Spring Budget 2024 speech as delivered by Chancellor Jeremy Hunt on 6 March 2024 (transcript of the speech, exactly as it was delivered)

 

 

 

Madam Deputy Speaker…

As we mourn the tragic loss of life in Israel and Gaza, the Prime Minister reminded us last week of the need to fight extremism and heal divisions.

So I start today by remembering the Muslims who died in two world wars in the service of freedom and democracy.

We need a memorial to honour them, so following representations from the Rt Hon Member for Bromsgrove and others, I have decided to allocate £1m towards the cost of building one.

Whatever your faith or colour or class, this country will never forget the sacrifices made for our future.

In recent times, the UK economy has dealt with a financial crisis, a pandemic and an energy shock caused by war in Europe.

Yet despite the most challenging economic headwinds in modern history, [political content removed] since 2010…

… growth has been higher than every large European economy

… unemployment has halved

… absolute poverty has gone down

… and there are 800 more people in jobs for every single day we’ve been in office.

Of course, interest rates remain high as we bring down inflation.

But because of the progress we’ve made…

…because we are delivering the Prime Minister’s economic priorities

…we can now help families not just with temporary cost of living support…

…but with permanent cuts in taxation.

We do this to give much needed help in challenging times.

[Political content removed] Lower tax means higher growth.

And higher growth means more opportunity, more prosperity and more funding for our precious public services.

But if we want that growth to lead to higher wages and higher living standards for every family in every corner of the country, it cannot come from unlimited migration.

It can only come by building a high wage, high skill economy.

Not just higher GDP but higher GDP per head.

[Political content removed by Treasury]

the policies I announce today mean…

More investment.

More jobs.

Better public services.

And lower taxes…in a Budget for Long Term Growth.

Madam Deputy Speaker, I start with the updated forecasts from the OBR, for which I thank Richard Hughes and his team.

First inflation.

When the Prime Minister and I came into office, it was 11%.

But the latest figures show it is now 4% - more than meeting our pledge to halve it last year.

And today’s forecasts from the OBR show it falling below the 2% target in just a few months’ time – nearly a whole year earlier than forecast in the Autumn Statement.

That did not happen by accident.

Whatever the pressures and whatever the politics, [political content removed] this government, working with the Bank of England, will always put sound money first.

But we understand that tackling inflation, whilst necessary, is painful.

It means higher interest rates and a period of lower growth.

So we have given the average household £3,400 in cost of living support over the last two years.

Doing so makes economic as well as moral sense.

The OBR predicted real household disposable income per person would fall by 2% in the last year – instead after this support it is on track to rise by 0.8%.

Today I take further steps to help families with cost of living pressures starting with measures to help the poorest families.

We have already abolished higher charges for electricity paid by those on pre-payment meters, increased the local housing allowance and raised benefits by double expected inflation.

Today I focus on those falling into debt.

Nearly one million households on Universal Credit take out budgeting advance loans to pay for more expensive emergencies like boiler repairs or help getting a job. To help make such loans more affordable, I have today decided to increase the repayment period for new loans from 12 months to 24 months.

For some people the best way to resolve debts is through a debt relief order. But getting one costs £90 which can deter the very people who need them the most.

So having listened carefully to representations from Citizens Advice, I today relieve pressure on around 40,000 families every year by abolishing that £90 charge completely.

Next the Household Support Fund. It was set up on a temporary basis and due to conclude at the end of this month.

Having listened carefully to representations from the Joseph Rowntree Foundation, the Trussell Trust and the Hon Members for East Ham, Colchester, Ruislip, Northwood and Pinner and Suffolk Coastal among others, I have decided that - with the battle against inflation still not over - now is not the time to stop the targeted help it offers.

We will therefore continue it at current levels for another six months.

Next, I turn to a measure that will help households and businesses more broadly.

In the Autumn Statement I froze alcohol duty until August of this year. Without any action today, it would have been due to rise by 3%.

But I have listened carefully to my RHFs for Altrincham and Sale West, the Vale of Glamorgan and my RHF from Moray who is a formidable champion of the Scottish Whisky industry. I also listened to Councillor John Tonks, a strong supporter of the wonderful Admiral pub in Ash, who pointed out the pressures facing the industry.

So today I have decided to extend the alcohol duty freeze until February 2025.

