Unveiling Britain’s budget, chancellor of the exchequer Jeremy Hunt played his political cards, placing a bet on tax cuts to bolster the Conservative party’s standing ahead of the looming 2024 election. The move, while strategically calculated, raises questions about the long-term viability of such fiscal measures and their potential impact on public services.

Mr Hunt’s decision to lower social security contributions for workers is undoubtedly a crowdpleaser, putting approximately £900 back into the pockets of average citizens annually. This move is presented as a beacon of hope for struggling families, with Mr Hunt declaring, “Because of the progress we’ve made, we can now help families not just with temporary costof-living support but with permanent cuts in taxation.”

However, the devil is in the details, and some experts argue that this optimism may be premature. The Institute for Fiscal Studies cautions against taking Mr Hunt’s plans at face value, urging a pinch of scepticism. The concern is centred around the dependency on borrowing forecasts and the potential consequences for essential public services. Critics point out that what Britain essentially got was tax cuts paid for by some completely uncertain spending plans for the future.

To offset the fiscal impact, Mr Hunt introduced measures such as extending a windfall levy on energy firms’ profits, raising taxes on e-cigarettes and vapes, increasing tobacco duties, and imposing higher duties on non-economy flights. One of the more politically sensitive changes is the taxation of “non-domiciled” individuals residing in Britain for over four years on their income from abroad.

While this aligns with opposition proposals, it remains to be seen how the public will respond to this potentially divisive move. A critical aspect of Mr Hunt’s budget narrative is the promised economic growth, projected at 0.8 per cent this year after a recession in the second half of 2023. This figure is marginally higher than the previous outlook, indicating a cautious optimism about the recovery. However, critics argue that sustaining this growth requires a delicate balancing act, especially given the challenges posed by the aftermath of the pandemic.

The chancellor’s commitment to fiscal responsibility, amid the heaviest debt burden since the 1960s, is evident. Mr Hunt and Prime Minister Rishi Sunak, having faced market turmoil due to their predecessor’s taxcutting plans, tread cautiously. The pledge to avoid major giveaways and adhere to plans for less new borrowing reflects a conscious effort to navigate the economic landscape with prudence. As the budget sparks debates and discussions, it becomes clear that the road ahead is fraught with uncertainties.

Balancing the need for economic revival with the responsibility of managing public finances is no easy feat. The success of Mr Hunt’s budget will not only be measured by its immediate impact on citizens’ pockets but also by the resilience of the economy and the sustainability of the proposed fiscal measures.