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“Austerity has returned”: The expert verdict on Jeremy Hunt’s Budget

Reactions to the Chancellor’s plans for the economy.

By Spotlight

Today, the Chancellor delivered his Spring Budget, laying out the government’s plans for taxes and public spending over the next financial year. The measures included the highly anticipated scrapping of the non-domicile tax status ( an idea borrowed from the opposition); a 2p cut to National Insurance (NI) tax; a rise in the income threshold necessary to receive child benefits, from £50,000 to £60,000; the launch of a new Public Sector Productivity plan, alongside £3.4bn to modernise NHS digital and IT systems; a consultation for a new vaping tax; a continuation of the 5p fuel duty freeze; an extension of the windfall tax on energy firm profits extended until 2029; and the extension of the Household Support Fund for a further six months.

For all the tax cuts to sweeten the government’s election pitch, Torsten Bell, the chief executive of the Resolution Foundation, said, “The big picture has not changed at all with this Budget. Britain remains a country where taxes are heading up not down – rising by the equivalent of £3,900 per household – and where incomes are set to remain below their level at the last general election when voters return to the polls.” What do other policy experts make of Jeremy Hunt’s plans?

The everyday economy has been ignored

Sarah Longlands, director, the Centre for Local Economic Strategies

The policy ask: Investment in local services and the foundational, everyday economy

“This is the budget of a government that is barely cognizant of the crises unfolding around it. They’ve simply dusted off their old playbook – growth, tech, tax cuts. A better economy that delivers for communities requires strong local foundations. That means investing in health, social services, education and more. Decent local funding isn’t an expense – it’s an investment in prosperity.”

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An obsession with tax cuts over investment

George Dibb, associate director of economic policy, the Institute for Public Policy Research

The policy ask: A recovery based on public investment in infrastructure and green industrial strategies, coupled with higher taxes on capital gains

“This is a Budget that shows an obsession with cutting taxes today at the expense of vital public services tomorrow. Cutting National Insurance Contributions is not the right priority at the moment, with almost 50p of every £1 this costs going to the richest fifth of households, and just 3 per cent going to the poorest fifth.”

Austerity returns in all but name

Simon Youel, head of policy and advocacy, Positive Money

The policy ask: Windfall taxes on windfall profits to fund the green transition

“Despite the rhetoric of growth and fairness, today’s budget represents a return to austerity in the name of the short-termist fiscal rules that got us into this mess in the first place. The government’s confirmation that they will push ahead with the sale of the public’s remaining shares of Natwest, after it posted pre-tax profits of £6.2 billion for 2023, is a stark illustration. If the Chancellor really wanted to make the system fairer, he would have taxed banks’ unearned windfall profits that they’ve enjoyed at the expense of the Treasury, and used this to fund long-term investment in the green transition.”

Early years investment is sorely lacking

Becca Lyon, head of UK child poverty, Save the Children

The policy ask: More investment in social security and the early years sector

“The 4.2 million children living in poverty, one million of whom are destitute, continues to be a black mark for this Government. Benefit payments are at the lowest level in years, and we fear threats of increased sanctions. While we warmly welcome the significant changes to child benefit and the extension of the Household Support Fund, more investment is needed in social security and the early years sector to support the country’s most vulnerable children. Guaranteeing childcare rates is a good start and provides security for nurseries but the immediate roll out of expanded free hours is still in jeopardy and needs further investment.” 

No offer to local government

Zoe Billingham, director, the Institute for Public Policy Research North

The policy ask: A rescue plan for local government and genuine, long-term commitment to levelling up

“This Budget is the government’s admission that it has given up on levelling up this parliament, despite there being much left to do. It’s decidedly unfinished business. Headline cuts to National Insurance mainly benefit people in the south-east of England and are set against a backdrop of deep public concern about the state of public services. The country is crying out for public investment. Local government and our communities were provided with no substantive support today.”

The omission of social care raises serious concerns

Sarah Woolnough, chief executive, The King’s Fund

The policy ask: Commit new money, not repurposed old money, into social care reform, NHS infrastructure and technology.

“The government is right to acknowledge that outdated IT and technology is one of the barriers to NHS productivity. The announcement of £3.4bn capital investment over three years is a welcome first step to increasing efficiency. [But] ministers will need to resist the urge to give with one hand and later take away with the other – raiding NHS capital and technology budgets to cover day to day running costs has become an unfortunate trend in recent years. The omission of funding for the adult social care sector raises serious concerns amidst a bleak financial outlook for local government. The government has said it will deliver reforms to the costs people pay for their care by October 2025, but so far, no funding has been made available to ready the sector which raises questions about delays to the current timetable. The Budget contained a new tax on vapes and an increase in tax on tobacco. One of the most effective things the government could do to curb harm from smoking is quickly bring forward the planned legislation to introduce a phased ban on the sale of tobacco.”

There is no investment into green alternatives for low-income households

Gideon Salutin, senior researcher, Social Market Foundation

The policy ask: Invest in cheaper, greener alternatives like public transport and electric cars

“The only thing this freeze will fuel is more inequality. From today’s fuel duty freeze alone, the richest tenth of households in the UK will save an extra £60 a year, while the poorest receive only £22. The rhetoric around fuel duty focuses on the ‘families and sole traders’ it supposedly protects from poverty. But after spending £130bn on cuts and freezes over the past 13 years, the policy has only decreased the average household’s motoring costs by £13 a month. Achieving a more meaningful reduction in transport expenses requires the government to invest in cheaper, greener alternatives like public transport and electric vehicles, but today’s Budget did little to enhance those options for low-income households.”

Government must open up to start-ups

Derin Kocer, policy researcher, The Entrepreneurs Network

The policy ask: Enable start-ups to supply new tech to the public sector

“Public sector productivity gains can only happen with the adoption of new technologies, and the planned investments to achieve this should therefore be welcomed. However, we must not lose sight of the fact that for genuine transformation in delivery, our most innovative start-ups need a fair shot at supplying these new technologies, making reforms to public procurement all the more important. Many of Britain’s start-ups want to work with the state for the benefit of the country – the government should open its doors to them.”

It beggars belief that tax cuts take priority, even against public opinion

Dr Mary-Ann Stephenson, director, the Women’s Budget Group

The policy ask: Don’t prioritise tax cuts, fund public services

“Yet again the Chancellor has announced tax give aways that benefit men over women and benefit the better off rather than those most in need. At the same time as making tax cuts, the Chancellor has built in real-terms spending cuts to unprotected departments equivalent to 2.3 per cent a year. At a time when our public services are in crisis, and over 60 local authorities are warning they may face bankruptcy in the next year it beggars belief that a government thinks that tax cuts are a priority. They aren’t even popular with voters – only 16 per cent of whom want to see tax cuts if it means cutting public services.”

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