cover image: BRIEFING - Back for more? - Putting the 2024 Spring Budget in context


BRIEFING - Back for more? - Putting the 2024 Spring Budget in context

7 Mar 2024

The now 4p cut will take the basic rate of NI to its lowest level since the 1980s in April, handing workers gains of up to £1,500 next year (2024-25) with 78 per cent going to the top half of the household income distribution. [...] Stepping back, then, the key pressure facing the public finances over the coming years is not one of high underlying borrowing (from 2024-25, the primary deficit is set to be the lowest it has been since the millennium), but of high levels of debt, and the high costs associated with servicing it. [...] As Figure 14 shows, the typical household is set to gain £510 as a result of the tax cuts announced at the Budget, but the gains are skewed towards richer households, with households in the top income quintile set to gain around seven times the amount of households in the lowest income quintile (£990 versus £150).6 These large increases in income for high-income households are driven by the Nation. [...] In 2027-28, average from changes such as the households in the bottom fifth of the change to the HICBC and the cut to income distribution are set to gain the UC taper rate; households headed by £840 on average, largely thanks to by someone aged 18-45 will gain £590 benefit changes announced earlier on average.11 We can also look at how this Parliament, such as cutting the UC the gains and losses v. [...] Between the start of the next Parliament in 2024-25 and the end of the forecast period in 2028-29, capital spending as a share of GDP is set to fall by one third, equivalent to a £26 billion cut relative to holding investment fixed at its current level of GDP.
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United Kingdom