UK's Hunt sets out pre-election budget

UK's Hunt sets out pre-election budget

British finance minister Jeremy Hunt set out his budget statement to the House of Commons on Wednesday, seeking to revive the bleak election prospects of Prime Minister Rishi Sunak's Conservative Party.

Below are quotes on the key issues:

HUNT ON GROWTH:

"The OBR (Office for Budget Responsibility) expects the economy to grow by 0.8% this year and 1.9% next year – 0.5% higher than their autumn forecast. After that growth rises to 2%, 1.8%, and 1.7% in 2028.

HUNT ON DEBT:

"Ahead of my first Autumn Statement in 2022, the OBR forecast headline debt would rise to above 100% of GDP. Today they say it will fall in every year to just 94.3% by 2028-29.

"Underlying debt, which excludes Bank of England debt, will be 91.7% in 2024-25 according to the OBR, then 92.8%, 93.2%, 93.2% before falling to 92.9% in 2028-29, with final year headroom against debt falling of 8.9 billion pounds."

HUNT ON DEFICIT FORECASTS:

"We also meet our second fiscal rule for public sector borrowing to be below 3% of GDP three years early. Borrowing falls from 4.2% of GDP in 2023-24, to 3.1%, 2.7%, 2.3%, 1.6% and 1.2% in 2028-29. By the end of the forecast, borrowing is at its lowest level of GDP since 2001."

HUNT ON TAX:

"From April 6th, employees National Insurance will be cut by another 2p, from 10% to 8%. And self-employed national insurance will be cut from 8% to 6%. It means an additional 450 pounds a year for the average employee or 350 pounds for someone self-employed."

HUNT ON DEFENCE SPENDING:

"We are providing more military support to Ukraine than nearly any other country and our spending will rise to 2.5% (of GDP) as soon as economic conditions allow."

HUNT ON ISAS:

"I will introduce a brand new British ISA which will allow an additional 5,000 pound annual investment for investments in UK equity with all the tax advantages of other ISAs. This will be on top of the existing ISA allowances and ensure that British savers can benefit from the growth of the most promising UK businesses as well as supporting them with the capital to help them expand."

HUNT ON INFLATION:

"First inflation: the latest figures show it is now 4% - more than meeting our pledge to halve it last year. And today's forecasts from the OBR show it falling below the 2% target in just a few months' time – nearly a whole year earlier than forecast in the Autumn Statement."

HUNT ON VAPES

"To discourage non-smokers from taking up vaping, we are today confirming the introduction of an excise duty on vaping products from October 2026 and publishing a consultation on its design.

"We will introduce a one-off increase in tobacco duty at the same time to maintain the financial incentive to choose vaping over smoking."

HUNT ON FLYING TAX

"I will make a one-off adjustment to rates of Air Passenger Duty on non-economy flights only to account for high inflation in recent years.

"I will provide HMRC with the resources they need to ensure everyone pays the tax they owe leading to an increase in revenue collected of over 4.5 billion pounds across the forecast period.

HUNT ON ASTRAZENECA:

"Because of the government's support for the life sciences sector, they announce plans to invest 650 million pounds in the UK to expand their footprint on the Cambridge Biomedical Campus and fund the building of a vaccine manufacturing hub in Speke in Liverpool."

HUNT ON HOUSEHOLD SUPPORT:

"The OBR predicted real household disposable income per person would fall by 2% in the last year – instead after this support it is on track to rise by 0.8%."

HUNT ON PUBLIC SPENDING AND NHS

"I am keeping the planned growth in day to day spending at 1% in real terms. But we are going to spend it better.

"So today I am announcing a landmark Public Sector Productivity Plan that restarts public service reform and changes the Treasury’s traditional approach to public spending."

"On top of funding this longer-term transformation, we will also help the NHS meet pressures in the coming year with an additional 2.5 billion pounds.

HUNT ON ALCOHOL, FUEL DUTY:

"I have ... decided to maintain the 5p cut and freeze fuel duty for a further 12 months. This will save the average car driver 50 pounds next year and bring total savings since the 5p cut was introduced to around 250 pounds.

"Taken together with the alcohol duty freeze, this (fuel duty freeze) decision also reduces headline inflation by 0.2 percentage points in 2024-25, allowing us to make faster progress towards the Bank of England's 2% target".