Budget 2024 live: Jeremy Hunt cuts national insurance, abolishes non-dom status and raises child benefit threshold – as it happened

Hunt confirms 2p cut in national insurance, claiming average personal taxes now at lowest level since 1975

Hunt is now talking about national insurance.

From April employee national insurance will be cut from 10% to 8%, and self-employed NICS from 8% to 6%.

He says, combined with the changes announced in the autumn statement, 27 million people will gain £900. And 2 million self-employed people will gain £650.

He says the OBR says this will put 200,000 more people in work. And it will increase GDP by 0.4%, he says.

He says this will bring personal taxes to their lowest level since 1975.

And he says the Conservatives will continue to keep cutting national insurance.

(There is a big difference between personal taxes and the overall tax burden. In 1975 VAT had only just been introduced, and it was levied at 10%. It is double that rate now.)

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Key events

1h ago

Early evening summary

2h ago

Budget 2024 calculator: find out if you are better or worse off

2h ago

Taxpayers paying £15,000 for damages payout to academic libelled by Michelle Donelan, science department reveals

2h ago

Labour’s Jonathan Reynolds says Labour will find ‘alternative way’ of funding its policies reliant on non-dom revenue

2h ago

Osborne says Hunt’s plan to assess child benefit eligibility on household basis booby trap for next government

3h ago

What opposition parties are saying about budget

3h ago

Pensioners lose out in ‘sweet and sour’ budget, says Resolution Foundation

3h ago

National insurance cuts won’t stop tax-to-GDP ratio rising by 4 percentage points this decade, OBR says

3h ago

OBR: Hitting military spending target would wipe out fiscal headroom

4h ago

How national insurance cut will compensate some of Scotland’s higher earners for extra income tax they pay

4h ago

Moody’s: Budget perpetuates UK’s problems

4h ago

How almost 7m people will pay tax for first time, or join higher tax band, as result of 6-year allowance/threshold freeze

4h ago

IFS: post-election spending plans look ‘devilishly difficult to deliver’

4h ago

Scottish Tory leader Douglas Ross says national insurance cut ‘can’t be stymied by SNP’

4h ago

Tories challenge Labour to say what will happen to policies it planned to fund through tax measures Hunt has adopted

4h ago

IFS: Hunt taxes the smoke and mirrors Labour’s plans

5h ago

Households still £870 worse off on average, Labour claims, because NI cuts don’t compensate for freezing allowances

5h ago

Vaping tax could double cost of highest nicotine products

5h ago

Energy minister Andrew Bowie says extension of windfall tax on energy firms ‘deeply disappointing’

5h ago

Hunt says ending employee national insurance ‘long-term ambition’ for Tories

5h ago

Experts voice doubts about Brit ISA

5h ago

What you need to know about the new economic forecasts

6h ago

Sunak faces rebellion from Scottish Tory MPs over plan to extend windfall tax

6h ago

Tax as a share of GDP to hit the highest level since 1948

6h ago

Starmer says Labour supports cut to national insurance in budget

6h ago

Starmer describes budget as ‘last, desperate act of party that has failed’

6h ago

OBR: Medium-term outlook remains challenging

6h ago

Budget debate held up after SNP MPs force surprise vote on its provisions

6h ago

Hunt confirms 2p cut in national insurance, claiming average personal taxes now at lowest level since 1975

6h ago

Hunt says 500,00 families will gain almost £1,300 from increase in high income threshold for child benefit

7h ago

Hunt says he will raise £2.7bn by abolishing non-dom status

7h ago

Hunt says he will raise £1.5bn by extending windfall tax on energy companies

7h ago

Hunt says tax relief for holiday lettings will end

7h ago

Hunt confirms new tax on vapes

7h ago

Hunt announces £3.4bn plan to modernise NHS’s IT system

7h ago

Hunt says he will maintain plan to increase future public spending by 1%

7h ago

Hunt announces plan for new ‘British Isa’ allowing £5,000 investments in UK firms, on top of existing Isa allowance

7h ago

UPDATED: Latest growth forecasts

7h ago

Hunt says OBR forecasting 0.8% growth this year

7h ago

Hunt claims Labour can only implement its energy policy within fiscal rules by raising taxes

7h ago

Fuel duty freeze extended

7h ago

Hunt says freeze in alcohol duty being extended until February 2025

7h ago

Hunt announces abolition of £90 charge for a debt relief order

7h ago

Hunt says OBR expects inflation to fall below 2% within months

7h ago

Hunt claims ‘lower taxes mean higher growth’

8h ago

Jeremy Hunt delivers budget statement

8h ago

PMQs begins

8h ago

Scottish Tory leader Douglas Ross says he will not vote for budget plan to extend windfall tax on energy firms

8h ago

Rishi Sunak faces Keir Starmer at PMQs

8h ago

Labour says adopting its plan to abolish non-dom tax status would be ‘humiliating U-turn’ for Tories

9h ago

How taxes go down and up before and after general elections

10h ago

UK fuel duty cut is regressive policy that benefits the wealthy, study finds

10h ago

2p cut in national insurance as Jeremy Hunt prepares to reveal full spring budget

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Early evening summary

And here is an extract from Larry’s piece.