This benefits 38,000 pubs all across the UK – and on top of the £13,000 saving a typical pub will get from the 75% business rates discount I announced in the Autumn.

We value our hospitality industry and we are backing the great British pub.

Another cost that families and businesses worry about is fuel.

[Political content removed by Treasury]

Lots of families and sole traders depend on their car. If I did nothing fuel duty would increase by 13% this month.

So instead, I have listened again to my RHFs for Stoke-on-Trent North, Dudley North, Witham and others, as well as the Sun Newspaper’s “Keep it Down” campaign.

I have as a result decided to maintain the 5p cut and freeze fuel duty for a further 12 months.

This will save the average car driver £50 next year and bring total savings since the 5p cut was introduced to around £250.

Taken together with the alcohol duty freeze, this decision also reduces headline inflation by 0.2 percentage points in 2024-25 allowing us to make faster progress towards the Bank of England’s 2% target.

Madam Deputy Speaker there can be no solid growth without solid finances.

An economy based on sound money does not pass on its bills to the next generation.

When it comes to borrowing, some believe there is a trade off between compassion and fiscal responsibility.

They are wrong.

It is only because we responsibly reduced the deficit by 80% between 2010 and 2019 that we could provide £370 billion to help families and businesses in the pandemic.

[Political content removed by Treasury]

There is nothing compassionate about running out of money.

With the pandemic behind us, we must once again be responsible and build up our resilience to future shocks. That means bringing down borrowing so we can start to reduce our debt.

Today’s figures confirm that is happening.

Ahead of my first Autumn Statement in 2022, the OBR forecast headline debt would rise to above 100% of GDP.

Today they say it will fall in every year to just 94.3% by 2028-29.

Underlying debt, which excludes Bank of England debt, will be 91.7% in 2024-25 according to the OBR, then 92.8%, 93.2%, 93.2% before falling to 92.9% in 2028-29 with final year headroom against debt falling of £8.9bn.

Our underlying debt is therefore on track to fall as a share of GDP, meeting our fiscal rule.

We continue to have the second lowest level of government debt in the G7, lower than Japan, France or the United States.

We also meet our second fiscal rule for public sector borrowing to be below 3% of GDP three years early.

Borrowing falls from 4.2% of GDP in 2023-24, to 3.1%, 2.7%, 2.3%, 1.6% and 1.2% in 2028-29.

By the end of the forecast, borrowing is at its lowest level of GDP since 2001.

[Political content removed by Treasury]

Today, this [Political content removed by Treasury] government brings down taxes with borrowing broadly unchanged – in fact slightly lower than planned in the Autumn Statement.

And that is something of particular importance to one very special person. Sir Robert Stheeman is the outgoing CEO of the Debt Management Office and after 20 years of exceptional public service he is in the gallery today – thank you Sir Robert.

I now turn to growth.

Just after I became Chancellor, the OBR expected GDP to fall by 1.4% last year. In fact it grew, albeit slowly.

Now, the OBR expects the economy to grow by 0.8% this year and 1.9% next year – 0.5% higher than their autumn forecast. After that growth rises to 2%, 1.8%, and 1.7% in 2028.

Since 2010 we have grown faster than Germany, France or Italy, the three largest European economies, and according to the IMF we will continue to grow faster than all three of them in the next five years.

Surveys by Lloyds and Deloitte show business confidence is returning.

In other words, because we have turned the corner on inflation, we will soon turn the corner on growth.

Today’s OBR forecasts also show we have made good progress on the Prime Minister’s three economic priorities. Compared to when the three pledges were made…

Inflation has halved…

Debt is falling in line with our fiscal rules…

And growth is fully 1.5 percentage points higher than predicted.

But as growth returns, our plan is for economic growth not sustained through migration but one that raises wages and living standards for families.

Not just higher GDP but higher GDP per head.

And that means sticking to our plan with a Budget for Long Term Growth – more investment, more jobs, better public services and lower taxes.

I start with investment.

Economists say that stimulating investment is the most effective way to raise productivity and therefore wages and living standards.

Since 2010 we have been doing just that.

[Political content removed]

In the short period since the Autumn Statement, Nissan have announced they will build two new electric car models in the UK.

Microsoft and Google have announced data centres worth over £3 bn.

