A lack of Budget excitement among Tory MPspublished at 11:43 Greenwich Mean Time 7 March

11:43 GMT 7 March

Henry Zeffman
Chief political correspondent

Jeremy Hunt’s Budget has been reasonably well-received by Conservative MPs. But certainly not spectacularly well-received.

Part of that is probably in the sequencing. The simple fact is that the chancellor’s immediate audience already knew about the biggest announcement - the 2% cut in National Insurance - and nothing came along to overtake that.

It’s also the case that a lot of Tory MPs had been hoping for an income tax cut, believing that would be an easier, more straightforward sell on the doorstep in a general election. Ultimately the chancellor decided that this was not possible within his own fiscal rules and the broader economic environment.

“Average”, “solid”, “relatively good” were three of the phrases offered up by MPs when I asked for their reaction - all strikingly mild adjectives.

It’s been the case for a while that even when fairly big political events happen, many Conservative MPs seem resigned to them rather than exercised by them. That’s a source of frustration for some of PM Rishi Sunak’s supporters, who believe the election is still in play and MPs should behave accordingly.

The Budget didn’t do enough to shake those MPs out of their political stupor.

We've some more now from Paul Johnson, head of the Institute for Fiscal Studies think tank, who says MPs aren't being upfront with the public in the lead up to the next general election (remember - one needs to happen by January).

"Government and opposition are joining in a conspiracy of silence in not acknowledging the scale of the choices and trade-offs that will face us after the election," Johnson says in his analysis of the Budget, adding: "They, and we, could be in for a rude awakening when those choices become unavoidable."

The IFS director says he's as sceptical about Chancellor Jeremy Hunt’s ability to stick to his current spending plans, as he is about shadow chancellor Rachel Reeves enacting deep cuts in public service spending.

Questioning Hunt’s balancing act, Johnson says additional revenue that's expected from moves such as the abolition of non-dom tax - which Hunt said could raise £2.7bn - is uncertain, whereas costs of the announced cuts are certain:

Turning to economic growth, Starmer is asked whether Labour will support more migration, after the government's financial watchdog said migration was key to hitting growth targets outlined in Hunt's Budget.

Starmer says the government's "only plan for growth is migration" and "they've got to explain and be honest to the public" about that.

He says the way to grow the economy is to have a "long-term, strategic plan".

Starmer highlights the need to deal with planning, supply chains and "making sure that the government can ensure that private investment comes in".

Growth will only happen if we have economic stability, he continues, and commits Labour to "tight fiscal rules" with "no unfunded commitments - the complete opposite of what we saw yesterday".

We're now hearing from Labour leader Sir Keir Starmer. He says it is "humiliating" that the government have stolen Labour's policy of abolishing the non-dom tax regime.

"How humiliating was that for the government yesterday?" He says it shows that the government is "completely out of ideas".

Starmer is then pushed on where he would get the money to fund pledges in Labour's manifesto - now that the Tories have used the non-dom revenue to help fund tax cuts.

"Nothing in our manifesto will be unfunded and un-costed, that's an iron rule for the Labour party," the leader says

He then goes on to attack the chancellor, after Jeremy Hunt implied it was his ambition to one day abolish National Insurance entirely. The Labour leader called this a £46bn "unfunded commitment" that he described as "staggering".

People across the UK have been weighing in on the Budget this morning over on 5 Live, in particular whether the measures proposed will equal more money in the pocket.

Calum in Hull who is married with two kids, said the child benefit changes is “a benefit to me and my family”.

He said the proposed changes work out to a saving of around £40 per month: “Selfish wise, I’ve done quite well out of this budget. My wife on the other hand hasn’t had any benefit," he said.

For Chris in Torpoint, the National Insurance reduction will give him £140 a month extra, but that his internet, phone, council tax and water bills are all expected to rise.

“It’s not really making much difference at all,” he said.

As we reported earlier, there was a spiky exchange between Chancellor Jeremy Hunt and the BBC's Amol Rajan on the Today programme this morning.

"We're hooked on foreign labour, the birth rate is collapsing. Many public services are creaking, councils are going bust, " Rajan said.

