herself might have said: iceberg, what iceberg?’

—  Labour leader Keir Starmer delivers his response to the budget in the House of Commons this afternoon.

Now try this

Our Cabinet League Table. On the eve of the Budget, a record eleven ministers are in negative ratings
Via ConservativeHome. (Paywall)

Rishi Sunak’s paranoid talk of “extremists” is dangerous for us all
The New Statesman’s Andrew Marr writes that fringe politicians from George Galloway to the hard right are trying make Islamism a big election issue. (Paywall)

Panicked Tories “talked down” Scottish Tory leader amid fears he was on brink of quitting over Budget
The Telegraph reports that the fury over windfall tax hike led to “heated” discussion between head of the Scottish Conservatives and Rishi Sunak. (Paywall)

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