Spring Forward

A brief outline of key headline points featured in Jeremy Hunt’s 2023 Spring Budget


Economic Overview

There’s no getting away from the fact that we are in unprecedented times and if recovering from a global pandemic wasn’t tough enough, we have the largest European conflict since world war two and the consequential impact on energy and supply of goods.

Jeremy Hunt stepped in as Chancellor at a time of a crisis in the Conservative party and the job brief would’ve been to “steady the ship”. Whatever your political view we are at least still looking at the same Chancellor who at least earns credit for consistency, breaking the trend for his immediate predecessors.

We can only hope that the in-fighting is not distracting from the core of Mr Hunt’s day job and tackling what can accurately be described as a sizeable mountain to climb.

When’s a recession not a recession?

The good news, according to the Office for Budget Responsibility (OBR) and gleefully quoted by Mr Hunt, is that we will not enter a recession this year.  It might only be by the skin of our teeth, as the economy will be shrinking by 0.2% but technically the UK will stay clear of triggering a recession.

2024 is expected to see a level of growth of 1.8% and 2.5% in 2025.

The all-so-damaging inflation rate that’s kept mortgage rates high and food shop spending on an escalating trajectory is set to calm down.  The predicted figure for the back end of this year is an inflation rate below 3% someway improved from 10.7%.

In November 2022, our standard of living was predicted to fall by 7%. With a few months of “steady as you go” steering and a fair wind of reducing energy costs, It’s now reduced to 6%.  Nevertheless, this drop in our standard of living is the largest noted since records began 70 years ago, in the early 1950s.

The OBR also predict with this economic backdrop that this year we could see house prices fall by 10%, but as we know all too well these predictions have been known to be unreliable and always subject to regional and demographic factors.

Here follow a few more headline points noted from today’s announcement.


  • Businesses earning more than £250k annual profits from 1st April 2023 will now pay the top Corporation tax rate of 25% – Jeremy Hunt confirmed that this would only impact 10% of businesses trading in the UK. Nevertheless, this has been a contentious move given the pressures on businesses large and small.

Note: The rate of 19% holds for those with profits below £50,000 and marginal relief will apply to those with profits between £50k and £250k.

  • There’s an announcement of a new tax incentive for businesses available for the next 3 years. All business costs borne out of investing in new technology, plant and machinery can be used to offset profits to reduce their overall tax burden.
  • 12 new Investment Zones across the UK will benefit from tax breaks and support like that enjoyed by Freeport areas. Each English Investment Zone will have access to interventions worth £80 million over 5 years. Local government and research institutions will be able to tailor their Investment Zone plan to their local circumstances.
  • A move to address red tape in the form of reduced paperwork for international traders, they’ll also have more time to submit custom forms which suggests the streamlining is still very much a work in progress.
  • Over 50’s are a key target with the OBR predicting measures to bring more people into work could see a rise of employed 55k to 150k but the warn it will only be sustainable if the incentives remain.  It starts with £63m set aside for programmes to encourage retirees over 50 back to work, called “returnships” with skills boot camps for good measure.
  • Immigration rules relaxed for the construction sector with a focus on five key trades where skill shortages exist. Unfortunately, much to their frustration the scheme did not extend to the retail and hospitality sectors.
  • Occupational Health SME Subsidy Pilot – The government will expand a subsidy pilot scheme to support small and medium-sized businesses in England with the cost of purchasing occupational health services.
  • Consultation on occupational health tax incentives – The government will consult on options to increase investment in occupational health services by UK employers through the tax system.
  • Employment rights – The government is supporting a Private Members’ Bill that provides a day-one right to request flexible working and grant specific groups protections or leave entitlements, including enhanced redundancy protection for pregnancy, family leave, carer’s leave, and neonatal care leave.
  • There’s also a little more than “chat” regarding an investment of £900m for a “supercomputer” facility, to help UK’s AI industry.


  • The Energy Price Guarantee will now continue for another 3 months until the beginning of July 2023, ensuring fees do not exceed an annual bill of more than £2500.
  • Pensions – The pension cap aka the “lifetime allowance” (currently £1.07m) has been thrown away in a move to encourage early retiree professionals back into the world of work. A key focus, the medical profession, it’s severely under-resourced at this time. The removal of the cap frees early retirees to return avoiding repercussions of incurring taxable deductions on new contributions to their pension pot.
  • Pensions In addition, the annual cap on the permissible value of tax-free lump sum additions to pension pots has risen by 50% from £40,000 to £60,000.
  • Fuel duty reduction retained – we will continue to receive a 5p cut in fuel duty on petrol and diesel for another 12 months.
  • In a move to encourage us back to the pub, some of us might not need much encouragement, there will be new tax reliefs for beer, cider and wine sold in pubs meanwhile supermarket alcohol will see an inflation-based tax rise in August.
  • Mr Hunt announced free child care for children from 2024. Eligibility requires a parent and their partner each to earn a minimum of £152 a week but no more than £100,000 a year. This benefit will reduce child care costs by up to 60%. The English Care for Parents will be introduced in stages:
    • Working parents of two-year-olds will get 15 hours of free care from April 2024,
    • Children from nine months will get 15 hours of free childcare from September 2024
    • All eligible under-5s will get 30 hours of free childcare from September 2025

Other points of interest

  • The “hole” truth. £200m made available this year to help local councils in England repair potholes.
  • Additional £10m spread over two years for charities dedicated to helping prevent suicide.
  • We heard of a commitment to invest £20bn over twenty years supporting low-carbon energy projects, with a primary goal of improving capabilities in carbon capture and storage.
  • One of the biggest reactions during the Chancellor’s speech was the move to reclassify Nuclear energy as “environmentally sustainable” with a goal to secure 25% of UK energy being sourced from nuclear plants.

Caroline Lucas of the Green Party said the statement made her think it was April Fool’s day. The critical factor is what is to be done with the waste which is far from being an environmentally sustainable commodity.

The counterarguments speak of the practicalities and lack of attainable alternatives.

It’s seen as a major step in the move to meet the UK’s greenhouse gas emission net-zero targets. The reclassification also provides opportunities for financial assistance with developing solutions in utilising nuclear energy.

  • Keeping afloat – A sum of £63m has been set aside to help leisure centres with costs of keeping swimming pools heated and to assist in moving them toward greater energy efficiency.

As is often the case with a budget “the devil’s in the detail” and whilst these are headline items we suspect there may be more “breaking news” announcing tweaks and refinement applied to certain measures.  In the meantime, if you’ve got an hour or two to spare you could check out the full 122-page Spring Budget Report by clicking here .

Alternatively, if you are concerned about any of the items raised here or in the general news coverage of the budget please feel free to drop us a line.


Mogers Drewett

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