Budget 2023: Key Points and Live Reaction as Jeremy Hunt delivers his Budget in the Commons


  • The Office for Budget Responsibility (OBR) now expects that the UK will narrowly avoid going into technical recession in 2023
    • The economy is expected to shrink by 0.2%, but will not contract for two three-month periods in a row, which is the generally accepted measure of a recession
  • Inflation is expected to more than halve, dropping to 2.9% by the end of the year says OBR
  • Chairman of the OBR, Richard Hughes also said that real household disposal income per person will fall by 6% this financial year and again in 2024
    • “That would represent the largest two-year fall in living standards since records began in the 1950s,” he says


  • Energy subsidies that limit the typical household bill to £2,500 are to be extended through June 2023, they were originally due to expire later this month
  • £20bn investment in low-carbon energy projects, focusing on carbon capture and storage, but none of this will be enacted before the next general election
  • Nuclear energy reclassified as environmentally sustainable for investment purposes, and a promise of more government funding
  • £200m investment to bring energy charges for pre-payment meters in line with those paying by direct debit


  • Parents (of children aged 9 months to five-years-old) working 16 hours a week will get 15 hours of free childcare
    • From September 2025, every single working parents of a child under five years old will have access to 30 hours of free childcare per week
  • £600 incentive payments to encourage people to become childminders, and a relaxation of rules allowing childminders in England to look after more children at once

Taxation and Pensions

  • £1.07m cap on pension savings that a person can accumulate before being subject to extra taxes is to be abolished
    • Critics contend that this a tax cut that will benefit the rich, but the government suggest it will allow them to retain more NHS doctors who may retire early after reaching the current pension threshold
  • Tax-free yearly allowance for pensions to rise from £40,000 to £60,000
  • Alcohol taxes to rise in line with inflation
  • There will be tax relief of 11p on draft drinks served in pubs
  • 5p cut to fuel duty extended for a year, it had been due to expire in April, this will cost £6bn


  • New fitness-to-work testing regime to qualify for health-related benefits
  • Immigration rules to be relaxed for five roles in construction industry, to ease labour shortages
  • Funding for up to 50,000 places on a voluntary employment scheme for disabled people, called Universal Support
  • A ‘returnership’, a new form of apprenticeship will be introduced, aimed at giving people 50 years or older a chance to learn new skills after leaving the workforce in the hopes that they will return


  • Corporation tax on profits will rise from 19% to 25% in April, but businesses will be able to offset any UK investment against their profits to cut down their tax bill
  • Small and medium businesses can claim credit of £27 on every £100 spent on research and development if it accounts for 40% or more of their total expenditure

Other measures

  • Defence spending will rise by £11bn by 2028, the current budget is around £50bn.
  • Variety of increased funding for various research and development projects, including supercomputing and artificial intelligence

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