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The Chancellor of the Exchequer, Jeremy Hunt, outlined the government’s latest plans to grow the UK economy with policies underlines as “Enterprise, Employment, Education, Everywhere”.
Opinion – somewhat disappointing, particular in regards to
Nothing real for business unless in a niche sector – No change to Corp Tax or any increase in liftetime allowance for business assest disposal
Childcare welcomed, however timing is erroneous – due to having to get infrastructure in place, I am sure if the funding was immediate providers would get that in place quicker.
Pension benefit – The benefit really is for the highly paid public sector worker who can afford to put in £60k a year
The chancellor Jeremy Hunt announced during the Spring Budget 2023, the main priorities of the government are to halve inflation, grow the economy and get debt falling.
In January 2023 the prime minister set a target to reduce inflation by 50% by the end of 2023 from the rate at the time of 11.1%, the highest in 40 years. The current expectation is for inflation to reduce to 2.9%, significantly surpassing the targeted inflation decrease.
The government are looking to grow the economy through increased employment numbers by both incentivising and enabling employment for anyone able to work. This will be achieved through increased access to childcare for parents, access to additional resources for those with disabilities to enable them to find jobs they are capable of and providing over 50s with resources to allow them to continue working rather than retiring early.
The current debt stands at £2.5 trillion which represents 98.9% of GDP. The chancellor advised that the main aim will be to reduce borrowing for day to day spending while increasing borrowing for long term investments. Borrowing is currently £24.7 billion lower than the November 2022 forecast. The aim is to bring borrowing down to 1.7% of GDP by 2027-28.
An overview of the key Spring Budget updates have been included, with full details linked below.
Due to the “Pension Trap” which has resulted in experienced doctors retiring early, the maximum pension contribution has been increased by 50% from £40,000 to £60,000 per year and the previous pension lifetime allowance of £1,073,100 has been abolished.
Originally the £2,500 energy cap guarantee was expected to increase to £3,000 from April 2023 onwards, however has been adjusted due to energy costs dropping allowing the cap to remain at £3,000 until the end of June 2023.
The government is committed to investing:
£20 billion in carbon capture technology with the aim to capture 22 million tons of carbon by 2030.
Investment in nuclear energy with the aim to have 25% of British energy be nuclear by 2050.
Nuclear energy to be reclassified as environmentally friendly and receive the same allowances as other environmentally friendly forms of energy.
Over £200 million put towards local regeneration projects in areas of need.
Over £400 million for new levelling up partnerships for 20 areas in England.
12 investment zones in the UK set around universities will be given a budget of £1 billion to promote business growth in these areas.
£8.8 billion over five years towards City Region Sustainable Transport Settlements
Research and Development tax credits for businesses which spend 40% or more of total expenditure on Research and Development. Tax credit received will be at 27% of total investment.
The Super-Deduction for capital expenditure will be removed from April 2023 onwards, however this will be replaced with full capital relief on the majority of capital expenditure.
Education and childcare
Priority for education is to allow parents better childcare to allow them to continue to work.
Minimum nursery staffing requirements to be decreased from 1 adult to 4 children to 1 adult for 5 children.
Schools to operate a wraparound care scheme to offer parents with primary aged children care before and after school ranging from 8am to 6pm.
Universal credit to allow for parents to immediately receive refund for spending on children rather than weeks in arrears. Additionally Universal Credit will be increased from £646 a month per child to £951 for one child and £1,630 for 2 children.
Parents with children under 3 will receive 30 hours a week in free childcare for up to 38 weeks a year. this is aimed to be expanded to children aged 3-4 from April 2024.
Offering a Midlife MOT for over 50s to ensure health and career guidance ahead or retirement.
People with disabilities will be able to search for employment without the risk of losing their disability benefits.
Up to £4,000 per person budget to help disabled people find suitable role and cater to their needs.
£900 million of funding towards an AI research resource
£2.5 billion commitment to 10 year quantum research in innovations program.
Tax reliefs offered for the Arts industry to reduce economic pressure.
Defence will receive an extra £5 billion in funding over the next 2 years and £2 billion a year in addition funding going forward.
Military funding expected to be at 2.5% of GDP, 0.5% above minimum requirement.
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