"The overall characterisation that you've just given of the British economy is unworthy of the BBC," Hunt replied.

Watch how it developed below...

We're hearing now from Paul Johnson, head of the Institute for Fiscal Studies (IFS), who's commenting on the Budget for the first time since it was announced.

Overall, he says, "nothing that Jeremy Hunt did yesterday, nor anything the OBR said, changes anything very significantly" - which he describes as a "shame".

The leading economic research group's director says 2024 could see a Parliamentary sitting in which people "will on average be worse off at the end than at the start" - and that we're still looking at:

• The highest debt to GDP ratio in 70 years

• Debt interest payments at close to all time highs
• A record rise in tax revenues as a share of national income over this parliament
• A government "implicitly planning" on big cuts in public investment spending
• Cuts to many areas of day-to-day spending on public services, despite obvious signs of strain

"All of that was true on Tuesday, and all of it remains true today," Johnson says. "In all likelihood it will still be true come the general election." The next election needs to take place by January.

Johnson is continuing to analyse the Budget, and what it means for you, which you can follow live by tapping the Play button at the top of this page.

This morning has been full of analysis around the all the different things Jeremy Hunt announced in the Budget yesterday.

The team at Newscast, Adam Fleming and political editor Chris Mason, alongside BBC economic brains Dharshini David and Faisal Islam, have been discussing what it all actually means for you.

• You can listen to the programme here

Image source, .

We've heard the government's independent forecaster, the Office for Budget Responsibility, mentioned a few times this morning.

On BBC Radio 4's Today programme, chairman Richard Hughes explained a few of the economic factors that have played into the Budget.

On tax, he said the amount of tax people are paying is rising, and has been since the Covid pandemic. The measures in the Budget mean they are rising less than they otherwise would have done.

People have been paying more thanks to "fiscal drag", which means more people paying higher rates as income tax thresholds have been frozen.

We'd heard already that the OBR has said migration needs to rise for the government to meet GDP growth targets.

On productivity, Hughes said a mixture of long-term trends and disruptions stemming from the pandemic have led to "disappointing" levels of productivity in the public sector.

Hughes said there was an imbalance on what they know about the government's spending plans on public services compared to the detail of tax policy in the Budget.

Having announced his Budget to MPs yesterday, Chancellor Jeremy Hunt has been out and about this morning defending his plans - with the shadow chancellor Rachel Reeves not far behind.

If you're just joining us, hello, and here's what you need to know:

• Hunt has given back-to-back interviews, insisting people on average earnings will be better off thanks to his 2p cut to National Insurance (NI). He said people would see a "significant reduction" in taxes - but acknowledged this would not bring back pre-pandemic levels
• The chancellor also said that the policies he announced would see an increase in gross domestic product (GDP) per head - and "I'm bringing down the tax burden by about half a percent of GDP," he told BBC Breakfast
• It wasn't all plain sailing, though. In a fiery exchange with Amol Rajan, on Radio 4's Today programme, Hunt fired back at the presenter's claim that the economy was "at best drifting, at worst stagnant" - calling it "unworthy of the BBC"

• Meanwhile, shadow chancellor Rachel Reeves - who also had a busy morning on the airwaves - accused the government of giving "with one hand yesterday, but taking much more with the other"
• Asked whether Labour would support the move to scrap NI altogether one day, Reeves said it would be a "bigger unfunded commitment to tax cuts than even Liz Truss and Kwasi Kwarteng tried"

Let's bring you some more analysis from Torsten Bell, CEO of the Resolution Foundation, a think tank focussing on people on lower incomes.

Bell suggests there will be a net tax cut of £9bn this year - but adds pensioners will lose more from the budget than workers.

"Pensioners don't pay National Insurance so they can't benefit from a cut," he told BBC Radio 4's Today programme.

"What we are seeing is quite big tax rises for pensioners, but the tax cut will go to the working age population and employees in particular and not, for example, landlords."

As we've been reporting these past two days, one of the reasons the government cuts National Insurance rather than income tax is that it costs less - as fewer people pay NI.