Thanks to my RHF the Business Secretary the Global Investment Summit unlocked £30 billion of investment.

In fact since 2010, greenfield foreign direct investment has been higher than anywhere else in Europe.

And for the last three years we have been the third highest in the world after the United States and China.

And we’re not stopping there.

In the Autumn Statement I announced we would introduce permanent Full Expensing, a £10bn tax cut for businesses that gives the UK the most attractive investment tax regime of any large European or G7 country.

It was welcomed by over 200 business leaders with the CBI saying it was a gamechanger and the single most transformational thing we could do to fire up the British economy.

Today I take further steps to boost investment.

Having listened to calls from the CBI, Make UK and the BCC, we will shortly publish draft legislation for full expensing to apply to leased assets, a change I intend to bring in as soon as it is affordable.

We will also help small businesses, something close to my own heart.

As well as the business rates support and work on prompt payments I announced in the autumn, I will provide £200m of funding to extend the Recovery Loan Scheme as it transitions to the Growth Guarantee Scheme, helping 11,000 SMEs access the finance they need.

And following representations from the Federation of Small Businesses as well the Hon Members for Loughborough, Southend West and Rother Valley, I will reduce the administrative and financial impact of VAT by increasing the VAT registration threshold from £85,000 to £90,000 from April 1st – the first increase in 7 years.

This will bring tens of thousands of businesses out of paying VAT altogether and encourage many more to invest and grow.

I now move to measures to address historic under-investment in our nations and regions.

Since we started levelling up in 2019, two thirds of all new salaried jobs have been created outside London and the South-East.

We have announced 13 investment zones and 12 freeports which continue to attract investment including recently, thanks to the efforts of Mayor Ben Houchen, from the Pneuma Group who are investing £15m into the Tees Valley Investment Zone.

Today working with the Levelling Up Secretary I devolve power further to local leaders who are best placed to promote growth in their areas.

I can announce the North-East trailblazer devolution deal, providing a package of support for the region potentially worth over £100m.

I will devolve powers to Buckinghamshire, Warwickshire and to the most beautiful county in England, Surrey.

[Political content removed by Treasury]

Today we will continue to spread opportunity throughout the country by…

… allocating £100m of levelling up funding to areas including High Peak, Dundee, Conwy, Erewash, Redditch and Coventry to support cultural projects in these communities, alongside support for capital projects across the country including in Bingley…

… we are expanding the long-term plan for towns to 20 new places including Darlington – home of the Treasury’s fantastic Darlington Economic Campus - Coleraine, Peterhead, Runcorn, Harlow, Eastbourne, Arbroath and Rhyl, providing each with £20m of funding to invest in community regeneration over the next decade…

… we’ll provide £15m in new funding to the West Midlands Combined Authority to support culture, heritage and investment projects on the recommendation of our go-getting Mayor Andy Street…

… and we’ll allocate £5m to renovate hundreds of local village halls across England so they can remain at the heart of their communities.

[Political content removed by Treasury]

We will also set aside funding to support the SaxaVord Spaceport in Shetland, an agri-food launchpad in Mid Wales and funding to support Northern Ireland’s businesses to expand global trade and investment opportunities.

As a result of the decisions we take today, the Scottish Government will receive nearly £300m in Barnett consequentials, with nearly £170m for the Welsh Government and £100m for the Northern Ireland Executive.

We also want to level up opportunity across the generations – including building more houses for young people.

We are on track to deliver over 1 million homes in this parliament.

Last week the Levelling Up Secretary allocated £188m to support projects in Sheffield, Blackpool and Liverpool.

And today I go further, allocating £242m of investments in Barking Riverside and Canary Wharf, which together will build nearly 8,000 houses as well as transforming Canary Wharf into a new hub for life science companies.

We are launching a new £20m Community Led Housing scheme supporting local communities to deliver the developments they want and need.

And I am pleased to announce the next steps for Cambridge to reach its potential to be the world’s leading scientific powerhouse.

I confirm there will be a long-term funding settlement for the future Development Corporation in Cambridge at the next Spending Review, with over £10m invested in the coming year to unlock delivery of crucial local transport and health infrastructure.

The final levelling up measures I announce today also support North Wales where I have many happy childhood memories.

In Mold following representations from the Hon Member for the Vale of Clwyd we will help fund the renovation of Theatr Clywd.

