In January 2023, the Prime Minister set out three economic priorities — to halve inflation, grow the economy and reduce debt.

At the Spring Budget, the government announced that it is delivering on these priorities — according to the chancellor, inflation has fallen, growth has been more resilient than expected, and debt is forecast to fall.

Consumer Prices Index (CPI) inflation has now more than halved from a peak of over 11% in Autumn 2022 to 4.2% in the final quarter of last year — more than 0.6 percentage points lower than was forecast in November.

The OBR forecasts inflation to fall to its 2% target in Q2 2024, a year earlier than in its November 2023 forecast.

Government borrowing is forecast to fall in every year, reaching £39.4bn or 1.2% of GDP by 2028-29.

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The key points of the Statement include plans to:

• increase the VAT registration threshold for SMEs from £85,000 to £90,000 to cut their taxes and help them grow, aimed at helping 11,000 SMEs
• extend the Recovery Loan Scheme (RLS) to support SMEs to access finance, renaming it the Growth Guarantee Scheme  
• allocate over £240m to housing projects in London, unlocking up to 7,200 homes in Barking and a new life sciences hub and up to 750 homes in Canary Wharf
• pledge over £260m to build more homes now, and sets out the government’s commitment to growth in Cambridge
• scrap the furnished holiday lets tax regime from 6th April 2025
• remove the stamp duty land tax relief for multiple dwellings in England and Northern Ireland from 1st June 2024
• extending the alcohol duty freeze until 1st February 2025
• cut the main rate of employee National Insurance contributions (NICs) by 2p from 10% to 8% from 6th April 2024, which when combined with the cut at the Autumn Statement last year will save the average worker on £35,400 over £900 a year
• slash the higher rate of capital gains tax for residential property disposals from 28% to 24% to encourage landlords and second homeowners to sell their properties
• launch a growth package for investment zones in the North and Midlands with a 10-year package of funding benefitting local skills, R&D, local infrastructure, and business investment
• provide an additional £500m to enable the extension of the Household Support Fund in England from April to September 2024
• announce the British ISA, which will allow people to invest up to £5,000 tax-free a year in UK assets
• seek to extend full expensing to assets for leasing when fiscal conditions allow and will publish draft legislation shortly