TODAY’S BUDGET was announced by the Chancellor of Exchequer, Jeremy Hunt.

The Chancellor said the Office for Budget Responsibility (OBR) forecasts a return to growth next year. After a 0.2% contraction to the economy this year, growth is forecast at a rate of 1.8% in 2024; 2.5% in 2025; 2.1% in 2026 and 1.9% in 2027.

Growth Forecast

Inflation is forecast by the OBR to drop from 10.7% at end of 2022 to 2.9% by the end of 2023.

Underlying debt is forecast to rise to 93.7% in 2024-25.

After freezing fuel duty for another year, the Chancellor announced his updated Industrial Strategy structured in four ‘pillars’: enterprise, employment, education and everywhere.

Business Tax

For business, the main announcements include confirmation of the rise in Corporation Tax to 25% from April. Businesses with profits under £250,000 will pay tax on profits down to 19%, with profits under £50,000 a year staying in the 19% corporation tax bracket.

Also confirmed were 12 industrial zones that will be allowed to propose initiatives collaborating between local government and research organisations to access £80m.

Capital Investment Allowance will be applied in full immediately to all business investments, worth £9bn a year. OBR expects this measure to increase investment by 3% a year.

The Life Sciences and Creative industries receive an enhanced investment credit of 40%.

The Chancellor also pledged up to £2.5bn for a quantum computing project and a £1m ‘Manchester Prize’ for artificial intelligence research.

New medicine sign offs were promised to become swifter, while banking systems will be strengthened and the Stock Exchange made more attractive.

Barriers to Work

The removal of barriers to work were focused on with staged introduction of free childcare extended to children over nine months’ old and wraparound care to be offered by all primary schools in the next three years.

Disability benefits are being reformed to introduce a sliding scale of in-work benefits. Other unemployment benefits will be sanctioned more stringently. A ‘Returnership’ will be created to train over-50s returning to work.

The lifetime pension allowance will be abolished.

 

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