2023 Spring Budget

What Happened in the 2023 Spring Budget Announcement?

The 2023 Spring Budget recently unveiled by Chancellor Jeremy Hunt brings forth various initiatives and proposals aimed at supporting UK citizens and businesses while maintaining economic stability. Hunt stated that the UK would avoid a technical recession this year, and inflation in Britain will tumble to just 2.9 per cent.  This article examines key aspects of the budget and their potential implications for the UK economy and public services.

Energy Support Measures

As energy costs continue to rise, the government has extended support for energy bills, leading to increased borrowing. The energy bill for a typical household stands at £2,500 a year, and the Chancellor has decided to maintain the Energy Price Guarantee at current levels for three more months. Opposition parties and campaigners argue that low wholesale energy prices have reduced the cost of offering support, benefiting direct debit customers in the process.

In addition, households on benefits and receiving state pension will get a payment boost next month with the uprating of benefits set to go ahead in April 2023.

Childcare Assistance

Families receiving universal credit will benefit from increased childcare funding provided upfront instead of requiring reimbursement claims. The cap on assistance for universal credit claimants may also rise significantly. However, Chancellor Hunt has decided against extending childcare support for families not on universal credit, sparking debate on the fairness of this decision. To further support working parents, the Chancellor has promised 30 hours of free childcare per week in England for every child over 9 months old - as long as both parents are working 16 hours a week.

Pension Allowance & Age Adjustments

The 2023 Spring Budget indicates a potential increase in the tax-free pension allowance, rising from £40,000 to £60,000. This change would benefit pensioners significantly. Additionally, the state pension age is expected to rise from 66 to 68 in the mid-2030s. This change aims to address worker shortages by encouraging longer working careers.

Support for Business Groups

To stimulate economic growth, the government plans to create 12 investment zones in England, with each receiving £80 million in funding and generous tax incentives. A new tax break regime will be introduced for businesses, encouraging investment and offsetting the upcoming corporation tax increase from 19% to 25% effective April 1. 

Fuel Prices and Duties

To ease the burden on drivers, the government will maintain the 5p fuel cut for 12 more months and freeze fuel duty for the 13th year in a row. This measure will save the average driver around £100 next year and approximately £200 since the 5p cut was first introduced.

Other Announcents

• Defence spending will also see a significant boost, with a £5 billion increase over the next two years and an £11 billion allocation over the next five years.
• Moreover, the Chancellor intends to reduce the duty levied on draught pints in pubs throughout the UK by 11p, commencing in August.
• Local authorities will be granted £200 million to address pothole issues, a significant victory for drivers.

The Future of the UK's Economic Landscape

The 2023 Spring Budget introduces several key initiatives aimed at supporting UK citizens and businesses while maintaining a stable economy. From energy support and childcare assistance to pension adjustments and fuel price measures, the budget seeks to balance fiscal responsibility with social welfare.