For example, a cut in the basic rate of income tax from 20p to 19p would cost the Treasury around £7bn a year. A 1p cut in National Insurance would cost the Treasury around £4.7bn per year.

The 2p cut announced yesterday will cost around £9bn - £10bn a year.

Image source, .

As we mentioned earlier, our correspondents will be holding a special Your Questions Answered session this afternoon.

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The interview between Hunt and Amol Rajan ends with some disagreement over the state of the UK economy.

Hunt's asked whether his Budget has come close to meeting the scale of the challenges, at a time when the British economy is "ravaged by economic shocks, at best drifting, at worse stagnant".

After praising his latest financial announcements as meeting those challenges, the chancellor takes issue with Rajan's characterisation of the British economy - calling it both "unworthy of the BBC" and of Rajan (presenting the Today programme) himself.

Rajan says his listeners will know that the average wage won't return to pre-pandemic levels until 2026 - they want "radical change," he tells the chancellor.

"I disagree," Hunt says, adding that Today programme listeners know the pandemic and Ukraine war were challenging for all Western economies.

And on that note, the interview comes to an end.

The government's spending plans are the next focus.

The chancellor says their lack of detail is because those plans are decided and reliant on the spending review.

He says he spent a good chunk of his Budget speech yesterday explaining to MPs what the government will be doing for the NHS, alongside other services, adding:

Amol Rajan pushes Hunt further on his promises of a more efficient NHS via digital upgrades, when previous attempts to upgrade the tech haven't resulted in increased productivity - nor big savings.

He reminds the chancellor of his own promise - during his time as health secretary - of a paperless NHS by 2018.

Hunt concedes that he didn't deliver that paperless promise, but says there is evidence that productivity has improved in the past and will now.

The chancellor points to the passport office as a great example of improved productivity.

Turning to productivity, Hunt is asked how public sector productivity differs from previous reviews commissioned in 2005, 2014, 2015, 2016 and 2017.

"Those were all important initiatives which bore results," Hunt says, before pointing to key developments since then such as an "AI revolution".

Hunt talks about digitising the NHS - he gives an example of operating theatres, which he says could mean an additional 200,000 operations each year.

We're on to the headline announcement from yesterday's Budget now.

Hunt says that people on average wages will see income taxes go up in the coming year by £230 - because they're not increasing thresholds - but he adds "they'll see their taxes come down because of the National Insurance cuts - by £900".

He says people will see a "significant reduction" as a result of the decisions he has taken - however he acknowledges that it won't bring levels back down to pre-pandemic.

This is to the start of a process, he tells the Today programme, and the government are doing it in a "responsible" way.

Image source, .

Hunt's now asked who he believes the "losers" are from yesterday's Budget, to which he says "foreigners who were residents in the UK", and were paying less tax than UK residents.

Staying on tax, Hunt says the Scottish oil and gas industry will need to pay an additional contribution.

The BBC's Amol Rajan says Hunt has been called the "fiscal drag queen of British politics" - a reference to frozen income tax thresholds, meaning more people pay higher rates as their pay goes up.

Hunt says the government decided to support families during the pandemic, and to do that taxes had to go up. He also says he's making an active choice to bring down taxes.

"I don't think I've been called a drag queen before Amol," the chancellor adds.

Moving on, the BBC's Amol Rajan asks about GDP projection - he says it's been downgraded in every year of the forecast.

Hunt disputes this, referring again to increases in migration and says his policies increase GDP per head - he points to his National Insurance cuts here.

The chancellor says welfare reforms are coming into place, as are childcare reforms to make it easier for parents to be able to get back to work.

The chancellor is being asked how his claim that growth can't come from unlimited migration marries up with the Budget handed down yesterday - given that the Office for Budget Responsibility says the growth figure can only be reached if net migration rises.

Jeremy Hunt tells Radio 4's Today programme he accepts that the UK has had exceptional reasons recently (Hong Kong, Afghanistan and Ukraine) that have brought exceptionally high levels of migration.

But, he adds, "that is not sustainable over the long term and we want to bring those numbers down".