"Nothing that Jeremy Hunt did yesterday, nor anything the OBR said, changes anything very significantly" - so says the director of the Institute for Fiscal Studies, Paul Johnson.
Raising the question: why are we still talking about it? Why are you even bothering to read this article? Why am I writing it?
These are all good questions. Perhaps the best answer is that while Wednesday's budget was a little less interesting than most people expected, it will nonetheless make a difference to many of our lives, albeit in a subtle way many people might not notice.
Perhaps the clearest evidence of this is to be found in some of the IFS analysis on Thursday looking at what they call the "distributional analysis" of what the chancellor announced.
These exercises are quite helpful because they show the average impact of the tax and benefits policies implemented by this government on each tenth of the population, from the highest to the lowest earning. You get a final number which shows (if only in an approximate fashion) whether these measures have made you better or worse off.
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And before this budget, the average household was, as of 2024/25, slightly worse off as a result of government policies since 2019. The impact differed along the income spectrum: the poorest 40% of people were slightly better off, but the rest were worse off.
That was largely a consequence of the fact that the government has frozen tax allowances, dragging more people into paying income tax both at the basic and higher rates.
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But here's the interesting thing. Following this budget, with its 2p national insurance cut, the balance has shifted. As of this year, all income groups save for the richest 10% are better off as a result of the government's tax and benefit policies.
That's quite a big deal, especially ahead of an election, but there are, as ever, a few important provisos. The first comes back to the opening phrase of that last but one sentence.
Most people are better off this year, but roll on another few years - another few years in which the income tax brackets are frozen - and by 2027/28 all but the very poorest will be worse off as a result of government tax and benefit policies.
The second proviso is that these kinds of exercises only look very specifically at tax and benefit policy. They take no account of the wider picture and in this case that wider picture is really important.
Look, for instance, at the overall household disposable picture in the UK and the story is baleful. A chart from the Resolution Foundation showed on Thursday that this parliament has seen the worst performance in this metric (which is perhaps the single best measure of our standard of living) on record.
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Analysis - No pre-election fireworks in Hunt's safety-first budget
In other words, while the government's tax and benefits policies are now net positive for most income groups, don't expect them to feel it. Instead they feel, like most residents of Europe in the face of the cost of living crisis, severely financially bruised.
The final thing of note from Thursday's analysis is some further detail on the likely path of public spending.
You may recall that the chancellor stopped short of cutting his pencilled-in plan for 1% real terms increases in departmental spending after this Parliament. But while that sounds relatively generous, the story is a bit more complex than that.
The reason is that some departments - most notably the NHS - have protected budgets while other departments - think the Home Office or justice - do not. The upshot is that while those protected departments can expect quite chunky real terms increases in the coming years (2.9% a year), the unprotected departments can expect large cuts (-3.5%).
That this comes after around 20% of real terms cuts raises the question: are these cuts really achievable? Most people in public administration think the answer is almost certainly not.
Which raises another question: at what point does this chancellor (or the one who follows him) admit that and put in more money? Where does that money come from?
Be the first to get Breaking News Install the Sky News app for free Paul Johnson of the IFS was right about one thing though: important questions like that remain unanswered even after this budget. The fiscal can has been kicked further down the road.
FAQs
On January 7, 2024, congressional leaders reached a US$1.66 trillion agreement for topline spending.
What is in the budget for 2024? ›
Measures at Spring Budget, including freezing alcohol and fuel duties, reduce inflation by 0.2 percentage points in 2024‑25. High inflation creates uncertainty for households and businesses, and is a barrier to stable, long-term growth. The government continues to support the MPC as it brings inflation back to 2%.
What is fy 2024? ›
Fiscal years are referenced by their end date or end year. For example, to reference a nonprofit organization's fiscal year, you may say, "FY 2024" or "fiscal year ending June 30, 2024." Similarly, if you referred to government spending that occurred on Nov. 15, 2024, you would label that as an expenditure for FY 2025.
