You’ve seen the little red box. You’ve heard mutterings of the infamous 2022 mini-Budget that sent your mortgage rate sky high.
You may have even noticed that your pay packet increased slightly from 6 January as a result of National Insurance cuts made in last year’s Autumn Statement.
But what exactly is a government Budget? What does it mean for your finances? And what time will it be announced on Wednesday, 6 March?
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What is a government Budget?
Each year, the Chancellor of the Exchequer sets out the government’s plans for the economy in a Budget statement. This includes its spending plans and how they will be funded through taxation.
In 2016, it was announced that the Budget should be held once a year in the autumn, with an additional statement being made in the spring.
However, in recent years, the government has deviated from this schedule due to a number of factors. These have included the timing of the 2019 general election, and the need for measures to address the economic disruption caused by the Covid-19 pandemic.
This year’s Spring Budget follows hot on the heels of Jeremy Hunt’s Autumn Statement on 22 November 2023. It is likely to be the government’s last chance to set out tax and spending measures before the next general election.
It comes against a tough economic backdrop, with inflation still high at 4%, interest rates still being held at 5.25%, and the UK having slipped into recession in the final three months of 2023.
The public will be paying close attention to see what economic concessions Hunt is able to make with the limited fiscal headroom he’s got to play with.
When will this year’s Spring Budget be announced?
This year’s Spring Budget will be announced on Wednesday, 6 March at 12.30pm, just after Prime Minister’s Questions.
Jeremy Hunt, the chancellor, will deliver a speech to MPs in the House of Commons announcing the Budget measures.
Typically, each Budget is followed by four days of debate. Some tax proposals will be approved almost immediately, while others will be agreed later.
Some time after each Budget statement, the proposals are made legally binding through a Finance Bill.
Who is responsible for the Budget?
The Chancellor of the Exchequer, currently Jeremy Hunt, is responsible for the Budget.
After each Budget, the Treasury will typically publish a report providing further detail on the measures announced.
The chancellor’s Budget decisions are partly informed by data and analysis provided by the Office for Budget Responsibility (OBR). The OBR is an independent watchdog funded by the Treasury. Typically, the OBR publishes its economic and fiscal outlook on the same day as the Budget is delivered.
After each Budget statement, the Commons Treasury Select Committee (a cross-party committee) scrutinises it and provides a report. The government then produces a report in response to these findings.
What does the Budget mean for me?
The contents of the famous red box can have a big impact on your day-to-day life.
The Budget determines whether or not public services are well-funded. It determines how much you pay in tax. And it also has a sizeable impact on the health of the overall economy.
You only need to look back to October 2022 and the disastrous mini-Budget to see the consequences of getting it wrong. Gilt yields soared, the pound crashed, the Bank of England had to step in, and mortgage rates skyrocketed.
Ahead of this year’s Spring Budget on 6 March, we’ve compiled a round-up of all the measures you could expect to see, from tax cuts to ISA reforms.
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