Spring Budget 2023: News and opinion round-up

The Guardian – Hunt’s ‘budget for growth’ gives top 1% a pension bonus but ignores public services

The Guardian reports on Hunt’s “only big surprise of the budget” – removing the cap on tax-free pension savings.

“Someone with a £2m pension pot will get a tax cut of £275,000 when they take their tax-free lump sum as a result of the change,” The Guardian reports.

Also in The Guardian’s budget wrap: childcare, public services and corporations.

“Almost half of Hunt’s giveaway was spent on a three-year tax break to stimulate business investment following the increase in corporation tax from 19-25% that will come into force next month. Firms will be able to write off 100% of their capital spending against tax, costing the Treasury more than £10bn in 2024-5.”

Read more at The Guardian.

Reuters – Analysis: UK voters unlikely to share Hunt's budget optimism

Hunt has attempted to portray an economy heading into a rebound, Reuters reports, with the avoidance of a technical recession boosting spending on childcare, energy subsidies and business investment.

“The big picture for the world's sixth-biggest economy remains one of weak growth and high debt, offering little room for fiscal manoeuvre to a government fighting to turn around its weak standing in opinion polls before an expected 2024 election,” Reuters reports.

“A snap opinion poll suggested voters were sceptical about the Conservatives' latest plan – among 3,100 people surveyed immediately after the budget by YouGov, only three in 10 thought it would be good for the economy.”

Read more at Reuters.

BBC – Budget 2023: Jeremy Hunt insists plans will get people back to work

The BBC has Hunt defending his scrapping of the tax-free pension savings cap against criticism that it will benefit the top 1% while doing little to get over-50s back into the workforce.

“The chancellor told the BBC he wanted to fill a million vacancies across the UK so firms can ‘grow faster’,” in the BBC’s reporting. “Labour has said it will reverse the pension move if elected, calling it a ‘tax cut for the top 1%’.”

Read more at the BBC.

AccountingWeb – Chancellor throws small R&D lifeline to SMEs

The fears that last year’s reduction in the rates of R&D relief would reduce SME investment will be partly allayed, AccountingWeb reports, by the Spring Budget’s measures for ‘R&D-intensive SMEs’ – those that direct at least 40% of their total expenditure to R&D.

“This is a small concession that will help some SMEs so it is welcome,” AccountingWeb reports. “Unfortunately, many more SMEs will still have to deal with a significant reduction in the relief they can claim for undertaking R&D activity in the UK.”

Read more at AccountingWeb.

STV News – Chancellor accused of delivering ‘historic blow’ to whisky industry

While pubs will be largely pleased with the Budget’s draught alcohol duty relief, STV News reports the Scottish Whisky Association’s (SWA’s) response to an upcoming increase in alcohol duties, which had been frozen since December.

After 1 August, alcohol duties will follow inflation, increasing 10.1%, despite the industry body calling for an extension to the freeze, STV News reports.

“This is an historic blow to the Scotch whisky industry,” STV News quotes SWA chief Mark Kent.

“The largest tax increase for decades means that 75% of the average-priced bottle of Scotch whisky will be collected in tax, reducing already tight margins for an industry which employs tens of thousands of people and invests hundreds of millions annually across the UK.”

Read more at STV News.