Jeremy Hunt had the most difficult of tasks today – maintaining Britain’s economic recovery but offering voters enough feel-good measures to help win a general election later this year.
He had to do all this while not triggering another spike in inflation but also trying to decrease the deficit in the polls for the Tories which stands at about 20 points behind Labour.
Inevitably, as there are with all Budgets, there were winners and losers – the issue was whether the winners for Hunt will ultimately outweigh the losers.
Many of the measures were leaked before and there were few surprises. But already MPs have a fair idea of where the battlegrounds need to be fought.
Here are some of the biggest winners and losers:
Winners: People who work for a living
The 2p cut in national insurance is great news for people who have to pay the tax because they have a job and are not of retirement age.
Even better news is the long term plan to scrap the “tax on jobs” in the long term and effectively simplify tax on income. In some ways, NI has been the invisible tax taking a chunk out of people’s wage packets.
It was designed by David Lloyd George to fund the state pension but has long been out of date.
Losers: The Middle Classes
You cannot hide the fact that the threshold of when people pay the 40p rate of income tax has been frozen yet again. It means more and more people on very average wages are being dragged into paying a higher rate of tax originally designed by Nigel Lawson in 1984 to hit the wealthy.
Wage inflation to match the cost of living crisis makes this even more of an issue. However, Hunt told Tory MPs that it would cost £18billion a year to raise the thresholds.
Add to this the decision to take away tax exemptions on second home holiday lets has hit people in the pocket on a profitable extra income.
Winners: The Admiral Pub in Ash Vale (and other hostelries)
Jeremy Hunt name-checked the Admiral Pub as he announced he was freezing alcohol duty to 2025 and helping to save the great British pub.
It seems unlikely that the Chancellor will be taking advantage of this soon due to his regime of preparing for the London Marathon but he may fancy a pint to celebrate when he crosses the line.
Losers: The super rich
The abolition of non-dom status may seem like a no-brainer but some have questioned whether it will rally bring in extra money for the Treasury or is just a political measure to spike Labour’s guns.
Remember until recently the Prime Minister’s wife Akshata Murty had non-dom status as did the former Tory Treasurer Lord Ashcroft until he took up his peerage.
Winners: People like Angela Rayner (allegedly)
Angela Rayner was less than impressed when Jeremy Hunt name checked her recent controversies over not paying capital gains tax on her house sale a few years ago. There are questions about whether she should have done.
But the reduction in Capital Gains Tax from 28 percent to 24 percent is quite a big deal, especially for people with second homes they want to get rid of – perhaps because they can no longer use them as holiday lets tax free.
While it is not a massive tax reduction it should see a lot more homes going on the market at a time when choice has been very limited, which is great news for house hunters.
Losers: Scottish Tory blushes
While the left and green lobby may hate the fact that licences for oil and gas have been extended, Jeremy Hunt clearly sees it as a chance to make a few bob for the Treasury as well as keep Britain self sufficient with energy.
This is why he has extended the so-called windfall tax on the oil and gas industry profits until 2029 despite objections from Scottish Conservative leader Douglas Ross.
Winners: Better off parents
Probably the biggest bonus came for parents who have been hit by the rule that they have to pay back child benefits if one of them earns £50,000 or more. This was increased to £60,000 and will help out many households.
Arguably it was his one pro-middle class measure.
Losers: MPs’ summer holiday plans
The Budget’s lack of dramatic measures all but eliminates the possibility of a May election and makes it highly likely they will be fighting one in October or November.
It pretty much means that the entire summer is likely to be transformed into a phoney election campaign ahead of the real thing being called in September. Instead of sunning themselves on beaches MPs will be delivering leaflets, knocking on doors and generally campaigning poor things.
(Bonus winners: The 59 Tory MPs who are standing down at the next election and will not have to worry about being re-elected).
