Jeremy Hunt cuts National Insurance and extends child benefit in Budget

1. Chancellor Jeremy Hunt cuts workers' National Insurance by another 2p in the Budget, meaning it falls from 10% to 8%
2. He says the cut, to begin next month, is worth £450 a year for the average worker
3. Hunt also increases the child benefit threshold from £50,000 to £60,000
4. Labour leader Keir Starmer calls the Budget a "last desperate act" with people paying "more and more for less and less"
5. New official forecasts say the government will collect 37.1p per pound of GDP in 2028/29 - the highest level in nearly 80 years
6. Hunt also increases the VAT threshold for small businesses to £90,000, and announces higher taxes on vapes and business class flights
7. And he says he's "abolishing" the "non-dom" tax system, but new arrivals to the UK will still not pay taxes on foreign income for four years
8. Speaking to the BBC’s political editor Chris Mason, Hunt confirms he is “making progress” towards abolishing NI altogether, but fails say whether income tax would be cut before the election

New support for theatre and film 'game-changing'

Yasmin Rufo

Culture reporter

Members of the theatre and film industry have called today’s budget announcement “game-changing”.

Hunt confirmed the tax relief for the theatre industry will not return to pre-pandemic rates and instead stay at 40% and 45% for productions on tour.

He also said the National Theatre would receive £26m of funding to upgrade its stages and infrastructure.

Similar positive measures for the film industry were announced. There is a new tax credit for independent UK films with a budget of less than £15m and eligible film studios in England will get a 40% relief on their gross business rates until 2034.

Lord Andrew Lloyd Webber described these announcements as "a lifeline for performing arts" which will "ensure Britain remains the global capital of creativity".

Getty Images

BBC Verify

Anthony Reuben

Has the government ‘maxed out the nation’s credit card’?

Responding to the Budget, Keir Starmer said the government had “maxed out the nation’s creditcard”.

Many commentators have warned that it is misleading to refer to the country’s finances in the same way as you would talk about a household's finances.

A good example comes from a review of the reporting of things like government spending and borrowing, which the BBC commissioned from Sir Andrew Dilnot, former chair of the UK statistics regulator.

“Household analogies are dangerous territory, intensely contested, and can easily mislead,” he warned.

Key differences include: “That states don’t tend to retire or die, or pay off their debts entirely”, he said.

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Government will meet its debt target - by a wafer thin margin

Dearbail Jordan

Business reporter

Today's report by the Office for Budget Responsibility - which accompanies the Budget - says that while the government will meet its self-imposed target of debt falling by a percentage of national income in five years' time, it will be by a "historically modest" margin of £8.9bn.

The OBR says that this is far lower than the average £26.1bn in headroom that chancellors have set aside against their own fiscal rules since 2010.

That could improve - 2029 is a long way away - but it could also worsen if, for example, conflict in the Middle East grows and pushes inflation back up.

BBC Verify

Anthony Reuben

Child benefit rules still not quite catching up with inflation

Since 2013, if you as a single parent earn more than £50,000, your child benefit starts being gradually withdrawn, such that if you earn £60,000, you don't receive any child benefit at all.

One of the big announcements from the chancellor was that from April that will change to it being withdrawn between £60,000 and £80,000.

That’s still not quite enough to keep up with what would have happened if those points had gone up in line with rising prices every year.

If that had happened, according to our analysis, parents would start losing child benefit at £67,714 and it would all be gone at £81,256.

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Budget announcement thwarts Scottish Conservatives' strategy

James Cook

Scotland Editor, BBC News

Last week, visiting the north-east of Scotland, the prime minister told me the Conservatives were the "only major party" supportive of the North Sea industry.

The leader of the Scottish Tory party, Douglas Ross, had intended to put this message front and centre in the forthcoming general election campaign.

After boundary changes, three of the six Scottish seats his party will be defending at the election are Aberdeenshire West & Kincardine; Aberdeenshire North & Moray East; and Gordon & Buchan — all with strong links to oil and gas.

The oil and gas industry had been campaigning hard against raising and/or extending the windfall tax on energy companies, insisting that tens of thousands of jobs were hanging in the balance.

And so the chancellor's decision to extend it by another year until 2029 has both upset the industry and scrambled Ross's strategy.

To highlight the problem, the Scottish Parliament is, this afternoon considering a Conservative motion which condemns "Labour's proposed extended windfall tax".

