Spring Budget 2023

The Chancellor of the Exchequer, Jeremy Hunt, delivered the UK Government budget this afternoon. The overriding theme of the speech was increasing the capacity of the UK economy to grow. Not surprisingly, considering the current tightness of the labour market, a lot of the measures announced target hindrances to participation in the workplace. 
Personal Finance

Inflation is forecast to 2.9% per annum by end of 2023.

Energy Price Guarantee will be maintained at £2,500, where it had previously been scheduled to rise.

Fuel duty will be frozen for a further 12 months, whereas the reduced level of fuel duty to help motorists last year was scheduled to be removed and Fuel duty was scheduled to increase with the Retail Price Index.

Overall Government Fiscal Summary

Underlying debt as a percentage of GDP is scheduled to be 92.4% this year, rising to 97.3% in 2023/24 before reducing to 94.6% in 27/28.

The deficit is projected to be 5.1% this year, falling to 1.7% in 27/28. In 26/27 & 27/28, the deficit will actually be a surplus in terms of day-to-day spending and any overall deficit will be due to investment spending.

Government departmental spending will grow by 1% per annum in real terms after 2024/25 through to 2027/28 and capital spending plans have been maintained.

Unemployment rate is set to increase less than 1% to 4.4%, 170k fewer people unemployed compared to Autumn statement.

£11bn will be added to the defence budget over next 5 years, bringing it to 2.25% of GDP by 2025. The Government will aim for it to be 2.5% of GDP once fiscal and economic constraints allow.

Overall, the budget presented a slightly reduced tax burden prior to previous arrangements.

Schools funded to increase supply of wrap-around care so all children can be cared for by schools between 8AM & 6PM with the ambition that this will be offered by all schools by September 2026.

In all households where all eligible persons are working at least 16 hours, 30 hours of free childcare over the age of 9 months. This will be phased in from April 2024.

Increase in funding for free childcare by £204m from Sept, rising to £288m next year, avg of 30% increase in the 2yr old rate.

Qualifying care relief threshold for carers increased to £18,140.


The pension Annual Allowance is to be increased to £60,000 from £40,000.

The pension Lifetime Allowance (LTA) is to be scrapped, with the Tax Free Cash element limited to 25% of the existing LTA.

Plan to state in Autumn Statement measures to unlock investment from DC pensions in growth investments.


Confirmation of 25% Corporation Tax rate.

New policy of full capital expensing for next 3 years, with intention to make it permanent when possible. Worth £9bn for each year in place.

Nuclear power to be declared environmentally sustainable, to give access to the same support as renewable energy.

Up to £20bn support for CCUS (Carbon Capture Use and Storage)

Reform of MHRA to speed up approval for medicines and devices already approved in recognised authorities.
UK holds 1/3rd of all European Artificial Intelligence (AI) companies. –  AI sandbox to be launched to increase speed of growth, alongside reform of copyright laws so generative AI companies can access the data they require. A Quantum Computing Strategy will be created.

Plan to state in Autumn Statement measures to unlock investment from DC pensions and other sources, make the London Stock Exchange a more attractive place to list and complete the response to the challenges faced by the US inflation reduction act.

There will be much further detail released in the coming days and weeks but it certainly appears that there will be new planning opportunities in the future.

Written by: Sam Hallett

Date: 15th March 2023

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