Everything we know about the Spring Budget 2023 so far

Wednesday 15 March 2023 5:00 am

Britain’s intensifying cost of living crisis will erode Chancellor Rishi Sunak’s room for tax giveaways in the run up to the next election (Photo by Chris J Ratcliffe/Getty Images)

Tomorrow, Chancellor Jeremy Hunt will stand on the steps of No11 Downing Street – holding the famous Budget 2023 red box.

He’ll be the first Chancellor in the political turmoil of recent months to even hold on to the job long enough to reach this crucial point.

The spring statement will lay out the government’s policies on taxation and spending for the next financial year.

It follows months of financial chaos, after economic shocks sparked by Covid; the Ukraine war and energy crisis; and Liz Truss’ calamitous mini-budget.

Hunt is framed as a calm down Chancellor, with a steadying hand on the tiller of HMS UK.

But he will be set to disappoint hardliners in his own party with a steadfast refusal to cancel a planned corporation tax hike to 25 per cent, which Trussite’s claim will stifle growth ambition. 

Hunt said lower tax rates were only possible once the economy was on a sustainable path to growth. What has been confirmed?

Various elements of the often closely-veiled contents of the budget box have emerged in recent days.

We know the chancellor wants to deliver a ‘back to work’ budget which is laser-focused on getting Brits back into the workforce.

He’s eager to be seen to be supporting parents, over 50s and disabled people with barriers to employment. Changes to pension allowances, revealed Tuesday, also fall into this camp.

Measures such as upfront childcare payments for Universal Credit recipients reflect this mood, which has been prompted by the productivity crisis setting in across our economy. 

Other pre-released policies include more funding for carbon capture projects, which are set to feature in the UK’s journey to net zero, and support for veterans.

Post-Brexit customs procedures will also be set for simplification, in a move sure to appease MPs eager to champion the benefits the UK has seen from its exit from the trading bloc.

Ending the prepayment penalty on those who pay energy bills in advance via meters is also expected, while the Chancellor will clamp down on marketed tax avoidance schemes.

What is being speculated about?

No chancellor has opted against freezing fuel duty since 2011, meaning that anticipation on Hunt to do the same is pretty much nailed on.

Prime minister Rishi Sunak has also announced an additional £5bn for defence spending over the next two years, but with defence secretary Ben Wallace urging for £11bn, could there be more to come?

Childcare support has also been at the centre of a political furore in recent weeks, with pressure on the Treasury to address the issue far from over. 

City A.M. also understands the Chancellor is mulling a move to insert a price floor on the windfall tax, potentially reducing the burden on North Sea oil and gas firms.

Many will be watching the Chancellor closely for any childcare-shaped rabbits about to be pulled from his budget hat.

Finally, with scores of workers up and down the UK striking this week, and the government urged to settle new pay deals with unions, could there be something on public sector pay?

Follow all the live announcements from Wednesday’s budget and read expert reaction via CityAM.com.