And I can announce that this week the government has reached agreement on a £160m deal with Hitachi to purchase the Wylfa site in Ynys Môn and the Oldbury site in South Gloucestershire.

Ynys Môn has a vital role in delivering our nuclear ambitions and no one should take more credit for today’s announcement  than my tireless, tenacious, turbo-charged hon friend for Ynys Môn.

More investment by large businesses, more support for small businesses, promoting investment in our nations and regions – all part of a Budget for Long Term Growth that sticks to our plan to deliver more jobs, better public services and lower taxes.

I now turn to one of the most powerful ways to attract investment, namely supporting our most innovative industries.

Outside the US we have the most respected universities, the biggest financial services sector and the largest tech ecosystem in Europe.

We have double the AI start ups of anywhere else in Europe.

Double the venture capital investment.

And a tech economy now double the size of Germany and three times the size of France.

We are on track to become the world’s next Silicon Valley.

In today’s Budget for Long Term Growth I take further steps to attract investment into our technology-related industries.

I want our brilliant technology entrepreneurs not just to start here but to stay here, including when the time comes for a stock market listing.

So we will build on the Edinburgh and Mansion House reforms to unlock more pension fund capital.

We will give new powers to The Pensions Regulator and Financial Conduct Authority to ensure better value from Defined Contribution schemes by judging performance on overall returns not cost.

We will make sure there are vehicles to make it easier for pension funds to invest in UK growth opportunities, so I am today publishing the names of the winners of the LIFTS competition.

But I remain concerned that other markets such as Australia generate better returns for pension savers with more effective investment strategies and more investment in high quality domestic growth stocks.

So I will introduce new requirements for DC and local government pension funds to disclose publicly their level of international and UK equity investments. I will then consider what further action should be taken if we are not on a positive trajectory towards international best practice.

I also want to create opportunities for a new generation of retail investors to engage with public markets.

So we will proceed with a retail sale for part of the government’s remaining NatWest shares this summer at the earliest opportunity, subject to supportive market conditions and value for money.

We will continue to explore how savers could be allowed to take their pension pots with them when they change job.

We will make it easier for people to save for the long term with a new British Savings Bond, delivered through National Savings and Investments, offering savers a guaranteed rate, fixed for 3 years.

And today following calls from over 200 representatives of the city and our high growth sectors I will reform the ISA system to encourage more people to invest in UK assets.

After a consultation on its implementation, I will introduce a brand new British ISA which will allow an additional £5,000 annual investment for investments in UK equity with all the tax advantages of other ISAs.

This will be on top of the existing ISA allowances and ensure that British savers can benefit from the growth of the most promising UK businesses as well as supporting them with the capital to help them expand.

I turn now to our other growth industries, starting with clean energy.

We want nuclear to provide up to a quarter of our electricity by 2050.

As part of that, I want the UK to lead the global race in developing cutting-edge nuclear technologies. I can therefore announce that Great British Nuclear will begin the next phase of the Small Modular Reactor selection process, with companies now having until June to submit their initial tender responses.

Our brilliant Energy Security and Net Zero Secretary will also allocate up to £120m more to the Green Industries Growth Accelerator to build supply chains for new technology ranging from offshore wind to carbon capture and storage.

By January of next year, as promised in the Autumn Statement, we will have a new, faster connections process to the grid up and running.

And in advanced manufacturing, we have announced a further £270 million of investment into innovative new automotive and aerospace R&D projects, building the UK’s capabilities in zero emission vehicle and clean aviation technology.

I now turn to our creative industries.

We have become Europe’s largest film and TV production centre with Idris Elba, Keira Knightley and Orlando Bloom all filming their latest productions here.

Studio space in the UK has doubled in the last three years. At the current rate of expansion, we will be second only to Hollywood globally by the end of 2025.

In the Autumn Statement, I committed to providing more tax relief for visual effects in film and high-end TV. I can today confirm we will increase the rate of tax credit by 5% and remove the 80% cap for visual effects costs in the Audio-Visual Expenditure Credit.

Having worked closely with the Culture Secretary and listened carefully to representations from companies like Pinewood, Warner Brothers and Sky Studios, we will provide eligible film studios in England with 40% relief on their gross business rates until 2034.

