Chancellor Jeremy Hunt delivered his Spring Statement to the House of Commons on Wednesday. Here are the main points:
Public finances
- Office for Budget Responsibility predicts UK will avoid recession in 2023. Adds the economy will shrink by 0.2%
- Growth of 1.8% predicted for next year, with 2.5% in 2025 and 2.1% in 2026.
- Inflation rate predicted to fall to 2.9% by the end of this year, down from 10.7% in the last three months of 2022.
- Underlying debt forecast to be 92.4% of GDP this year, rising to 93.7% in 2024.
Business
- Main rate of corporation tax, paid by businesses on taxable profits above £250,000, will increase from 19% to 25%.
- Companies with profits between £50,000 and £250,000 to pay between 19% and 25% corporation tax.
- Companies able to deduct investment in new machinery and technology to lower their taxable profits.
- Tax breaks and other benefits for 12 new Investment Zones across the UK, each funded with £80m over the next five years.
- Reduced paperwork for international traders, who will also be given longer to submit customs forms under streamlined rules.
Taxation
- Cap on amount workers can accumulate in pensions savings over their lifetime before having to pay extra tax (currently £1.07m) to be abolished.
- Tax-free yearly allowance for pension pot to rise from £40,000 to £60,000.
- 55p cut to fuel duty on petrol and diesel, due to end in April, kept for another year.
- Alcohol taxes to rise in line with inflation from August, with new reliefs for beer, cider and wine sold in pubs.
- Tax on tobacco to increase by 2% above inflation, and 6% above inflation for hand-rolling tobacco.
Energy
- Government subsidies limiting typical household energy bills to £2,500 a year extended for three months until the end of June.
- £200m to bring energy charges for prepayment meters into line with prices for customers paying by direct debit.
- Commitment to invest £20bn over next two decades on low-carbon energy projects, with a focus on carbon capture and storage.
- Nuclear energy to be classed as environmentally sustainable for investment purposes, with promise of more public funding
- £63m to help leisure centres with rising swimming pool heating costs, and invest to become more energy efficient.
Labour market
- 30 hours of free childcare for working parents in England expanded to cover one and two-year-olds, in a bid to help them work more.
- Families on universal credit to receive childcare support up front instead of in arrears, with the £646-a-month per child cap raised to £951.
- £600 incentive payments for those becoming childminders, and relaxed rules in England to let childminders look after more children.
- New fitness-to-work testing regime to qualify for health-related benefits.
- Funding for up to 50,000 places on new voluntary employment scheme for disabled people, called Universal Support.
- Tougher requirements to look for work and increased job support for lead child carers on universal credit.
- More places on ‘skills boot camps’ to encourage over-50s who have left their jobs to return to the workplace.
- Immigration rules to be relaxed for five roles in construction sector, to ease labour shortages.
Other announcements
- Commitment to raise defence spending by £11bn over the next five years.
- Prison sentences for those convicted of marketing tax avoidance schemes.
- An extra £10m over next two years for charities helping to prevent suicide.
- Streamlined approvals process promised for new medical products.
- £900m for new super computer facility, to help UK’s AI industry.