The Chancellor Jeremy Hunt will announce the spring budget on Wednesday (Picture: Getty/Reuters)
The spring budget takes place this week and it is the last one before the general election this year.
Chancellor Jeremy Hunt took a grilling on the Sunday morning news shows which gave us some indication as to what we might expect from it.
He delivered the autumn budget in November 2023 and announced a raft of measures including a cut to national insurance and alcohol duty frozen until August this year.
But what is the spring budget and what can we expect to be announced on Wednesday?
What is the spring budget?
A budget is the moment when the government in power makes economic changes like tax cuts, and sets out plans for spending on things like public services, health and education.
Budgets usually happen once a year in the spring and a smaller version of the budget takes place in the autumn.
This spring budget is important because it is the last one before the general election.
Jeremy Hunt appears on BBC’s Sunday with Laura Kuenssberg (Picture: Reuters)
What can we expect from the spring budget?
We are likely to see policy measures designed to win over support for the Tories before the election, so tax cuts could be on the horizon.
It is believed further cuts to National Insurance and Income Tax could be announced.
Mr Hunt described the 2p cut to national insurance in the autumn statement as a ‘turning point’.
But he made it clear the government will not be committing to any radical tax cuts.
He told Trevor Phillips on Sky News’ Sunday Morning: ‘When it comes to tax cuts, I do believe that if you look around the world, countries with lower tax tend to grow faster — North America, Asia — and so I do think in the long run we need to move back to being a lower taxed, more lightly regulated economy.
‘It would be deeply unconservative to cut taxes in a way that increased borrowing, wasn’t fully funded.
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This will be the last budget before a general election (Picture: Reuters)
‘If I think of the great tax-cutting budgets of the past, Nigel Lawson’s budget in 1988 — the reason that was so significant is because those tax cuts were permanent.
‘People need to know that these are tax cuts you can really afford, so it will be responsible and everything I do will be affordable.
‘All conservatives believe that the state has a moral duty to leave as much money in people’s pockets as possible because it belongs to the people who earn that money.’
When asked on Sunday with Laura Kuennsberg whether he was considering the Labour Party policy of scrapping the non-dom tax scheme to fund small tax-cuts, he said the country ‘sees through gimmicks and we are not going to do gimmicks on Wednesday’.
Mr Hunt suggested to the BBC that there will not be a mass public sector spending programme and instead will free up money by looking to improve Whitehall productivity and efficiency.
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He said: ‘We have to think not about the money we’re putting in but whether we can do things more efficiently so that we get more out.’
Mr Hunt added he didn’t believe in ‘forever expanding the welfare state’ because ‘I don’t think that’s compatible with bringing the tax burden down in a society that makes work pay’.
On Times Radio, the Chancellor said ‘It’s wrong to say the only way to improve public services is by putting more money in’.
When asked if the government wouldn’t spend more, he said said it was ‘the wrong question to ask’, and did not answer if public services were in a good state right now.
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