And having heard representations from the British Film Institute,  PACT and indeed the Prime Minister, we will introduce a new tax credit for UK independent films with a budget of less than £15m.

For our creative industries more broadly, we will provide £26m of funding to our pre-eminent theatre, the National Theatre, to upgrade its stages.

And today I particularly want to recognise the contribution to our creative industries and tourism made by orchestras, museums, galleries and theatres.

In the pandemic we introduced higher 45% and 50% levels of tax relief which were due to end in March 2025. It has been a lifeline for performing arts across the country.

Today in recognition of their vital importance to our national life, I can announce I am making those tax reliefs permanent at 45% for touring and orchestral productions and 40% for non-touring productions.

Lord Lloyd Webber says this will be a once in a generation transformational change that will ensure Britain remains the global capital of creativity.

[Political content removed]

I also want to mention our life sciences sector where we will support research by medical charities into diseases such as dementia, cancer and epilepsy with an additional £45m including £3m for Cancer Research UK.

But I have long believed we should be manufacturing medicines as well as developing them.

So I can today announce a brand new investment by one of our greatest life science companies Astrazeneca, led by mon ami, the irrepressible Sir Pascal Soriot.

AstraZeneca made their Covid vaccine available to developing countries at cost – as a result saving over six million lives.

Today because of the government’s support for the life sciences sector, they announce plans to invest £650m in the UK to expand their footprint on the Cambridge Biomedical Campus and fund the building of a vaccine manufacturing hub in Speke in Liverpool.

More investment and better jobs in every corner of the country in a long- term Budget for Growth [political content removed]

One of the biggest barriers to investment is businesses not being able to hire the staff they need.

The economy today has around 900,000 vacancies. It would be easy to fill them with higher migration – but with over 10 million adults of working age who are not in work that would be economically and morally wrong.

Those who can work should.

This is an issue I have tackled in every Budget and Autumn Statement I have delivered.

A year ago I abolished the pensions lifetime allowance which pushed doctors and others to take early retirement.

[Political content removed by Treasury]

In the Autumn, with the help of our superb Work and Pensions Secretary, we announced the Back to Work plan which will support one million adults with medical conditions and reduce the number of people assessed as not needing to look for work by two thirds.

A year ago I also announced the biggest ever expansion of childcare, extending the 30-hour free childcare offer to all children of working parents from 9 months.

This will mean an extra 60,000 parents enter the workforce in the next four years – a tremendous achievement for the Education Secretary.

Today, in order to support the childcare sector make the new investments it now needs, I am guaranteeing the rates that will be paid to childcare providers to deliver our landmark offer for children over 9 months old for the next two years.

More people in work and more jobs, sticking to our plan in a long-term Budget for Growth.

I now turn to public services.

Good public services need a strong economy to pay for them.

But a strong economy also needs good public services.

In 2010 schools in the UK were behind Germany, France and Sweden in the OECD’s PISA education rankings for reading and maths. Now, [political content removed] we are ahead of them.

Burglaries and violent crime have halved over the last 14 years and we invested in 20,000 more police officers.

Our armed forces remain the most professional and best funded in Europe with defence spending already more than 2% of GDP.

We are providing more military support to Ukraine than nearly any other country and our spending will rise to 2.5% as soon as economic conditions allow.

The NHS is still recovering from the pandemic, with [Political content removed] 250 more doctors and 400 more nurses for every month we’ve been in office.

Resources matter, of course, which is why, despite all the economic shocks we have faced, overall spending on public services has gone up since 2010 – in the case of the NHS by over a third in real terms.

But although spending has continued to rise every year, public sector productivity remains below pre-pandemic levels – by nearly 6%.

This demonstrates that the way to improve public services is not always more money or more people – we also need to run them more efficiently.

We need a more productive state not a bigger state.

In Autumn 2022, I set day to day spending to increase by 1% a year in real terms over the next parliament.

Some say that’s not enough and we should raise spending by more.

Others say it’s too much and we should cut it to improve efficiency.

Neither are right.

It’s not fair to ask taxpayers to pay for more when public service productivity has fallen.

Nor would it be wise to reduce that funding given the pressures that public services face.

So I am keeping the planned growth in day to day spending at 1% in real terms.

But we are going to spend it better.

So today I am announcing a landmark Public Sector Productivity Plan that restarts public service reform and changes the Treasury’s traditional approach to public spending.

