Spring Budget 2024 - update

I wrote yesterday that A budget statement should be a delicate thing. A slight pressure on the tiller It should be relatively neutral, and that is what has played out.

That said there was very little scope for anything else.

In December there was about £30 billion of fiscal headroom for cuts, but by last week that figure had fallen to £12.8 billion, and lower again yesterday, because of a combination of higher government borrowing costs and lower than expected tax receipts.

Given that the headroom has more than halved and we are now only at the start of March, with a 2% cut in National Insurance costing £10bn, (of the £12.bn) one must hope that the headroom doesn’t drop any further!

Was it the right thing to do?

Well, a survey in The Times, asking is Jeremy Hunt right to cut national insurance, as of last night, 54% thought he was wrong to do so. But as I also wrote yesterday, the budget is in essence a political statement as much as an economic intervention: one that is unlikely to change the result of the general election when it is finally called.

Non-Dom’s have had their tax breaks abolished. It is a headline grabber to prevent Labour having a headline grabber, and helps fund around 0.5% cut in NIC, which in the grand scheme of things is not a lot.

Elsewhere, there have been no changes in fuel duty. Is that 15 years now?  

Nothing material to change the sweep of “young-uns” (Or Gen-Z’s as I am probably meant to call them) who are reportedly switching to cigarillos and pipes as the duty on those is less, notwithstanding the increase as a result of the vape duty.

I confess I haven’t seen a cigarillo smoker in a long time, but I did say a lady in France sitting at the next table outside a restaurant light up her pipe between courses: a statement that I imagine that will be missing for almost all budget commentaries this morning!

There is a reason why we gave up doing budget seminars – there is often too little to say, and much of it has been telegraphed in advance. Of course though if you would like to understand what it means for you, do let us know directly.