Chancellor Hunt's Pre-Election Budget Highlights

Chancellor Jeremy Hunt has given away some tax cuts in what is expected to be the last Budget before a General Election later in the year.

In an hour-long speech to MPs, his forecasts and policy announcements were wrapped in barbed political polemic rubbishing Labour for having no economic plan if they were to win power.

He particularly targeted Angela Rayner, Labour’s deputy leader on the front bench, for her recent, much-publicised misunderstanding of capital gains tax rules.

Despite constant interruptions from opposition MPs, Hunt unpacked his Budget for Long Term Growth before Parliament.

Hunt says his Budget delivers lower taxes, more investment and better public services while increasing growth and meeting his self-imposed fiscal rules.

Keeping to the rules

The rules say he must keep debt as a percentage of GDP below the debt figure in the final year of a five-year forecast from the Office of Budget Responsibility, and borrowing must be at most 3 per cent of GDP over five years.

The Chancellor told the house that the economy was turning a corner, with inflation expected to fall to target next quarter, wages consistently rising faster than prices, and better growth than European rivals France, Germany, and Italy.

The full speech is here.

The key points

The measures Hunt announced included:

• Alcohol duty is frozen until February 2025
• Fuel duty is frozen until March 2025
• A new duty on vapes from October 2026
• Tobacco duty will increase by £2 per 100 cigarettes or 50 grams of tobacco. From October 2026, the average price of 20 cigarettes will be £16.
• National Insurance cut—From April 6, the rate for Employees paid between £12,571 and £50,270 a year will fall to 8% on earnings and 2% on earnings above that.
• The child benefit salary cap at which one parent loses money rises to £60,000 and tapers to zero at £80,000
• Nom-Dom status was abolished to be replaced with a new residency process from April 2025, giving non-resident investors four years tax-free in the UK but then reverting to pay the same as UK residents.
• Furnished holiday let tax relief abolished from April 2025 with short-term lets reverting to the same tax treatment as buy-to-lets from April 6, 2025
• Multiple Dwelling stamp duty relief scrapped with transition relief for transactions awaiting completion by June 1
• 28 per cent property capital gains tax rate slashed to 24% from April 6, 2024.
• VAT threshold raised to £90,000 a year turnover before businesses must register
• A new UK ISA to channel more investment into stocks and shares with a £5,000 tax-free allowance on top of other ISA allowances
• British Savings Bonds - A new deal from April 2024 offering a guaranteed three-year fixed rate
• A public sale of the government’s remaining shares in NatWest Bank in the summer to retail investors

Labour’s reply

The Chancellor finished his speech with a rallying cry to voters: “Dynamism in an economy doesn’t come from ministers in Whitehall. It comes from the grit and determination of people who take risks, work hard and innovate.

“Not government policies but people power. It is to unleash that people power that we have today put this country back on the path to lower taxes.”

“Britain in recession. The national credit card – maxed out. Despite the measures today, it has been Labour leader Sir Keir Starmer responded, arguing that the Tories had run out of ideas after 14 years in power and calling for a change of government.

“There we have it. The last desperate act of a party that has failed,” he said.

the highest tax burden for 70 years. The first Parliament since records began to see living standards fall.”