AELP Briefing on Budget 2023
Following the turbulent fiscal statements delivered last autumn this budget set piece was always going to be a more low-key affair. The Chancellor has very little fiscal headroom available and is intent on bringing the public finances back into line over the next five years. With little wiggle room in the public finances, this budget was never going to be one with major tax and spend giveaways. In fact, the trend of tax rises under this government has continued, with the planned rise in corporation tax from 19% to 25% maintained alongside a freeze in the personal tax allowance for individuals.
Chancellor Jeremy Hunt outlined his four pillars for economic growth – Everywhere, Enterprise, Education and Employment. However, if we are looking for a unifying theme underlying much of the budget, it would be about ‘long-term healthy growth’ and ‘returning to work’. Since the COVID pandemic the number of economically inactive people in the UK economy has risen 1.1% to 21.3%, and unlike many other European countries this number has not returned to pre-pandemic levels.
Therefore, the Chancellor has announced measures to encourage people to reenter the labour market, with investment in childcare, pension reform and announcements on skills investment for those over 50.