Jeremy Hunt's Low Key Budget Keeps Tory MPs On Side
Jeremy Hunt delivering his Budget (House of Commons library)
4 min read
Chancellor Jeremy Hunt's Budget appears to have maintained unity within the Conservative party, with few signs of dissent in the early reactions to Wednesday's Spring Budget announcement from Tory backbenchers.
Hunt's statement this afternoon was a relatively low key affair, with most major policies having been briefed or leaked to the press, or officially announced by the Treasury in the days leading up to his House of Commons statement.
The one big surprise was his announcement that the lifetime pensions allowance – the maximum amount of money a person can have in their pension pot before paying tax on it – would be abolished altogether in a bid to convince more over 50s to rejoin the workforce, and offering what could be viewed as an olive-branch to the swell of calls for tax cuts from within his party.
Labour leader Keir Starmer was quick out of the blocks to criticise the policy as another example of the Conservative government giving a "tax cut for the well off".
The party says the decision will result in high earners with a pension pot worth £2m getting a £275,000 tax break, and could create a loophole allowing the wealthiest people in society to avoid inheritance tax. It could also produce the opposite effect of people retiring earlier, it adds.
Conservative MPs who spoke to PoliticsHome following Hunt's statement were bullish about the policy and confident that it wouldn't be toxic with voters.
"If Labour wants to attack people for putting money into pensions, then good luck with that," said one former Cabinet minister.
Another senior Tory MP said: "They [Labour] want people to have a less comfortable retirement and to give up work early. It's interesting to see they’re still promoting the politics of envy."
A former minister was less confident, admitting the policy could potentially be a "trap" for the Conservatives and that the party had to sell it effectively to the public.
The decision by Hunt and PM Rishi Sunak to extend 30 hours a week free child care to children over nine months has also been well-received by Conservative MPs, a large number of whom had been pushing the government to help bring down the eyewatering childcare costs facing parents.
A former secretary of state said the policy, which exceeded expectations of what the Treasury was prepared to fund, was "absolutely consistent with Rishi's overall approach" in "really trying to show he understands the fundamentals of a problem and wanting to focus on durable solutions".
The policy is one of the most popular measures in the Budget with the public, according to snap polling carried out by Savanta, with 69% of respondents saying they support the move.
Nearly half of people polled (49%) said they broadly supported the Budget overall, while one in five opposed it.
Two thirds of people, however, said they did not believe the measures announced by Hunt today would go far enough to help people like them to deal with the cost of living, in the latest sign that the Conservative party faces an uphill battle to convince people that they are on their side.
There was some disappointment among the most fervent tax-cutting Conservatives MPs that Sunak and Hunt did not bow to pressure to reverse their plan to raise corporation tax to 25 per cent.
Ranil Jayawarden MP, a leading member of the Conservative Growth Group, whose members include erstwhile PM Liz Truss, said "many" Tories will be concerned that the government decided to freeze income tax thresholds, as it amounts to "an effective Income Tax rise" for workers.
Acccording to the Office for Budget Responsibility (OBR), 3.2 million people are set to become new tax payers, with 2.1 million joining the higher threshold, and 350,000 hitting the top tax threshold.
But, on the whole, any discontent on the Tory back benchers has been little more than a grumble, with the parliamentary party appearing generally supportive of the package announced today.
There is a belief that Sunak and Hunt will hold back more exciting and generous policies for the next Budget and for the Conservative party set to take place ahead of the next general election, expected before the end of 2024.
"They are leaving stuff in the tank for next year," said one ex-minister.
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