I start with our biggest and most important public service: the NHS.

One of my greatest privileges was to be Health Secretary. Thanks to the NHS I have three gorgeous children, the oldest of whom has been patiently listening in the gallery.

The NHS is, rightly, the biggest reason most of us are proud to be British. But the systems that support its staff are often antiquated.

Doctors, nurses and ward staff spend hours every day filling out forms when they could be looking after patients.

When patients don’t show up or one member of a team is ill, operating theatres are left empty despite long waiting lists.

When we published the NHS Long Term Workforce Plan, I asked the NHS to put together a plan to transform its efficiency and productivity. I wanted better care for patients, more job satisfaction for staff and better value for taxpayers.

Making changes on the scale we need is not cheap. The investment needed to modernise NHS IT systems so they are as good as the best in the world costs £3.4bn.

But it helps unlock £35bn of savings, ten times that amount.

So in today’s Budget for long-term growth, I have decided to fund the NHS productivity plan in full.

We will slash the 13 million hours lost by doctors and nurses every year to outdated IT systems.

We will use AI to cut down and potentially cut in half form filling by doctors.

We will digitise operating theatre processes allowing the same number of consultants to do an extra 200,000 operations a year.

We will fund improvements to help doctors read MRI and CT scans more accurately and quickly, speeding up results for 130,000 patients every year and saving thousands of lives – something I know would have delighted my brother Charlie who I recently lost to cancer.

We will improve the NHS app so that it can be used to confirm and modify all appointments, reducing up to half a million missed appointments annually and improving patient choice.

We will set up a new NHS staff app to make it easier to roster electronically and end the use of expensive off-framework agencies.

And as a result of this funding, all hospitals will use electronic patient records, making the NHS the largest digitally integrated healthcare system in the world.

Today’s announcement doubles the amount the NHS is investing on digital transformation over three years.

On top of this longer-term transformation, we will also help the NHS meet pressures in the coming year with an additional £2.5 bn.

This will allow the NHS to continue its focus on reducing waiting times and brings the total increase in NHS funding since the start of the parliament to 13% in real terms.

The NHS was there for us in the pandemic.

And today with nearly £6 billion of additional funding this government is there for the NHS.

The Head of the NHS Amanda Pritchard today says that this investment shows the government continues to back the NHS.

She says that, as a result of it, the NHS can commit to delivering 1.9% annual labour productivity growth over the next parliament, more than double the average productivity growth in public services between 2010 and 2019.

But today is not just about the NHS.

I want today’s groundbreaking agreement with the NHS to be a model for all our public services.

Across education, the police, the courts and local government I want to see more efficient, better value and higher quality public services.

So today I can announce that in the next Spending Review, the Treasury will do things differently.

We will prioritise proposals that deliver annual savings within five years equivalent to the total cost of the investment required.

And today we have already identified some excellent proposals.

Violence Reduction Units and hot spot policing have prevented an estimated 136,000 knife crimes and other violent offences as well as over 3,000 hospital admissions. [Political content removed]. Every crime costs money - so we will provide £75m to roll that model out in England and Wales.

Police officers waste around 8 hours a week on unnecessary admin – with higher productivity, we could free up time equivalent to 20,000 officers over a year.

So we will spend £230m rolling out time and money saving technology which speeds up police response time by allowing people to report crimes by video call and where appropriate use drones as first responders.

Too many legal cases, particularly in family law, should never go to court and it would cost us less if they didn’t. So we will spend £170m to fund non-court resolution, reduce reoffending and digitise the court process.

Too many children in care end up being looked after by unregistered providers that are much more expensive, so we will invest £165m over the next four years to reduce that cost by increasing the capacity of the children’s homes estate.

Special educational need provision can be excellent when outsourced to independent sector schools but also expensive, so we will invest £105m over the next four years to build 15 new special free schools to create additional high-quality places and increase choice for parents.

And we will also put in place a plan to realise the tens of billions of savings recommended in an excellent speech by the Head of the National Audit Office.

The OBR say a 5% increase in public sector productivity would be the equivalent of around £20 billion in extra funding. With these plans we can deliver that – and more.

And if we ensure they are cash-releasing savings, as we are committed to doing, it will be possible to live with more constrained spending growth without cutting services valued by the public.

