Spring Budget 2024: programme for stability or missed opportunity?

Heed the warnings of the International Monetary Fund and the Institute for Fiscal Studies, and keep taxes steady? Or slash them and start spending to help put the party on an election footing?

The chancellor ended up somewhere in the middle – a clear symptom of the Conservative’s tricky political position.

This was not a day for surprises – far from it. As has become budget tradition, many of the key announcements had been well-briefed to the media, and were a mix of policies packaged together in a ‘budget for growth’.

The 2p cut to National Insurance and freezes to alcohol and fuel duty had been trailed several weeks beforehand. Even a potentially astute political move, pinching Labour’s clothes by abolishing non-domicile tax, emerged as what is being criticised as a watered down version.

Power (and money) to the regions

Devolution is one area where the governing party can be bold on its legacy, and following news in Liverpool City Region, West Yorkshire and South Yorkshire last week, further announcements on this will be welcomed as a magnet for regional investment.

Plans to provide the new North East Mayoral Combined Authority with a package of funding potentially worth over £100 million and level four status from the outset are a vote of confidence in the area, which will hold its first elections in May 2024.

The south east received its own share of investment, as £242 million from the government’s levelling up fund will be invested in parts of London – helping provide up to 7,200 homes in Barking, and a mixture of life sciences hubs, retail spaces, and housing in Canary Wharf.

Further devolution to Surrey, Buckinghamshire, and Warwickshire will help reshape political power in the wider south and midlands, and perhaps revealed concerns about Liberal Democrat performances in recent by-elections in these areas.

Onward march to net zero

There were themes in this budget which have carried over from Autumn 2023 – with Hunt re-confirming his party’s pledge to reach net zero by 2035, a delay from the government’s previous target of 2030.

Some progress was announced in the push towards clean energy, as the government confirmed that it has reached a £160 million agreement with Hitachi to purchase land in north Wales and south Gloucestershire to be used as nuclear sites – though no decisions have been made about specific projects on site. The windfall tax on North Sea oil was also extended until February 2025.

Local councils – tighten your belts

The message to local authorities in the budget documents didn’t make the chancellor’s speech, but he is clear: it’s time to tighten the belt and cut back spending.

After making £600 million available to councils last week, local government has been told to reduce spending on consultants and diversity schemes. The Local Government Association has criticised this characterisation, claiming that it is instead a deflection tactic to distract from structural issues and underfunding of local authorities over the past decade.

No surprises

The budget had little by way of specifics on affordable housing, and it failed to grasp long-term issues with local government funding, the NHS and social care.

In many ways, it felt like a missed opportunity – characterised by economic jeopardies and political realities.

After the chancellor sat down from the despatch box, and the cheers and stomps of the House of Commons quietened down, the question still lingered in the air. Is this enough?