Jeremy Hunt is in favour of delaying the election until the autumn, and it showed. His second budget had all the hallmarks of a holding operation from a government hoping the summer will bring better economic news and leave open the possibility of another package of measures in six or seven months’ time.

Sure, there was the much-heralded cut in national insurance contributions, which formed the biggest chunk of a front-loaded £14bn stimulus package. Certainly, he took every opportunity to have a pop at Labour in a deeply political speech. This will be the last budget before the election, but it did not feel like the last roll of the dice for the government.

Hunt did what all chancellors do on budget day. He accentuated the positive. There was much talk about how the economy had turned a corner, but nothing about how this is on course to be the first parliament in modern times where living standards have fallen. He was keen to say that taxes had been cut by £900 for the average worker as a result of last year’s autumn statement and this year’s budget. He forgot to mention that the long-running policy of freezing thresholds means the Treasury is still sucking spending power out of the economy in this and every year until the end of the decade. The budget tax cuts mean the fiscal tightening for 2024-25 is just over £41bn rather than the £56bn previously planned.

Keir Starmer, the Labour leader, used his response to the budget to say that policies implemented by the Conservatives over the past 14 years had left Britain in a “vicious downward spiral”. He said:

The reality is, there is no path to economic stability, no way to a calmer, less chaotic politics, with the party opposite in power.

Because chaos is now their worldview. A mindset that sees Britain’s problems as opportunities they can exploit. Whether, like the chancellor, that’s out of desperation because they can’t solve them. Or whether, like the [Suella Braverman or Liz Truss], they have no intention of solving them whatsoever.

For a party this weak and divided – the end result is always the same. A vicious downward spiral. Chaos feeding off decline. Decline feeding off chaos.

While working people pay the price.

The British people know – this will not stop.

Starmer said little about the specific budget meaures in his speech, although Labour later indicated that it will try to find alternative ways of funding the policy commitments it planned to fund using tax measures now adopted by the Tories. (See 5.57pm.) Starmer ended his speech by challenging Sunak to call a general election for 2 May. But he is unlikely to get his wish. Despite recent chatter about an early election, the consensus at Westminster is that this budget has made that less likely. For a May election, the budget would have needed to function as a springboard. Instead, this one was short on bounce.

Jeremy Hunt delivering his budget. Photograph: Maria Unger/Reuters

On the economic front…

Despite Hunt’s various tax cut announcements today, the tax burden will reach a 70-year high of 37.1 per cent of GDP in 2028-29, the Office for Budget Responsibility says. That’s the highest since 1948.

The economic outlook has improved slightly since November, even though the UK sank into recession at the end of last year.

The OBR revised up its forecast for growth this year to 0.8%, up from 0.7% expected before. The OBR then expects growth of 1.9% in 2025, revised up from 1.4%.

But according to the Resolution Foundation, the UK’s slow growth means the economy is set to be smaller in real per capita terms at the time of the next election than it was at the previous election in 2019, for the first time ever.

The chancellor also has extremely little flexibility to hit his target to have debt falling, as a share of GDP, in five years’s time. His fiscal headroom has shrunk to £8.9bn, which is little more than a rounding error – and arguably just fantasy, as it based on unrealistically tight public spending after the election.

Goodnight! AS and GW

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Updated at 13.59 EST

Budget 2024 calculator: find out if you are better or worse off

Our budget calculator, created with accountancy firm Blick Rothenburg, is now live:

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Updated at 13.17 EST

The two thinktanks with the most clout in budget analysis are the Institute for Fiscal Studies (see 3.50pm) and the Resolution Foundation (see 4.58pm). But here are comments from three other thinktanks.

From Tom Smith, director of economic policy at the Tony Blair Institute

The only sustainable route to lowering the tax burden is to make the investments needed to fundamentally reform the state and the way public services are delivered.

