Chancellor Jeremy Hunt delivered the Spring Budget on Wednesday 6 March 2024, cutting the main rate of employee National Insurance by 2p from 10% to 8% with effect from 6 April 20241. The Budget also extended the temporary 5p fuel duty cut and cancelled the planned inflation-linked increase for 2024-25, a measure first introduced by then Chancellor Rishi Sunak in 20221.
On National Insurance, the government is also cutting a further 2p from the main rate of self-employed National Insurance, on top of the 1p cut announced at the Autumn Statement 20231. The Budget set out the changes as part of a tax system the Chancellor described as fair, simple and rewarding of hard work1.
The fuel duty measures were summarised by the Chartered Institute of Plumbing and Heating Engineering (CIPHE) in its account of the Budget:
"The government is also extending the temporary 5p fuel duty cut and cancelling the planned inflation-linked increase for 2024-25, which was initially introduced by then Chancellor Rishi Sunak in 2022."
The Budget also announced a Public Sector Productivity Programme. The Chancellor said productivity in the sector had still to return to pre-pandemic levels, and that a focus on increasing efficiencies, for example through digital and technological transformation, would deliver up to £20 billion of benefits a year1. For the NHS, the programme is backed by £3.4 billion of funding, which the government said will help unlock £35 billion in cumulative productivity savings from 2025-26 to 2029-301. A further £800 million is being invested in wider public services, which the government said will deliver up to £1.8 billion worth of benefits over the forecast period1.
| Measure | Detail |
|---|---|
| Employee National Insurance | Cut by 2p, from 10% to 8%, from 6 April 20241 |
| Self-employed National Insurance | Further 2p cut, on top of the 1p cut at Autumn Statement 20231 |
| Fuel duty | Temporary 5p cut extended; planned inflation-linked increase for 2024-25 cancelled1 |
| Public Sector Productivity Programme | Up to £20 billion of benefits a year targeted1 |
| NHS productivity funding | £3.4 billion, to unlock £35 billion in cumulative savings from 2025-26 to 2029-301 |
| Wider public services | £800 million invested, up to £1.8 billion of benefits over the forecast period1 |
The CIPHE's chief executive, Kevin Wellman, said the National Insurance cut would be welcomed but "these cuts do not go far enough", pointing to the cost of fuel and materials and the upfront payments installers make for products such as boilers1. On fuel duty, he said the freeze had given "some peace of mind" and that knowing it would not be lifted yet would remove some of the worry people have felt, while adding that the cost of living remains high1. He also said councils across England had warned of going bust and that more financial support "cannot come soon enough"1.
Why it matters for households
The National Insurance cut takes effect from 6 April 2024 and changes the deductions made from pay for employees and the self-employed1. The fuel duty extension keeps the 5p cut in place and cancels the inflation-linked rise that had been planned for 2024-25, so the duty applied to road fuel is not increased on that basis1. For a household, both measures affect money available for other bills rather than the price of energy itself; the Budget as reported contains no change to domestic energy tariffs or to support schemes for energy bills1.
The productivity programme concerns how public services are funded and run, including £3.4 billion for the NHS intended to unlock £35 billion in cumulative savings from 2025-26 to 2029-301. Those savings are projected rather than realised, and the reported figures cover the forecast period only1. The CIPHE's response notes that many households are still feeling the effects of the cost of living crisis and that more needs to be done to support people1. No further detail on how the productivity savings would be achieved at household level has been reported1.
What happens next
The employee National Insurance rate of 8% applies from 6 April 20241. The fuel duty cut and the cancellation of the inflation-linked increase cover 2024-251. The NHS productivity savings are projected across 2025-26 to 2029-301. Further detail on the Public Sector Productivity Programme has not been reported1.
Sources1 cited
- Spring Budget 2024, ciphe.org.uk