It's not difficult to see how that line of attack on Sir Keir Starmer's party will now be more difficult for Rishi Sunak and Ross to pursue.

What else was in the Budget?

We've already taken you through some of the key announcements from Jeremy Hunt's Budget - time now for the rest:

• The government will build more new houses for young people in Sheffield, Blackpool and Liverpool - plus 8,000 more in Canary Wharf

• And to help make household emergencies more affordable, the repayment period for new government loans for people on benefits was doubled

• Tax breaks making it more profitable for second home owners to let out their properties to holiday makers were scrapped - as was stamp duty relief for people who purchase more than one dwelling at once
• Meanwhile, north-east England was promised a new package of support, potentially worth over £100m, as part of a new devolution deal

• An extra £120m was allocated to grow the UK's green industries - and plans were set for the UK to become a "global-leader" in developing nuclear technologies

• Hunt also confirmed that the rate of tax credit available to the film industry would rise by 5% - and tax relief for touring and non-touring productions
• Medical research got an additional £45m investment - including £3m for work on cancer - and £3.4bn was put towards modernising IT systems at the NHS

• Finally, £1 million was allocated towards a Muslim war memorial, in the context of the "tragic loss of life in Israel and Gaza"

And we can hardly wrap up the session without mentioning quite how raucous the Commons was.

"Could you please shout more quietly?" was one of Deputy Speaker Dame Eleanor Laing's interventions.

'Changes to child benefit will make system fairer'

Shanaz Musafer

BBC business reporter

David Stuart

Dad-of-two David Stuart from Whitburn in Scotland welcomes the changes announced to child benefit.

"I'm glad they not just raised the threshold, which would have just kicked the can down the road, but it's absolutely the right thing to move towards it being household-assessed.

"Obviously it will take time but I understand that."

The income level at which people start being charged for receiving the benefit is going up from £50,000 to £60,000, and the level at which it is withdrawn completely is rising from £60,000 to £80,000.

David earns £70,000 and his wife earns £10,000. "I think that means that we could claim again and then potentially keep up to 50% of the benefit for the next couple of years, which seems positive.

"But the main thing is it’s fairer."

What does the budget mean for Scotland?

David Henderson

BBC Scotland Correspondent

This budget draws up the battle lines ahead of this year's general election.

In Scotland the divide seems stark - with the Tories offering cuts to personal taxation, while their SNP opponents insist spare funds should be invested in public services instead.

Both think their message is popular.

In last week's Scottish budget, the SNP government at Holyrood raised income tax rates for more highly paid Scots workers - claiming this delivered greater fairness.

But it’s not quite that simple.

The SNP also set out plans for a council tax freeze, which delivers a real terms tax cut for many of Scotland's home owners.

And the Chancellor's just announced an extension to the UK's windfall tax on the profits of oil and gas companies until 2029.

In this election year, that extra tax may be hard to sell on doorsteps in the energy capital, Aberdeen.

Meanwhile, this budget delivers £295 million of extra funding in so-called Barnett consequentials for Scotland – which means more scope for public spending, not less.

NHS funding announcement will be treated cautiously by health services

Nick Triggle

Health Correspondent

The chancellor announced funding of £3.4bn for a new NHS Productivity Plan, pointing out how outdated IT and equipment created inefficiencies in the health service.

Upgrading IT systems has been ongoing for years. What Hunt has essentially promised is that there will be a new vision, which by the way we are not expecting to be published for some months, and that this will be fully-backed from the capital budget over the coming three years – the bit reserved for buildings and maintenance.

But this still doesn’t give any indication about how much investment the NHS will get in buildings and equipment or services beyond next year, which is bound to be a key focus of the election campaign when it gets under way.

The NHS is facing a growing backlog in repairs to buildings and equipment – at last count it had topped £11bn.

This is why news of this investment will be treated cautiously by those in the health service.

Tax level still set to reach highest level since 1948

Robert Cuffe

Head of statistics

The government will collect 37.1p of every pound generated in the economy in 2028/29, according to today's forecasts from the government's spending watchdog, the OBR.

That will be the highest level in nearly 80 years.

Remember, this is the total tax take, not just personal taxes, national insurance or VAT.

It also includes taxes on, say, property sales, holiday lets and companies.

The OBR's current forecast is actually slightly lower than the forecast they made in November (37.7p of every pound generated in the economy).

