Jeremy Hunt announced his Spring Budget today, with many for UK business, those looking to get back into the employment market
Here are the key points as they were announced:
UK economy to contract by 0.2% this year but avoid recession
The chancellor offers more details on the OBR forecasts.
He says the economy will actually contract this year – but will avoid a technical recession (which is two consecutive quarters of decline).
Last November at the Autumn Statement, the OBR said the UK economy would shrink by 1.4% this year and would subsequently return to growth in the following years – so a contraction of 0.2% means things are looking better than they were.
The OBR is an independent forecaster which looks at the government’s tax and spending plans before a Budget or Autumn Statement then predicts how the economy will perform.
Hunt says, due to the government’s leadership, the UK can expect a “slightly lower tax burden” compared to what the OBR predicted in its Autumn forecast.
To cheers from his own benches, and laughs from those opposite, the chancellor adds: “Other parties run out of money but a Conservative government is reducing borrowing and improving public finances.”
Free childcare to be extended for children over nine months
Government to fund more wraparound care for school-age children
Hunt says the government will fund schools and local authorities to increase supply of wraparound care so all parents of school-age children can drop their children off between 8am and 6pm.
He says the ambition is that all schools will start to offer a wraparound offer, either on their own or in partnership with other schools, by September 2026.
£1m prize for AI research
Jeremy Hunt announces there will be a prize worth £1m every year, for the next 10 years, “to the person or team that does the most ground-breaking AI research”.
Chancellor announces 12 investment zones
Hunt announces 12 new Investment Zones.
They will be spread across the West Midlands, Greater Manchester, the North East, South Yorkshire, West Yorkshire, East Midlands, Teesside and Liverpool.
There will also be at least one in each of Scotland, Wales and Northern Ireland.
Corporation tax to increase to 25%
Corporation tax for businesses is to increase from 19% to 25%, as planned.
Firms which make a profit of more than £250,000 will pay 25% tax on their profits from April.
Hunt says only 10% of companies will pay the full 25% rate.
Small businesses investment allowance increased to £1m
For smaller businesses we have increased the Annual Investment Allowance to £1m, meaning 99% of all businesses can deduct the full value of all their investment from that year’s taxable profits, Hunt says.
He says he’s also introducing “fulll expensing”, which for the next three years, with an intention to make it permanent as soon as we can responsibly do so.
He says it means that every single pound a company invests in IT equipment, plant or machinery can be deducted in full and immediately from taxable profits.
Tax boost for smaller and medium businesses
Small or medium-sized businesses will be able to claim a credit worth £27 for every £100 they spend if they spends 40% or more of their total expenditure on Research and Development, says the chancellor,
Fuel duty to remain frozen and 5p cut will stay
Fuel duty will be frozen and a 5p reduction will be maintained for a further year.
Up to £20bn of support for carbon capture
The chancellor has now turned to measures to reduce the carbon emission that contribute to climate change.
“I am allocating up to £20bn of support for the early development of carbon, capture, usage and storage, starting with projects from our East Coast to Merseyside to North Wales.
He says this will support up to 50,000 jobs, attract private sector investment and help capture 20-30 million tonnes of CO2 per year by 2030.
He also says he will extend the Climate Change Agreement scheme for two years to allow eligible businesses £60m of tax relief on energy efficiency measures.
And there’s money for potholes
Hunt says many MPs have campaigned for better local transport infrastructure, which he’s decided to act on.
He announces a second round of the city region sustainable transport settlements, allocating £8.8bn over next five-year funding period.
On top of this, to many cheers in the chamber, he says he’ll increase funding to help local communities tackle the problem of potholes. The cause will get a further £200m from next year, Hunt says.
Cash for ‘levelling up partnerships’
Hunt says the government will invest £200m in local regeneration projects around England.
He also lays out a further £161m for mayoral combined authorities and Greater London, while £400m will be available for new “levelling up partnerships” in areas like Redcar, Cleveland and Blackburn.