Jeremy Hunt cuts National Insurance and extends child benefit in Budget

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We’re nearing the end of today’s live coverage of the Spring Budget. Here’s a quick look back at some of the key developments from today:

• The banner announcement from Jeremy Hunt’s Budget's today was the reduction of workers' National Insurance by 2p
• Speaking to the BBC's political editor Chris Mason earlier this evening, the chancellor reiterated that he wants to get rid of the tax altogether
• The increase to the child benefit threshold from £50,000 to £60,000, and to the VAT threshold for small businesses to £90,000 also made headlines along with higher taxes on vapes and business class flights
• The Tories were at one point accused of idea theft by Labour, after Hunt announced the "non-dom" tax system would be “abolished”. New arrivals to the UK, however, will still not pay taxes on foreign income for four years
• The budget drew ire from Labour leader Sir Keir Starmer, who called the Budget a "last desperate act", adding that people are now paying "more and more for less and less"
• New official forecasts say the government will collect 37.1p per pound of GDP in 2028/29 - the highest level in nearly 80 year
• Lib Dem leader Ed Davey also took aim at the Budget, which he says won't "touch the sides" for families and pensioners struggling with the cost of living, telling the BBC "this is really bad news for people"

You can find explainers and additional coverage of today's Budget in our business pages here, and find a summary of all the key points here.

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Now for some reaction from several major charities on the chancellor's decision to extend a financial support fund for people in England struggling with the cost of living.

Jeremy Hunt cited campaigning by the Joseph Rowntree Foundation and the Trussell Trust when announcing that the Household Support Fund would receive an additional £500m, allowing it to continue for another six months.

Paul Kissack, chief executive of the Joseph Rowntree Foundation, says the chancellor was "right" to extend the scheme, but it "doesn’t equate to fixing the fundamental problem that made its existence necessary".

Meanwhile, the Trussell Trust's Helen Barnard says Hunt "has offered only temporary sticking plasters instead of long-term solutions to the crisis of rising hunger, hardship, and debt".

And Action for Children suggests the Budget measures indicated the government was "swept up in pre-election fever" and had "largely ignored children and families struggling in poverty".

During his sit down interview with the BBC's political editor Chris Mason, Jeremy Hunt has said that the Spring Budget was a "decisive step" towards lowering taxes.

You can watch this moment back here:

Jeremy Hunt is maintaining that the cuts to National Insurance that he has overseen while chancellor effectively amounts to a reduction in income tax for people in work

After the chancellor failed to answer the question of whether he'd like to see an income tax cut before the next election, Hunt says the 2p cut to National Insurance announced today, added to the 2p announcement during the Autumn Statement last November.

This meant that the government was putting through a cut that was "equivalent to a four pence cut in income tax", he says.

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Hunt is now asked about whether he plans to cut income tax before the next general election, to which he replies that he'd "like to cut lots of taxes".

Chris Mason continues to push this line, asking the chancellor for a clear answer while reminding Hunt that Rishi Sunak promised he would cut income tax back when he was campaigning to become the next prime minister.

Hunt then adds that this will mean more growth, jobs and a higher GDP.

Mason says that as the thresholds for various rates of tax remain frozen, people are still paying more even with income rises.

Hunt responds by saying that we are "all paying more" due to what he describes as the exceptional circumstances produced by the pandemic and the energy crisis.

In an interview with Chris Mason, the chancellor says he is "making progress" towards abolishing National Insurance.

Hunt says he thinks it's "an unfair system to have an extra tax on work. And I said in my speech that I would like to end that unfairness".

However he makes clear he would only make further changes "when it's affordable and as long as we're able to do it without risking public services".

Our political editor Chris Mason has just interviewed Chancellor Jeremy Hunt following his Budget announcement earlier today.

Follow along here for the key lines.

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We heard the chancellor announce £105m to build 15 new schools in England for children with special educational needs and disabilities, or SEND.

(We don’t know where they’ll be yet, we should find out by May.)

The government is framing this new money as part of a “productivity drive”. Why? Because it wants to sort out its "inefficient" relationship with independent special schools.

Councils placed about 20,000 children in these schools in 2022. According to the Department for Education, their funding comes “overwhelmingly” from the state.

Jeremy Hunt said that while their provision can be “excellent”, it’s also “expensive”.

The NAHT head teachers’ union said the investment was welcome but “does not begin to address the huge shortages of specialist staff, capacity and funding for pupils with SEND”.

That’s not the only disappointed email to land in my inbox this afternoon.

Colleges point out that there was no new investment to help young people develop skills. Nor was there anything to help students struggling with the cost of living, says the National Union of Students. Others had been calling for Covid catch-up tuition to continue.

And schools, which have benefited from extra funding in recent years, had been hoping for announcements on building works and teacher recruitment and retention. Not today.

