Order! Jeremy Hunt’s speech in the House of Commons today more closely resembled a substitute teacher who’s lost the classroom than an annual fiscal statement.
Each reform announced by the chancellor in his Spring Budget was met with cheers, jeers, and general disobedience by MPs.
Among various other measures, Hunt cut national insurance by 2p, scrapped the ‘non-dom’ tax status, and introduced a British ISA.
Fortunately, the FT Adviser team watched the entire speech so our readers don’t have to, and we’ve picked out some of the more offbeat moments in the chancellor’s delivery for your digest.
Inflation cut? You’re welcome
Hunt began his speech by announcing that UK inflation had fallen from 11 per cent to 4 per cent during his tenure.
While not wrong, he has conveniently taken credit for the Bank of England’s work (you know, the independent body whose sole mandate is price stability) without much of a murmur.
It’s also worth pointing out that the fall in inflation can largely be attributed to cooling energy prices, and not, oddly enough, ministerial prudence.
British ISA? I hardly know her
A much-anticipated measure for the financial sector was whether Hunt would reform the existing Isa regime with the introduction of a British Isa.
Ignoring calls to turn the framework into a vehicle for investing exclusively in domestic companies from Liontrust and Premier Miton (presumably to halt outflows from their UK funds), Hunt instead opted for an additional £5,000 of annual investment in British equities on top of the existing allowance.
According to AJ Bell, however, this is ‘doomed to fail’, pointing out that everyone else can already invest more in UK companies through their existing stocks and shares Isa allowance – they just don’t want to.
Handbags
Among those reprimanded for bad behaviour was Wes Streeting, whose frequent outbursts were swiftly shut down by deputy speaker Dame Eleanor Laing.
MP Toby Perkins was also threatened with the naughty step for talking over Hunt five times, while the chancellor’s announcement that fuel duty was maintained as a result of the Sun newspaper’s ‘Keep it Down’ campaign also elicited groans from the audience.
What wasn’t included?
Arguably as important as new legislation is the legislation that didn’t make the grade. Those hoping to see inheritance tax reform will be once again disappointed as Hunt made little mention of the matter in his speech.
The headline figure is Hunt opting for a national insurance cut instead of an income tax cut, which is aimed at reducing ‘double-taxation’ on workers.
However, some experts are worried that rising inflation could cause a fiscal drag, bringing some workers into higher tax brackets and as such negating any gains from lower national insurance.
Spare a thought for our journalists, though, who must now wade through an ocean of press releases to ascertain whether the average earner will save any money as a result of the tax cuts. We’ll be sure to let you know.
joseph.wilkins@ft.com