The chancellor’s plans to harness technology to boost public sector productivity are exactly the kind of approach that the UK needs. His new £4.2bn investment over the next 5 years is a good downpayment on realising this potential. But the scale of the investment – equivalent to £840m a year (or 0.03% of GDP) – will not be enough on its own to turn around the UK’s fiscal fortunes.

By contrast, the cuts to national insurance announced today and in the Autumn Statement are worth more than twenty times this amount, and are a stark illustration of where the government’s priorities lie.

The government continues to put the cart before the horse, prioritising pre-election tax cuts over the long-term investment needed to boost growth, transform public services, and create the fiscal space for sustainable tax cuts in the future.

Overall, today’s budget has done little to change the UK’s fiscal outlook, which still assumes taxes will rise to a post-war high and includes a severe squeeze on some public services after the election.

From Ryan Shorthouse, executive chair of Bright Blue, a thinktank for liberal conservatism

The chancellor has set the right path for taxation, focussing on cutting national insurance rather than income tax. This is good, both intergenerationally and economically, since it rewards a younger, working-aged population who derive almost all their income from working, rather than from dividends, rents and pensions.

Frankly, however, the measures to mitigate the perverse ‘double taxation’ of work are too little, too late from the Tories. Instead of the chancellor using his fiscal headroom for tax cuts and reliefs to all sorts of special interests, it would have been fairer and more effective to have just cut national insurance – both for employers and employees – more deeply now …

The bottom line is that taxation, public debt and immigration are all at record levels after 14 years of Conservative governments – the very opposite of what the public voted and expected them to do. The government has failed to take the bold steps necessary to fix this.

From Paul Kissack, chief executive of the Joseph Rowntree Foundation

This was a budget for big earners and big owners. Prioritising capital gains tax cuts for owners of multiple properties is an insult to almost four million people facing destitution in the UK today.

The chancellor stood up at the despatch box today and announced a short term patch up of his government’s own failed systems. He was right to extend the household support fund, which has given essential help for some families at difficult times. But extending a temporary support scheme for a paltry six months doesn’t equate to fixing the fundamental problem that made its existence necessary.

The government is right to acknowledge that deductions from Universal Credit which leave 97% of low income families affected by these loans having to go without essentials are driving hardship in this country. They are right to take action on this dire situation, but they must now commit to a fundamental change in our social security system which guarantees that people can always afford the essentials.

ShareTaxpayers paying £15,000 for damages payout to academic libelled by Michelle Donelan, science department reveals

It cost taxpayers £15,000 to cover damages to an academic science secretary Michelle Donelan had falsely accused of supporting Hamas, her department has said.

The sum was paid “without admitting any liability”, according to the Department for Science, Innovation and Technology (DSIT).

Daisy Cooper, the Liberal Democrats’ deputy leader, said it was a “scandal” that Donelan was not paying the damages herself. Cooper said:

This is nothing short of a scandal and we still don’t know the full legal costs.

If Michelle Donelan had a shred of integrity left, she would pay for this bill out of her own pocket instead of asking taxpayers to pick up the tab.

If she refuses to do so, Rishi Sunak should dock her pay.

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Updated at 13.32 EST

Today’s net giveaway of £13.9bn in the current financial year may help end the recession before an election later this year, City consultancy Capital Economics predict.

But… they also warn that there are likely to be new tax hikes after the election.

The resulting drag on the economy may contribute to more interest rate cuts next year than most expect, bringing Bank of England base rate down from 5.25% now to 3.00% in 2025, they add.

ShareLabour’s Jonathan Reynolds says Labour will find ‘alternative way’ of funding its policies reliant on non-dom revenue

Jonathan Reynolds, the shadow business secretary, has just told Radio 4 that Labour will find “an alternative way” of funding the policies it had planned to fund with revenue from the abolition of non-dom status. He said the money was going towards the NHS, and dentistry in particular. Evan Davis asked him in particular about the non-dom policies, but Reynolds answer implied that Labour would also apply this approach to the policies funded by the extension of the windfall tax on energy companies.

But Reynolds also said it might take the party a few days to find a precise way of funding these policies.

The Tories published a list of the Labour policies they now think are in jeopardy earlier. (See 3.40pm.)

ShareOsborne says Hunt’s plan to assess child benefit eligibility on household basis booby trap for next government

Jeremy Hunt announced significant changes to the rules affecting higher earners who want to claim child benefit. Child benefit is worth £24 per week for the oldest child, and £15.90 per week for other children, and overall the new system is going to be significantly more expensive than the current one, costing the Treasury more than £500m per year. This is how Hunt explained it in his speech.

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 …

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.

