Budget 2024: Jeremy Hunt cuts National Insurance and reforms child benefit but tax burden still climbing

In his response to today's budget announcement, Labour leader Sir Keir Starmer has branded the statement as a "last desperate act of a party which has failed".

He accused the Conservatives of "delusion", adding: "Britain in recession - the national credit card is maxed out."

He also accused Hunt of "taking lessons on marketing from the Willy Wonka Experience in Glasgow", in a nod to the viral disaster event.

I'll start to bring you some reaction to the Budget, firstly from the IPPR think tank. Harry Quilter-Pinner, director of policy and politics, said: “Today’s slash-and-crash budget put politics before the needs of the nation. No one believes that future cuts to day-to-day spending are possible, or that squeezing public investment further is sensible, yet the government chose to slash taxes today at the expense of crashing public services tomorrow.

"With the NHS, pensions, childcare and defense spending likely to be protected, future spending plans imply big cuts across other key public services. This isn’t fiscally responsible, economically desirable nor politically popular. 

“The Chancellor has once again missed an opportunity to show that the government has a real plan to tackle the issues facing our nation. Growth remains low, people are struggling to pay the bills and our public services are crumbling.

"Yet today’s budget had few real answers to these pressing problems. We desperately need a real plan for shared economic growth, investment in our economy and net zero, and properly funded public services, supported by progressive tax reform.” 

As this was the Budget, Labour leader Sir Keir Starmer gave the opposition's response, however now the Shadow Chancellor Rachel Reeves has had her say as well.

Reeves said: “The Chancellor’s Budget has lifted the lid on 14 years of Tory economic failure. Taxes are still rising, prices are still going up in the shops, and mortgages are higher. Nothing Jeremy Hunt has said today changes that. It’s time for change. It’s time for an election."

The Social Market Foundation's director Aveek Bhattacharya said this Budget without "much to say" made the case for having one fiscal event per year. Currently there are two, the Autumn Statement and the Spring Budget.

Bhattacharya said: "Today’s Budget was a relatively low key affair, with the notable exception of the National Insurance cut. If anything, it demonstrated the case for reducing the number of annual fiscal events from two to one – having made a number of big consequential announcements in last year’s Spring Budget and Autumn Statement, and presumably wanting to keep some powder dry before the election, there didn’t seem to be very much to say.

"The two costliest announcements – cutting national insurance and freezing fuel duty – reflect questionable priorities, and the pressure such events generate to produce gimmicky ‘rabbits out of hats’ rather than that doing the responsible thing."

Watching on from high up in the House of Commons press gallery, I felt like I’d heard this Budget before. Jeremy Hunt told us that Conservatives want to cut taxes, they have a plan for growth and the economy has turned the corner. 

He said exactly the same thing in the Autumn Statement, yet since then the economy has gone into recession. Indeed, one announcement was identical to that of last November - the 2p cut in National Insurance. That didn’t change the polls - they say the definition of insanity is doing the same thing over and over again and expecting a different result.

While Hunt was bullish about cutting taxes, I got a slightly different impression from Treasury officials in the post-Budget briefing to journalists. They were talking about the huge expenditure that has gone out during Covid and the energy crisis, and having to cover that. That’s why the tax burden is still set to reach its highest level since 1948, despite what the Chancellor says in the Commons.

There were some eye-catching policies - the long-needed reform of child benefit which unfairly punishes parents and puts people off getting back into work. He also pledged to reform non-dom status less than a year after saying it was wrong. However, just like last autumn, the impact of this will be whether voters feel better off come election time - and all evidence is pointing in the opposite direction.