So with the energy and drive of my talented Chief Secretary to the Treasury we launch our Public Sector Productivity Plan in today’s Budget for Long Term Growth.

More investment, more jobs, better public services and one more thing…

…lower taxes.

[Political content removed by Treasury]

We believe that in a free society the money you earn doesn’t belong to the government.

It belongs to you.

And if we want to encourage hard work, we should let people keep as much of their own money as possible.

We look around the world at economies in North America and Asia and notice that countries with lower taxes generally have higher growth.

Economists argue about cause and correlation. But we know that lower taxed economies have more energy, more dynamism and more innovation.

We know that is Britain’s future too.

Making our system simpler and fairer

Before I explain how, I start with some measures to make our tax system simpler and fairer.

To discourage non-smokers from taking up vaping, we are today confirming the introduction of an excise duty on vaping products from October 2026 and publishing a consultation on its design.

Because vapes can also play a positive role in helping people quit smoking, we will introduce a one-off increase in tobacco duty at the same time to maintain the financial incentive to choose vaping over smoking.

I will make a one-off adjustment to rates of Air Passenger Duty on non-economy flights only to account for high inflation in recent years.

And I will provide HMRC with the resources they need to ensure everyone pays the tax they owe leading to an increase in revenue collected of over £4.5bn across the forecast period.

Next, I turn to property taxation.

In recent months, following tenacious representation from the Hon Members for St Austell and Newquay, North Devon, Cities of London and Westminster, Torbay and Truro and Falmouth, I have been looking closely at our Furnished Holiday Lettings tax regime.

I am concerned that this tax regime is creating a distortion meaning that there are not enough properties available for long term rental by local people.

So to make the tax system work better for local communities, I am going to abolish the Furnished Holiday Lettings regime.

I have also been looking at the stamp duty relief for people who purchase more than one dwelling in a single transaction, known as Multiple Dwellings Relief.

[Political content removed by Treasury]

However, an external evaluation found no strong evidence that it had done so and that it was being regularly abused.

So I am going to abolish it.

Finally, as part of this Budget, both the Treasury and the OBR have looked at the costs associated with our current levels of Capital Gains Tax on property.

They have concluded that if we reduced the higher 28% rate that exists for residential property, we would in fact increase revenues because there would be more transactions.

Perhaps for the first time in history both the Treasury and the OBR have discovered their inner Laffer Curve.

So today I am going to reduce the higher rate of property Capital Gains Tax from 28% to 24%.

[Political content removed by Treasury]

I now turn to oil and gas.[Political content removed by Treasury]

We want to encourage investment in the North Sea so we will retain generous investment allowances for the sector.

We will also legislate in the Finance Bill to abolish the Energy Profits Levy should market prices fall to their historic norm for a sustained period of time, after representations from the Hon Member for Banff and Buchan.

But because the increase in energy prices caused by the Ukraine war is expected to last longer, so too will the sector’s windfall profits.

So I will extend the sunset on the Energy Profits Levy for an additional year to 2029 raising £1.5 bn.

Next, I turn to the taxes paid by those who are resident in the UK but not domiciled here for tax purposes – a category of people known as “non-doms.”

[Political content removed by Treasury]

I  have always believed that provided we protect the UK’s attractiveness to international investors, those with the broadest shoulders should pay their fair share.

After looking at the issue over many months, I have concluded that we can indeed introduce a system which is both fairer and remains competitive with other countries.

So the Government will abolish the current tax system for non-doms, get rid of the outdated concept of domicile and the remittance basis in the tax system, and replace it with a modern, simpler and fairer residency-based system.

From April 2025, new arrivals to the UK will not be required to pay any tax on foreign income and gains for their first four years of UK residency, a more generous regime than at present and one of the most attractive offers in Europe.

But after four years, those who continue to live in the UK will pay the same tax as other UK residents.

Recognising the contribution many of these individuals to our economy, we will put in place transitional arrangements for those benefitting from the current regime.

That will include a two-year period in which individuals will be encouraged to bring wealth earned overseas to the UK where it can be spent and invested here – a measure that will attract onshore an additional £15 billion of foreign income and generate more than £1 bn of extra tax.

Overall abolishing non-dom status will raise £2.7 billion a year by the end of the forecast period.

