Spring Budget 2023: A summary

The Chancellor of the Exchequer, Jeremy Hunt, presented his 2023 Spring Budget to Parliament on 15 March and published documents with further details. Once the Chancellor finished his statement, the Office for Budget Responsibility (OBR) published updated forecasts in its economic and fiscal outlook.

As the Library briefing Background to Spring Budget 2023 explains, UK economic growth has been weak. High inflation has hit confidence and squeezed budgets, constraining the ability of households and businesses to spend. There are signs, however, that the economy is proving slightly more resilient than anticipated.

The Budget Speech

In his speech, the Chancellor said the Budget will tackle the UK’s productivity issues including having lower business investment and higher economic inactivity than other similar countries. He described it as a “Budget for growth”.

The Chancellor focused on the four pillars of his industrial strategy:

• Enterprise – supporting business
• Employment – encouraging more people into work
• Education – providing people with skills
• Everywhere – growth across the UK.

Tax and spending announcements

The Chancellor announced policies on:

• Childcare – including an extension to younger children of the 30-hours a week of free childcare currently available to many working families with three and four year olds.
• Benefits – a range of measures to support and encourage people into work. These include:
  • Work coach support will be extended to more people who are long-term scik and disabled. Work coaches gives advice, coaching and support to people, to help them secure a job.
  • People claiming Universal Credit will be required to agree and meet intensive work related conditions as part of their claim, by increasing the amount they need to earn before they have “light touch” requirements
  • Work search requirements for lead carers of children who are on Universal Credit will be expanded, expecting them to look for work or increase their working hours, with additional work coach support.
  • The application of sanctions for claimants who do not meet conditions agreed to as part of their claim will be strengthened.
  • A Transforming Support: The Health and Disability White Paper was also published alongside the Budget. This provides further details of plans for disability employment support announced in the Budget.
• Energy support – the energy price guarantee will remain at its current level until the end of June 2023. Under the Energy Price Guarantee, the Government sets maximum prices per unit of gas and electricity for households.
• Defence – the Government will spend an additional £2 billion per year between 2023/24 and 2027/28 (£3 billion in 2024/25) on defence and national security priorities.
• Taxation of pensions – the amount which can be saved tax free in private pensions in a single year and across a lifetime will increase
• Fuel duty – the fuel duty rate will be frozen for 12 months. Last year’s temporary 5p cut will be maintained and duty will not be increased with inflation.
• Capital allowance – from April, and for the next three years, businesses will be able to deduct 100% of all plant and machinery investment spending immediately when calculating taxable profits. This is often called full expensing.

The OBR forecasts

The OBR says that developments since its November forecasts have been largely positive, if modest, but notes there are still significant structural challenges.

The improvements in the forecasts for the economy have led to improvements in the public finances – the OBR describe the outlook as “somewhat brighter”. 

In February 2023, the House of Commons approved revised targets for the public finances. They were proposed by the Chancellor in the 2022 Autumn Statement.

The targets, which cover government debt and borrowing, are often referred to as the “fiscal targets”. Both targets are currently being met in the OBR’s forecast.

 Find all of the Library’s research on the Spring Budget 2023 in one place.