UK: National Insurance Cuts Announced Within 2024 Budget

Facts

• Chancellor of the Exchequer Jeremy Hunt has announced a two pence (p) reduction in employee National Insurance as of April 6, from 10% to 8% of annual income, as part of the UK Government's 2024 Spring Budget.¹
• The High Income Child Benefit Charge threshold will be raised from £50K (US$64K) to £60K ($76K), and repayment halved until an individual earns £80K ($102K) or more. Fuel duty's temporary 5p cut is extended by 12 months and the Energy Profits Levy is extended to March 2029.²
• A new vape duty will be introduced in Oct. 2026, estimated to raise £445M ($567M) in 2028/29, as well as an increase to to the current tobacco duty which will provide an additional £170M ($216M) in the same period.²
• A new UK Investment Savings Account (ISA) will also be launched, allowing an additional £5K ($6.4K) of tax-free investment into UK assets, while tax rules for non-UK domiciled individuals in the UK for over four years will be changed to a 'residency-based system.'³
• Hunt claimed that while the UK economy had faced 'the most challenging economic headwinds in modern history,' his announcements would mean 'more jobs, more productive public services and lower taxes...for long-term growth.'⁴
• According to the Office for National Statistics, last year the UK economy grew by 0.1% compared to 4.3% a year prior, entering a recession during the last two quarters (-0.1% Q3, -0.3% Q4). The figure places the UK as the worst-performing nation out of all G7 countries in 2023.⁵

Sources: ¹Yahoo Finance, ²Publishing, ³hansard.parliament.uk, ⁴https://www.huffingtonpost.co.uk/ and ⁵ONS.

Narratives

• Pro-establishment narrative, as provided by Conservative Home. While Jeremy Hunt's budget lacked surprises and promises of an economic revolution given current financial circumstances, the Chancellor's message was certainly clear. The UK, despite all the ups and downs, is back in safe hands — slowly but surely rebounding from years of turbulence. Hunt remains a staple of professionalism and trust within the Conservative Party.
• Establishment-critical narrative, as provided by Guardian. Hunt's budget can only be viewed as devoid of reality and deeply out of touch. While children remain hungry and public services continue to be desperately underfunded, the Chancellor instead attempted to portray light-touch changes in taxation as the solution to a cost of living crisis. The budget merely reaffirmed what's already well known — the Tories are on their last legs, and it is time for a change in government.

Predictions