[Political content removed by Treasury]

We use that revenue to help cut taxes on working families.

Many of those families Madam Deputy Speaker depend on Child Benefit.

But the way we treat Child Benefit in the tax system is confusing and unfair.

It’s a lifeline for many parents because it helps with the additional costs associated with having children.

And when it works, it’s good for children, it’s good for parents, and it’s good for the economy because it helps people into work.

But we currently withdraw Child Benefit when one parent earns over £50,000 a year.

That means two parents earning £49,000 a year receive the benefit in full but a household earning a lot less than that does not if just one parent earns over £50,000.

Today I set out plans to end that unfairness. Doing so requires significant reform to the tax system including allowing HMRC to collect household level information.

We will therefore consult on moving the High-Income Child Benefit Charge to a household-based system to be introduced by April 2026.

But because that is not a quick fix, I make two changes today to make the current system fairer.

Following representations from my Hon Friends from Penistone and Stocksbridge, Carshalton and Wallington, Bassetlaw and West Worcestershire – along with many others – I confirm that from this April the High-Income Child Benefit Charge threshold will be raised from £50,000 to £60,000.

And we will raise the top of the taper at which it is withdrawn to £80,000.

That means no one earning under £60,000 will pay the charge, taking 170,000 families out of paying it altogether.

And because of the higher taper and threshold, nearly half a million families with children will save an average of around £1300 next year.

According to the OBR, this change will see an increase in hours among those already working equivalent to around 10,000 more people entering the workforce.

More investment. More jobs. Better public services and lower tax.

But Madam Deputy Speaker, there is a further set of changes I want to make today.

The way we tax people’s income is particularly unfair.

If you get your income from having a job, you pay two types of tax – National Insurance Contributions and Income Tax.

If you get it from other sources you only pay one. This double taxation of work is unfair.

The result is a complicated system that penalises work instead of encouraging it.

If we are to build a high wage, high skill economy not dependent on migration…

If we want to encourage people not in work to come back to work…

We need a simpler, fairer tax system that makes work pay.

That’s why I cut National Insurance contributions in the Autumn.

By reducing the penalty on work, the OBR said that tax cut would lead to the equivalent of 94,000 more people in work.

In other words, it would fill more than one in 10 vacancies throughout the economy.

Lower taxes. More jobs. Higher growth.

Today, because of the progress we have made bringing down inflation….

Because of the additional investment that is now flowing into the economy….

Because we have a plan for better and more efficient public services….

And because we have asked those with the broadest shoulders to pay a bit more, I go further.

From April 6th, employees National Insurance will be cut by another 2p, from 10% to 8%.

And self-employed national insurance will be cut from 8% to 6%.

It means an additional £450 a year for the average employee or £350 for someone self-employed.

When combined with the autumn reductions, it means 27 million employees will get an average tax cut of £900 a year and 2 million self-employed will get a tax cut averaging £650.

Changes that make our system simpler and fairer.

And changes that grow our economy by rewarding work.

The OBR say, when combined with the autumn reduction, our national insurance cuts will mean the equivalent of 200,000 more people in work – filling one in five vacancies and adding 0.4% to GDP and 0.4% to GDP per head.

This is the second fiscal event where we have reduced employee and self-employed national insurance.

We have cut it by one third in six months without increasing borrowing and without cutting spending on public services.

That means the average earner in the UK now has the lowest effective personal tax rate since 1975 – and one that is lower than in America, France, Germany or any G7 country.

[Political content removed by Treasury]

Making work pay is of the most fundamental importance.

Because we believe that the double taxation of work is unfair.

Our long -term ambition is to end this unfairness.

When it is responsible, when it can be achieved without increasing borrowing and when it can be delivered without compromising high quality public services, we will continue to cut National Insurance as we have done today so we truly make work pay.

Madam Deputy Speaker we stick to our plan with a Budget for Long Term Growth.

It delivers…

More investment.

More jobs.

Better public services.

And lower taxes.

But 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.

A plan to grow the economy [Political content removed].

A plan for better public services [Political content removed].

A plan to make work pay [Political content removed].

Growth up, jobs up and taxes down.

I commend this Statement to the House.

Published 6 March 2024

• Editor's Note: Please note that with an election on the way the Treasury has opted to remove comments by the Chancellor deemed to be overtly political.

---