Spring Budget 2023

March, 2023

The 2023 Spring Budget marks the first full Budget statement since 27 October 2021 and the first under Rishi Sunak’s leadership. Jeremy Hunt’s only other financial statement was in Autumn 2022, when he rolled back on most of Kwasi Kwarteng’s ‘Growth Plan’ in order to stabilise the economy.

Since then, the economy has stabilised, with the UK avoiding a technical recession with a contraction of 0.2% and inflation is predicted to fall from 10.7% to 2.9% by the end of 2023. Despite the economy being more resilient than expected, it will remain weak through 2023, with the cost-of-living crisis leading to lower consumer spending.

In the weeks leading up to the Budget, Jeremy Hunt has come under pressure from some within his own Party to cut taxes. This growing backbench concern was driven by the proposed rise in corporation tax from 19% to 25%, the first rise since the Conservatives entered government in 2010 though still the lowest rate in the G7. Hunt hopes that his announcement of a £4bn expansion of 30 hours of free childcare to one and two year olds will prove popular with the electorate and dampen any backlash around not cutting taxes.

Last week saw the Department for Transport announce delays to HS2, with the initial services between Old Oak Common and Birmingham Curzon Street being prioritised while delaying the rest to ensure a manageable overall spending profile. The Lower Thames Crossing construction will be rephased by 2 years with the same aim in mind.

With the next General Election fast approaching, the Conservatives and Labour will also be playing the blame game, with Labour saying the recent economic turmoil is due to Conservative incompetence. The Government has pointed to the series of crises it has faced, such as Russia’s invasion of Ukraine and the COVID-19 pandemic, contrasting their economic management through uncertain times to Labour governments of the past.

The key areas we will focus on in this booklet are:

Transportation: The Government plans to invest in transportation infrastructure, including upgrading existing roads and highways, expanding public transportation networks, and investing in new transportation technologies such as electric vehicles.

Energy: The UK has committed to having a net zero energy grid by 2035. This includes expanding wind and solar power generation, opening up investment for nuclear and funding for Carbon Capture and Storage, and upgrading the country’s energy grid.

Housing: The UK is facing a housing crisis, with many people struggling to find affordable homes. The Government has pledged to invest in affordable housing and infrastructure, such as roads and public transportation, to support new housing developments.