Aga SzedzianisCopyright: Aga Szedzianis

Sticking with National Insurance, I've been speaking to Aga Szedzianis, who tells me that while there was some good news in the Budget, she would have liked to have seen more help for working parents.

The mother-of-two, 37, says the 2p cut to NI contributions is "ok, but not a big help".

"Of course, it is a little bit welcomed, but at the same time if that means spending less on public services then I personally don't think it's worth it."

Aga and her husband, from Newham in East London, both earn more than £50,000 as associate architects, so they will benefit from the increased thresholds for child benefit.

"We currently pay about 50% of it back. So now it means we can claim it in full and don't have to do these complicated calculations for how you get it."

But she adds: "The child benefit change helps, but it would be great if it was directed more towards childcare itself."

One of the key announcements in Chancellor Jeremy Hunt's Budget today was the cut to workers' National Insurance by another 2p.

Confused by what that means for you? Have a listen to consumer finance expert Martin Lewis, who explains it all very clearly:

A lot of ground was covered in today's Budget - and you can find a recap of the major announcements here.

But for now, here's a look at some of the reaction from the opposition parties:

• Shadow chancellor Rachel Reeves said today's plans "lifted the lid on fourteen years of Tory economic failure", adding that Labour was "now the party of economic responsibility"

• Meanwhile, Liberal Democrat leader Ed Davey said the Budget offered "no relief" for the "widespread pain" felt by people under the current government
• Green Party spokeswoman Cllr Emily O'Brien praised Hunt for backing the party's calls to "save the Household Support Fund"

• And SNP economy spokesman Drew Hendry said the nation's finances were "so pared to the bone that we can see the marrow", and described Hunt as taking an "even bigger axe" to investment than his predecessors

I'm in the North East of England today, asking people for their thoughts on today's Budget.

Laura Mavin, a mother-of-two from Northumberland, tells me she thinks moving the child tax benefit threshold from £50,000 to £60,000 is a "good thing".

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"As it stands, if my wage went slightly over - say if I did an enhanced shift and my pay went over - I would lose [some of] the benefit."

She adds that previously, she would've been concerned about the impact going over the £50,000 threshold would have on her benefit.

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Meanwhile, Andrew Bennett who is retired and lives with his wife Helen in Warrington, says he's "disappointed" in the Budget, adding: "What I heard from the chancellor does not help us.

"No help for students, no help for family carers, no help for pensioners. The only help for the NHS is a new IT system which, given the Post Office fiasco, needs careful attention."

Freezing fuel duty doesn’t just affect the public finances, it also impacts carbon emissions.

That’s because the cheaper fuel is, the more likely we are to use our cars rather than public transport and to buy bigger, more fuel-thirsty vehicles.

If this was a one-off freeze of fuel duty the CO2 impacts would be limited but this is the 14th year it has been frozen. What’s more, in 2022 the then-chancellor, Rishi Sunak, cut fuel duty by an additional 5p a litre as a response to the energy crisis.

Today that was extended for a second year.

Working out the effect that has had on emissions is complicated, but after last year’s budget the online climate journal, Carbon Brief, gave it a go. It estimated road transport emissions by 2023 could be as much as 24% higher (21MtCO2) than if fuel duty had risen in line with inflation.

It found the UK’s overall CO2 emissions were likely up to 7% higher than they would have been without fuel duty cuts.

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With less than four weeks to go until the beginning of the government’s expansion of funded hours, Jeremy Hunt said he would “guarantee” the rates that will be paid to nurseries and childminders.

He committed to increasing the amount paid to providers over the next two financial years, worth an estimated £500m.

As the government will soon be paying for more than 80% of childcare hours in England, the Institute for Fiscal Studies says a two-year guarantee “isn’t much”.

Early years charities warn the rate for three-and-four years olds is still not enough and has not been for many years, resulting in the current staffing crisis and the closure of many nurseries.

“As always, the devil will be in the detail” they say as they wait to hear exactly how much it will be in practice and if it will be enough for the struggling sector.

Joe MakinCopyright: Joe Makin

Watching the Budget, ready to give us his reaction was Joe Makin, 23, who earns £22,000 a year working in admin and rents a one-bedroom house in Selby, North Yorkshire.

The 2% National Insurance (NI) cut announced today means he will keep £188 a year more of his salary, or just over £15 a month.

However, the NI cuts announced last autumn and today, combined with the income tax threshold freezes between 2021 and this April, mean that people earning £22,000 will still be over £150 a year worse off overall.

Joe says: "Each month I earn about £1,600 after tax. Maybe £1,000-£1,100 of that goes on rent and bills.

"The National Insurance cut for me is so negligible it's going to make little difference to me, but its scalable so for others it's a step in the right direction.

"But as usual it never tends to go far enough for me. I was waiting for [the chancellor] to say 'And...' but it never came.

"I don’t think it goes far enough for people who are worse off than me as the cost of living crisis is still very present."