One third of the 0.6p-per-pound fall between November and today's projections is due to measures announced by the government today.

The rest is due to changes in what's forecast to happen to the economy.

Will everyone be better off after the NI cut?

Dearbail Jordan

Business reporter

Paul Johnson, director of the Institute for Fiscal Studies think tank, says that people who earn between £25,000 to £50,000 will be better off after the latest 2p cut in National Insurance.

"They have lost from the income tax rises but they've gained more from those National Insurance cuts," he tells the BBC.

Overall, though, he says that OBR figures show that average incomes will be no higher at the end of this Parliament than they were at the beginning in 2019.

"That is pretty remarkable," he says.

Budget frame suggests a late general election

Faisal Islam

Economics editor

What we heard today suggests the chancellor and the prime minister are waiting for another OBR forecast and an opportunity for further tax cuts before going to the country.

Interest rates should be lower. Growth should be higher. Real household disposable income is now forecast to return to pre-pandemic levels in the next year. Cuts to energy bills will start to be felt. The Bank of England is expected to have started cutting interest rates too.

Economics do not always drive the politics, but despite the opposition daring the PM to call an election in May, the signals from today suggest it'll be in the autumn.

So… what was in the Budget?

Reuters

Here's a recap of the chancellor's major announcements:

• National Insurance was cut for workers by another 2p, from 10% to 8% – having already fallen by 2p in last year's Autumn Statement
• The earnings threshold for child benefit was raised to £60,000, from £50,000
• The windfall tax on the profits of oil and gas companies was extended until 2029, while capital gains tax was reduced for the higher rate of property from 28% to 24%
• And the non-dom tax break, claimed by wealthy foreign residents in the UK, was abolished - but new arrivals will still not pay tax on foreign income and gains for their first four years of UK residency
• The Household Support Fund for families in England was extended for six months, falling short of charities’ hopes of a two-year extension
• Alcohol duty was frozen and the 5p cut in fuel duty was extended
• The chancellor announced a new British ISA to encourage more people to invest in UK assets
• The VAT threshold for small businesses was increased, from £85,000 to £90,000
• And there will be new taxes on vapes, and higher taxes for business class flights

That's all from the House

We're turning our attention way from the Commons now. MPs are continuing to debate the budget though, and we'll bring you any major lines when we hear them.

Stick with us as we bring you more analysis and look across the country for reaction.

'Britain deserves better and Labour are ready' - Starmer concludes remarks

ParliamentTV

Starmer says the end result from the Tories is always the same - "a vicious downward spiral".

"Five more years and it will only get worse," the Labour leader adds, saying that the UK "deserves a government ready to take tough decisions".

"It's time to break a habit of 14 years," Starmer goes on to say, as he urges the chancellor and prime minister to "confirm 2 May as the date of the next general election".

Starmer says the the Budget should have been a last chance for the government to show it understands the economic reality of the world .

It "could have been a moment of contrition, an apology for the chaos they have inflicted," he says.

But, he adds, there is still no industrial strategy or growth fund, and no recognition that they have left the country "in tatters".

Starmer rounds on housing and childcare plans

Starmer says the Conservatives can no longer pose as the party of home ownership and aspiration.

Turning to childcare, he says the cost is a huge challenge to millions, and parents need the government to deliver on their promises.

With three weeks to go until April, will parents get the entitlements that were promised by the deadline? he asks.

He quips that the government have taken marketing directions from the Glasgow Willy Wonka experience.

Starmer attacks Sunak's record in Budget response

Henry Zeffman

Chief political correspondent

Sir Keir Starmer is using his speech to make political arguments about the prime minister and his record, not just Jeremy Hunt and this budget.

In a striking exchange, he questioned Rishi Sunak over the fact that in a spring statement as chancellor in early 2022 he promised to cut the basic rate of income tax by a penny by the end of this parliament.

The prime minister heckled back, by shouting “four” and holding up four fingers. That is to say, instead of cutting income tax by 1p he has cut national insurance by 4p.

But Starmer’s line of attack may play on some Conservative MPs’ concerns that an income tax cut would have been an easier sell in an election campaign.

Starmer says there is 'nothing technical about living in recession'

House of Commons

The Labour leader turns to the UK's current "technical recession". He says there is "nothing technical" about people living in recession.

He then brands it a "Rishi recession" and says the economy is stagnating and not growing.