On Wednesday 15th March, Jeremy Hunt will present the Spring Budget to Parliament. The Spring Budget will most likely centre on the government's goals to halve inflation, lower the national debt, and spur economic growth. The OBR, the Government's spending watchdog, will follow with the most recent economic and fiscal outlook.
Whilst we have to wait until Wednesday to find out the details of the Spring Budget, many people have been speculating what points are likely to come up and if any changes are going to happen.
Energy price support
On April 1, the Government's Energy Price Guarantee, which restricts household energy prices, is expected to increase from £2,500 to £3,000 in value. Furthermore, targeted support for businesses will increase.
Despite lowering energy costs, consumers will experience an increase in their energy costs of several hundred pounds this year as government support is reduced.
Mr Hunt has made it clear that he opposes general support. If he modifies the guarantee, he might adopt a more means-tested approach.
Fuel duty cuts
In April, fuel duty is expected to increase by RPI inflation, bringing the cost of a litre of fuel up by 7p. The temporary 5p fuel duty cut, announced in March 2022, is also due to expire this March.
Due to these two factors, fuel duty will cost an extra 12p per litre or 23% more.
Quite likely, Mr Hunt will intervene and stop this. Since 2011, every chancellor has cancelled the RPI fuel duty increase. Quite likely, Mr Hunt will intervene and stop this.
According to reports, Mr Hunt has acknowledged that there is a "strong precedent" for maintaining the freeze and is eager to maintain the 5p cut as long as it is obvious that inflation is declining.
Getting early retirees back to work
According to Treasury officials, a significant obstacle to economic growth is the number of unemployed individuals. It not only hinders production, but it also increases inflation. Employers must raise wages to recruit workers due to a staffing shortage, which raises prices.
More than a million of the 6.6 million economically inactive persons have retired early.
In order to promote and keep older workers in the workforce, Mr Hunt, who has personally encouraged over-50s who have taken early retirement to return to work, is anticipated to announce new initiatives.
The government is considering extending its "midlife MOT" programme to include examinations on financial well-being for people 50 to 64 years old. Another choice may be to provide senior doctors with a tax advantage by increasing the lifetime allowed for their pension.
Presently, both men and women are eligible to begin receiving their state pensions at age 66. It is anticipated to gradually rise to 67 between 2026 and 2028, then to 68 between 2044 and 2046. However, sources indicate that a study of the state pension age will consider increasing to 68 in the middle of the 2030s.
Getting long-term sick back into work
Long-term sick people make up 2.5 million economically inactive people, and Mr Hunt intends to help many of them find employment.
A crackdown on sick notes is one of the planned policies. In an effort to encourage workers to continue working with support rather than completely withdrawing from the labour field, the Treasury has been collaborating with the Department for Work and Pensions to modify how Doctors issue sick notes.
Rebooting the benefits system is another option for the government. This will allow sick people to return to part-time employment and continue to receive certain some sickness benefits.
An estimated 1.7 million parents are staying at home to care for their kids. Access to childcare has consistently been mentioned by think tanks as one of the most important and easily resolvable problems that the government might address.
Investment incentives are expected to be eliminated along with an increase in corporation tax. On March 31, the corporation tax super-deduction, which enables companies to reduce their tax liability by 25p for every £1 invested, will come to an end.
The tax raid is one of the biggest hazards facing business this year, according to business executives. Three past chancellors have stated that continuing in a "drastically anti-investment trend" will send Britain in the wrong direction, according to telecoms major BT.