It’s nearly that time again when the Chancellor of the Exchequer rises to his feet to address the House of Commons to deliver the latest Budget.
This Spring announcement – set for 6 March – is earlier than typical, with a General Election looming sometime later this year, in all likelihood. The Government has to go to the polls by January 2025 at the very latest.
The news that the UK has slipped into a technical recession (two quarters of consecutive negative growth) has complicated matters for Jeremy Hunt. He will undoubtedly want to offer some kind of tax cuts to woo voters to the Conservative party, with dire opinion polling consistently putting them far behind Labour. Yet, how much wiggle room is there in the public finances, given this news on the recession?
At the Autumn Statement, some commentators had expected, judging by hints from Mr Hunt, that income tax might fall. But it was actually a 2p cut to National Insurance contributions that was the big reveal that time.
Some analysts and political pundits are expecting that the Chancellor will announce a cut to the basic rate of income tax, despite the fact that even a 1p reduction could cost £7bn, according to the Resolution Foundation.
Yet again, Inheritance Tax changes could be on the agenda. Time after time we see speculation that there will be a significant move in this area of tax policy, but it’s failed to materialise. A complete abolition of IHT would hit the coffers to the tune of £7bn, the IFS has calculated.
Another potentially eye-catching move, would be a new policy for 99% mortgages to help first time buyers and stimulate the housing market. That is on the cards, if a Financial Times report proves to be accurate.
The OBR, an independent office monitoring government spending, will publish a report on the economy’s performance later the same day.
To watch the Budget, most mainstream UK news channels will have coverage, with it being broadcast live on the Parliament website and BBC News website. The speech is likely to begin at 12:30pm and run for around an hour.
