This afternoon Jeremy Hunt delivered his second Budget as Chancellor. Much of his speech had been trailed over the previous days. The headline measure is a 2p cut in National Insurance, rather than the more expensive mooted cut to income tax. This will benefit 27 million workers from April: when combined with the previous cut to national insurance in the autumn statement, it is a cut worth £900 to the average earner. Labour will counter that it is just another example of the Tories giving with one hand but taking ‘even more with the other.’ Hunt’s other major tax change was the abolition of the non-doms scheme which could force Labour to rethink its spending plans.

This Budget contained few ‘rabbits’ but the most surprising measure on spending was Hunt’s announcement that the cut-off rate for child benefit will rise £50,000 to £80,000. He plans to move the high income child benefit charge to a household based system in 2026. This is to address the anomaly which means two parents earning £49,000 each receive the full child benefit but a household with a single earner on £50,000 or more does not. As a stop-gap, the threshold to start earning paying back child benefit will increase from £50,000 to £60,000. Child benefit will no longer need to be repaid in full until earnings exceed £80,000, a move welcomed by campaigner Martin Lewis among others.

Other announcements in today’s Budget include the following:

• Personal taxes: tobacco duty has been hiked to ensure smoking alternatives remain cheaper than nicotine. Alcohol duty is frozen and the 5p cut in fuel duty extended. Tax perks for holiday let owners have been scrapped.
• Business taxes: the windfall tax on the profits of oil and gas companies has been extended until 2029. Capital gains tax is reduced for the higher rate of property from 28 per cent to 24 per cent. The VAT threshold for small businesses was increased, from £85,000 to £90,000. Film studios will get 40 per cent relief on their business rates for the next decade and new tax credits are to be introduced for low-budget independent films. Following the introduction of ‘full expensing’ in November, firms will be able to claim tax relief for leased assets as well.
• Spending: The Household Support Fund has been extended for six months. An extra £2.5 bn has been given to the NHS alongside a £3.4bn upgrade of NHS computer systems. Construction of nearly 8,000 homes will be supported by £242m of investment in Barking Riverside and Canary Wharf. An extra £120 million will be spent on building supply chains for new green technologies, ranging from offshore wind to carbon capture and storage. A further £200m will be provided to the post-pandemic Recovery Loan Scheme to provide small businesses with loans.
• Other: A new £5,0000 British ISA has been unveiled encourage more people to invest in UK assets. A ‘North-East trailblazer devolution deal’ worth £100m was unveiled alongside plans to devolve more powers to Buckinghamshire, Warwickshire and Surrey. Great British Nuclear will soon begin the next phase of the small modular reactor selection process.