But some families are set to lose out badly. For example, a couple with one parent earning £45,000 a year, and the other earning £40,000 a year currently qualify for child benefit at the full rate. Under the new system, where a household threshold, not an individual threshold applies, they would get nothing.

And this change (the bit that saves the Treasury money) is not due to come into force until April next year, while the other changes (which cost the Treasury money) come into force this spring.

In his Political Currency podcast, which he co-hosts with Ed Balls, the former Tory chancellor George Osborne says this is a booby trap for the next government. He says:

This whole thing [of] ‘we’re going to have a brand new system for high earners in our country where we’re going to assess their entire household income in order to calculate this child benefit charge. We can’t do it now. But we’ll be bringing it in 2026’. That, I promise you, is a mine placed in the minefields for the future.

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Updated at 12.43 EST

The Office for Budget Responsibility has trimmed its forecst for house price falls this year.

The OBR’s central forecast is for a 2% in average house prices in 2024, slightly under half of the 5% it expected in November.

This is mainly because the OBTR has revised down its forecast for mortgage rates in the next few years.

The average house price in the UK is forecast to fall to slightly under £275,000 in the final quarter of 2024. Supported by falling new mortgage rates, we then expect house prices to grow around 2 per cent in 2026, and around 3½ per cent in 2027 and 2028.

That would see nominal house prices surpass their historical peak in the first quarter of 2027.

ShareWhat opposition parties are saying about budget

Here are some of the comments from opposition parties about the budget.

From Labour’s Rachel Reeves, the shadow chancellor

The chancellor’s budget has lifted the lid on 14 years of Tory economic failure.

Taxes are still rising, prices are still going up in the shops, and mortgages are higher.

Nothing Jeremy Hunt has said today changes that. It’s time for change. It’s time for an election.

From Ed Davey, the Lib Dem leader

This is a bottom-of-the-barrel budget from a Conservative government that has given up on governing.

Rishi’s recession is being followed by Hunt’s hangover, with years of unfair tax hikes while local health services are stretched to breaking point.

This udget had nothing to offer for people seeing their mortgage soar due to Conservative chaos or being left waiting for months in pain for NHS treatment.

The public will see this for what is: a desperate last throw of the dice by a Conservative government that has neglected the NHS, trashed the economy and overseen a record fall in living standards. It couldn’t be clearer that we need a general election now so voters can finally kick this tired and out-of-touch government out of office.

From Drew Hendry, the SNP’s economy spokesperson

The Tories trashed the economy, and now they’re taking the axe to public services – showing why it’s essential to vote SNP at the general election to make Scotland Tory-free and have the choice of a better future with independence.

Scotland’s budget has already been slashed by the UK government – and now they are cutting public services to the bone.

Worse still, there is no alternative on offer from Sir Keir Starmer’s Labour Party, who support Brexit and want to impose the same damaging Tory fiscal plans, which will slash services and starve the economy of the investment needed to secure growth.

The UK economy is broken – and the damaging cuts in today’s budget will make it even worse by failing to properly invest in the green energy gold rush, choking off economic growth, and putting up to 100,000 jobs at risk in Scotland’s energy sector.

With the UK cost of living soaring, it’s a scandal that Tory tax breaks will benefit the richest most – with any benefit for working families completely wiped out by the cost of rising rents, mortgages, bills and food prices.

From Carla Denyer, the Green party’s co-leader

People are crying out for investment in social care, in our NHS and in dentistry. We needed a ‘care full’ budget but have ended up with a careless, reckless Budget.

Chancellor Jeremy Hunt is attempting to bribe the electorate through tax cuts, which can only mean more pain for public services that are already on their knees.

People won’t be richer, healthier or happier because of this Budget. People know a con when they see one.

From Richard Tice, the Reform UK leader

They had one last chance to try and fix the economy they’ve broken…

Instead, all they offered was lies, spin and taxes via the back door.

There is an alternative. The alternative is @reformparty_uk.

From Plaid Cymru’s Ben Lake

The Chancellor’s Budget confirmed suspicions that the Government has little intention to address the many pressing issues facing society.

People are fed up of seeing public services crumbling around them due to a lack of public investment.

The Chancellor rightly pointed out that a strong economy depends on strong public services, and yet public investment in the UK’s social and economic infrastructure has remained at around half the average for OECD advanced economies for decades.

Today’s Budget does nothing to close that gap. Rather than tackling this long term weakness in the UK’s economy, the Chancellor prioritised the short term electoral fortune of the Government.

ShareRishi Sunak and Jeremy Hunt making a post-budget visit to a builders’ warehouse in London. Photograph: WPA/Getty ImagesShare