CHANCELLOR Jeremy Hunt will unveil his first Budget on Wednesday while households continue to struggle with the cost of living crisis and soaring inflation.
It’s his second fiscal statement since taking up his post – with the first in November used to reverse most of the measures in the disastrous “mini-budget” from his predecessor Kwasi Kwarteng which triggered economic chaos.
Ahead of Hunt setting out his Budget at 12.30pm, we take a look at some key points to look out for.
Pressure for more energy help
The government had planned to raise the Energy Price Guarantee (EPG), which sets maximum prices for gas and electricity, to £3,000 a year from April. There is speculation it may instead keep to the current limit - an average yearly bill of £2,500 - until the summer.
But Hunt is being urged to do more, with the £400 Energy Bill Support Schemes (EBSS) available for all households coming to an end this month.
A dramatic fall in the price of wholesale electricity in recent months also leaves the UK Government with more fiscal flexibility.
The SNP has called for the UK Government to reduce the EPG to £2,000 and continue the EBSS payments through until the summer.
Stewart Hosie, the SNP’s economy spokesman, said: “This Budget is all about choices.
“The Chancellor has the resources and fiscal levers needed to slash household energy bills and raise public sector pay and benefits by inflation.
“There is no excuse not to act, when people’s incomes are being hammered by the Tory cost of living crisis.”
'Back to work budget'
One major focus of the Budget is expected to be a drive to get more people back to work, in particular the over 50s, long term sick and disabled and benefits claimants.
Some reports have suggested Universal Credit is one area which will be targeted, with claimants expected to have more regular meetings with work coaches or increase their hours, for example.
The Chancellor is reported to be considering allowing workers to put more money into their pension pot before being taxed as part of his Budget package.
The increase in the lifetime pension allowance (LTA) in a move that is being interpreted as attempting to reverse the trend of early retirement among professionals such as doctors.
The lifetime allowance currently stands at £1.07 million, with savers incurring tax after that personal pension pot threshold has been exceeded.
It is also understood that the Budget could see the annual allowance rate for pensions increased, with the amount each person can save each year before incurring tax was likely to rise from £40,000 to £60,000.
A rise in pension age?
Earlier this year it was suggested the UK pension age is likely to rise to 68 sooner than expected, which would see millions of people born in the 1970s onwards having to work for longer before accessing their state pension.
A report claimed Hunt could announce the change in the spring Budget, which could see the state pension age rising by the 2030s.
The UK Government has to regularly look at the state pension age and the results of the latest review are expected in May.
Currently it is due to rise from 66 to 67 by 2028, with the next increase to 68 not due to happen until the mid 2040s.
The Department for Work and Pensions recently confirmed a review is underway, but whether Hunt will announce anything yet remains to be seen.
The SNP’s social justice spokesperson, David Linden MP said: “The Tories should completely scrap their plans to increase the pension age, a move that would force millions of people to work even longer before getting to enjoy their retirement.
“Failure to do so would be a further betrayal of Scotland’s older people, who already, thanks to the UK Government, receive one of the lowest pensions in north-west Europe, have had their free TV licences revoked and are seeing unsustainable rises to their cost of living.”
'Supercharging' tech industries
Hunt will unveil plans for 12 new investment zones to “supercharge” growth in hi-tech industries.
Officials said the scheme – backed by £80m of investment over five years in each of the new high-growth zones – is designed to accelerate research and development in the UK’s “most budding industries”.
Eight areas in England have been shortlisted – the East Midlands, Greater Manchester, Liverpool, the North East, South Yorkshire, the Tees Valley, the West Midlands and West Yorkshire.
The Government is also in discussions with the devolved administrations over how investment zones can be established in Scotland, Wales and Northern Ireland – accounting for the four final locations.
Hunt will also set out plans to accelerate the growth of “high-potential innovation clusters” in Glasgow, Greater Manchester and the West Midlands, with £100 million of investment in 26 research and development projects.
Fuel duty freeze
The UK Government has been under pressure to keep the fuel duty freeze of the past 12 years and retain a 5p cut in petrol and diesel which was announced by Rishi Sunak last March for 12 months.
Fuel duty was on course to rise by 12p this April and the Treasury could face a bill of around £5-6 billion to keep it at current levels.
Some have argued this money could be used instead to offer striking public sector workers a bigger pay rise.
