The Spring Budget was Jeremy Hunt's second major fiscal statement, as he joked himself to many cheeky comments from the House of Commons, he had been considering taking a step back at the age of 50 but had re-energised his career with a focus on finance.
And that brings us to one of the first major themes within the recent Budget, removing barriers for the over 50s staying in work.
Whilst there were expectations that the Lifetime Allowance – the maximum amount that workers can put into their pension pots - would be increased, the Chancellor surprised us all by announcing that the limit would be abolished.
He has also increased the tax free yearly allowance for additions from £40,000 to £60,000. There is commentary that a lot of these changes were made to allow various practitioners within the NHS to work for longer without being penalised.
In relation to the ongoing challenges around energy bills, Hunt spoke about the drive for “cheap and reliable” energy and a drive towards increased energy security given the way in which Russian president Vladimir Putin has weaponised energy availability.
The Chancellor confirmed that the energy price cap will continue at the same level, saying this will save the average family around £160 on their energy bills and cost the Treasury around £3bn.
In terms of energy security, in order to deliver on this, Hunt announced the Great British Nuclear – a new body which will aid energy companies in finding suitable sites for nuclear power plants.
Great British Nuclear will be targeting 25 per cent of the UK’s electricity to come from nuclear by 2050.
The tax burden on investors still remains very high due to the changes made in the Autumn Budget and careful tax planning is more necessary now than ever.One area in which there had been pushback was the planned increase to corporation tax. The Chancellor held firm on this, increasing the tax from 19 per cent to 25 per cent, however he did say that just one in 10 companies would end up paying the full 25 per cent rate.
He also replaced super deduction with full capital expensing for three years to put in additional support for businesses.
The Chancellor had been under a lot of pressure to make adjustments to the increasing financial costs of childcare and he started to deliver on this with the announcement that current free childcare will be expanded and also extended to children aged as young as nine months, and stating that all parents who work at least 16 hours a week will be able to claim 30 hours of free childcare.
He also changed the mandatory ratio of nursery workers to children to put less financial pressure on the industry.
In terms of inflation we had good news as the Office for Budget and Responsibility, the government's independent forecaster, confirmed they now expect the inflation rate to drop to 2.9 per cent by the end of the year, having peaked previously at 11 per cent.
Further good news came in confirmation that the UK had avoided a technical recession, with GDP only expected to contract by 0.2 per cent in 2023 whilst earlier predictions had put the contraction at 1.4 per cent.
After the contraction, the OBR has predicted the economy will grow every year to 2027, including: 1.8 per cent in 2024; 2.5 per cent in 2025; 2.1per cent in 2026; and 1.9 per cent in 2027.
In summary, the tone of the Spring Budget was very much focused on growth, and the Chancellor laid out intentions to turn the UK into a “Science Superpower” with a £1mn award for UK based AI breakthroughs and 25 investment zones across the UK, or as the Chancellor put it, “twelve new Canary Wharfs” and a strategy to make the UK a leader in quantum computing with additional funding being ploughed into this area up to 2033.
All in all it was an encouraging Budget, however the tax burden on investors still remains very high due to the changes made in the Autumn Budget and careful tax planning is more necessary now than ever.
Eleanor Ingilby, is deputy head of portfolio management at Atomos
