Spring Budget 2023 speech

Spring Budget 2023 speech as delivered by Chancellor Jeremy Hunt.

Madam Deputy Speaker, in the face of enormous challenges I report today on a British economy which is proving the doubters wrong.

In the autumn we took difficult decisions to deliver stability and sound money.

Since mid-October, 10-year gilt rates have fallen, debt servicing costs are down, mortgage rates are lower and inflation has peaked.

The International Monetary Fund says our approach means the UK economy is on the right track.

But we remain vigilant, and will not hesitate to take whatever steps are necessary for economic stability.

Today the Office for Budget Responsibility forecast that because of changing international factors and the measures I take, the UK will not now enter a technical recession this year.

They forecast we will meet the Prime Minister’s priorities to halve inflation, reduce debt and get the economy growing.

We are following the plan and the plan is working.

But that’s not all we’ve done.

In the face of a cost-of-living crisis we have demonstrated our values by protecting struggling families with a £2,500 Energy Price Guarantee, one-off support and the uprating of benefits with inflation.

Taken together, these measures are worth £94 billion over this year and next – one of the largest support packages in Europe.

That averages over £3,300 of cost-of-living help for every household in the country.

Today, we deliver the next part of our plan.

A budget for growth.

Not just the growth that comes when you emerge from a downturn.

But long term, sustainable, healthy growth that pays for our NHS and schools, finds jobs for young people, and provides a safety net for older people all whilst making our country one of the most prosperous in the world.

Prosperity with a purpose.

That’s why growth is one of the Prime Minister’s five priorities for our country.

I will deliver that today …

…by removing obstacles that stop businesses investing;

…by tackling labour shortages that stop them recruiting;

…by breaking down barriers that stop people working;

…and by harnessing British ingenuity to make us a science and technology superpower.

Meeting the Prime Minister’s priorities

I start with the forecasts produced by Richard Hughes and his team at the independent Office for Budget Responsibility whom I thank for their diligent work.

They have looked in detail at the Prime Minister’s economic priorities.

Halving inflation

The first of those is to halve inflation.

Inflation destroys the value of hard-earned pay, deters investment and foments industrial strife.

This government remains steadfast in its support for the independent Monetary Policy Committee at the Bank of England as it takes action to return inflation to the 2% target.

Despite continuing global instability, the OBR reported today that inflation in the UK will fall from 10.7% in the final quarter of last year to 2.9% by the end of 2023.

That is more than halving inflation.

High inflation is the root cause of the strikes we have seen in recent months.

We will continue to work hard to settle these disputes but only in a way that does not fuel inflation.

Part of the fall in inflation predicted by the OBR happens because of additional measures I take today.

Firstly, I recognise that even though wholesale energy prices have been falling, there is still enormous pressure on family finances.

Some people remain in real distress and we should always stand ready to help where we can.

So after listening to representations from Martin Lewis and other experts, I today confirm that the Energy Price Guarantee will remain at £2,500 for the next three months.

This means the £2,500 cap for the typical household will remain in place when energy prices remain high, ahead of an expected fall in prices from July.

This measure will save the average family a further £160 on top of the energy support measures already announced.

The second measure concerns over four million households on prepayment metres.

They are often the poorest households, but they currently pay more than comparable customers on direct debit. Ofgem has already agreed with suppliers a temporary suspension to forced installations of prepayment metres.

But today I go further, and confirm we will bring their charges in line with comparable direct debit charges. The energy premium paid by our poorest households is coming to an end.

Next I have listened to representations from the hon members for East Devon, North Cornwall, Colne Valley and Central Suffolk and North Ipswich about the risk to community facilities, especially swimming pools, caused by high costs. When times are tough, such facilities matter even more.

So today I am providing a £63 million fund to keep our public leisure centres and pools afloat.

I have also heard from my RHF the charities minister and his Secretary of State about the brilliant work third sector organisations are doing to help people struggling in tough times.

They can often reach people in need that the central or local government cannot, so I will give his department £100 million to support thousands of local charities and community organisations to do their fantastic work.

I also note the personal courage of one of my predecessors, my RHF from Bromsgrove, in talking about the tragedy of suicide and the importance of preventing it.

We already invest a lot in this area, but I will assign an extra £10 million over the next two years to help the voluntary sector play an even bigger role in stopping more families experiencing such intolerable heartache.

My penultimate cost of living measure concerns one of our other most treasured community institutions, the great British pub.

In December, I extended the alcohol duty freeze until 1 August, after which duties will go up in line with inflation in the usual way.

But today, I will do something that was not possible when we were in the EU and significantly increase the generosity of Drought Relief, so that from 1 August the duty on draught products in pubs will be up to 11p lower than the duty in supermarkets, a differential we will maintain as part of a new Brexit pubs guarantee.

Madam Deputy Speaker, British ale may be warm, but the duty on a pint is frozen.

And even better, thanks to the Windsor Framework negotiated by my RHF the Prime Minister, that change will now also apply to every pub in Northern Ireland.

Finally, I have heard the representations from the Honourable Member from Stoke on Trent North, my Rt Hon Friend for Witham and my Rt Hon Friend from South Thanet and the Sun newspaper about the impact on motorists of the planned 11p rise in fuel duty.

Because inflation remains high, I have decided now is not the right time to uprate fuel duty with inflation or increase the duty.

So here’s what I am going to do: for a further 12 months I’m going to maintain the 5p cut … and I’m going to freeze fuel duty too.

That saves the average driver £100 next year and around £200 since the 5p cut was introduced.

Our Energy Price Guarantee, fuel duty and duty on a pint – all frozen in today’s budget.

Something that doesn’t just help families, it helps the economy too because their combined impact reduces CPI inflation by nearly ¾% this year, lowering inflation when it is particularly high.

[[Source]]: https://www.gov.uk/government/speeches/spring-budget-2023-speech