What is the budget for 24 25? ›
Budget Estimates 2024-25
Total receipts other than borrowings and the total expenditure are estimated at Rs.30.80 and Rs.47.66 lakh crore respectively. Tax receipts are estimated at Rs.26.02 lakh crore.
How much debt is the US in? ›
The $34 trillion gross federal debt equals debt held by the public plus debt held by federal trust funds and other government accounts. In very basic terms, this can be thought of as debt that the government owes to others plus debt that it owes to itself. Learn more about different ways to measure our national debt.
What happens to real interest rates when a government increases its budget deficit? ›
Budget deficits could also cause interest rates to rise if they caused the debt to grow at unsustainable rates, in which case investors would demand a risk premium to be induced to hold government debt for fear of default.
What's going up in April 2024? ›
On 1 April 2024, all rates of the National Minimum Wage, including the National Living Wage, will increase. These increases implement recommendations made by the Low Pay Commission in autumn 2023.
What is the summary of the budget report? ›
Budget report financial summary
It includes the amounts budgeted, encumbered, expensed, and balance for: Each major budget or expense category (i.e., chart of accounts roll-up) The total of the direct and indirect costs.
What is the overview of budget? ›
A Budget is a statement that gives the details of 'where money comes from' and 'where the money goes to'. In technical terms, the money that 'comes in' is referred to by terms such as income, revenue, receipts, etc., and the money that 'goes out' is referred to as expenses, expenditure, spending, etc.
What state has the highest budget? ›
State and local governments spent $11,087 per capita in 2021, but per capita direct spending varies widely across states. Among the states, Alaska had the highest per capita state and local spending in 2021 at $18,719, followed by Wyoming ($17,175) and New York ($15,899).
Calendar year – 12 consecutive months beginning January 1 and ending December 31. Fiscal year – 12 consecutive months ending on the last day of any month except December. A 52-53-week tax year is a fiscal tax year that varies from 52 to 53 weeks but does not have to end on the last day of a month.
Is 2024 a special year? ›
2024 is a Leap Year, which means here is an extra day in February.
What is the 75 15 10 rule? ›
This iteration calls for you to put 75% of after-tax income to daily expenses, 15% to investing and 10% to savings.
What is the 50/30/20 rule? ›
The 50-30-20 rule recommends putting 50% of your money toward needs, 30% toward wants, and 20% toward savings. The savings category also includes money you will need to realize your future goals.
How much should rent be of income? ›
A popular standard for budgeting rent is to follow the 30% rule, where you spend a maximum of 30% of your monthly income before taxes (your gross income) on your rent. This has been a rule of thumb since 1981, when the government found that people who spent over 30% of their income on housing were "cost-burdened."
What is the debt outlook for the United States? ›
The Federal Budget
Debt held by the public, boosted by the large deficits, reaches its highest level ever in 2029 (measured as a percentage of GDP) and then continues to grow, reaching 166 percent of GDP in 2054 and remaining on track to increase thereafter.
What's in the new spending bill? ›
Congress released a massive $1.2 trillion bill on Thursday to fund the rest of the federal government. The package, which runs more than 1,000 pages, would provide funding for the departments of Defense, Homeland Security, Labor, Health and Human Services, Education, State and the legislative branch.
What is fiscal 2025? ›
Business, corporate, government or individual fiscal year calendars and planners for the US fiscal year 2025 as defined by the US Federal Government, starting on October 1, 2024 and ending on September 30, 2025. The calendars cover a 12-month period and are divided into four quarters.
How much is the federal budget? ›
The federal government spent almost $6.2 trillion in FY 2023, including funds distributed to states. Federal revenue decreased 15.5% in FY 2023 but remained almost 8% higher than in FY 2019. Federal spending decreased by 8.4% in FY 2023, the second year of decreased spending since a record high in FY 2021.
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