Budget Summary: Jeremy Hunt’s 2023 Budget Highlights

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WATCH: Hunt announces continued energy support

Chancellor of the Exchequer Jeremy Hunt has unveiled his first budget in the House of Commons.

It focuses on bringing those who have left their jobs back to work and promoting business investment.

Below is a summary of the main announcements.

Fuel, Alcohol, Pensions and Wages

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Energy bills, prepaid electricity meters and nuclear power

Image Source, Reuters
  • Government subsidy to limit typical household energy costs to £2,500 a year extended for three months until end of June
  • £200m to align energy bills on prepaid meters with prices paid by customers via direct debit – affecting 4 million households
  • Commitment to invest £20 billion in low-carbon energy projects over the next two decades, with a focus on carbon capture and storage
  • For investment purposes, nuclear energy will be classified as an environmentally sustainable energy source and is expected to receive more public funding
  • £63m to help leisure centers cope with rising pool heating costs and invest in energy efficiency

Childcare, universal credit and return to work schemes

Image Source, PA media
  • 30 hours of free childcare for working parents in England extended to one and two year olds in phases from April 2024
  • Families on Universal Credit can get childcare support up front, rather than in arrears, with the cap raised to £951 per child per month from £646
  • Giving £600 ‘incentive payments’ to those who become nanny and easing rules in England to let nanny care for more children
  • New fit-to-work testing regime to qualify for health-related benefits
  • New voluntary employment scheme for people with disabilities in England and Wales called Universal Support
  • Stricter job search requirements and increased job support for Universal Credit primary child caregivers
  • £63m for schemes to encourage retirees over 50 to return to work, ‘returns’ and skills camps
  • Immigration rules eased for five construction jobs to ease labor shortages

Government Debt, Inflation, and Economic Growth

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  • OBR predicts UK will avoid recession in 2023, but economy will shrink 0.2%
  • Growth expected to be 1.8% next year, 2.5% in 2025 and 2.1% in 2026
  • Inflation in the UK is expected to fall to 2.9% by the end of the year, down from 10.7% in the final three months of 2022
  • Underlying debt expected to be 92.4% of GDP this year, rising to 93.7% by 2024

Corporate Tax, Investment Zones and Tax Relief

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  • The main rate of corporate tax paid by businesses on taxable profits over £250,000 has been confirmed to increase from 19% to 25%
  • Companies with profits between £50,000 and £250,000 pay tax rates of 19% to 25%
  • Companies can deduct investments in new machinery and technology to reduce taxable profits
  • Tax breaks and other benefits for 12 new UK investment zones, each to be funded with £80m over five years
  • Reduced paperwork for international traders who will also have longer to submit customs forms under simplified rules

other measures

  • Pledge to increase defense spending by £11bn over the next five years
  • Jail for man convicted of marketing tax avoidance scheme
  • £200m this year to help local councils in England fix potholes
  • An extra £10m over the next two years for charities helping prevent suicide in England
  • Commitment to streamline approval process for new medical products
  • £900m for new supercomputer facility to help UK’s AI industry

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