Budget (2024)

What is Budget (2024)?

Autumn Budget 2024 is the UK government's yearly tax and spending decision event under the Charter for Budget Responsibility (the fiscal process law). It covers tax, welfare, public services, borrowing and debt; HM Treasury (HMT, the finance ministry) prepares it and the Chancellor presents it to Parliament. The Office for Budget Responsibility (OBR, the independent forecaster) judges compliance; the Budget is no survey, just policy costings plus OBR forecasts. Borrowing and debt come from the statistics agency (the Office for National Statistics, ONS); rates belong to the rate setters (the Monetary Policy Committee, MPC).

When is it released and what happens each release?

Each Budget follows a fixed routine: the Chancellor presents the statement to the House of Commons (the elected chamber) on a Wednesday. The speech starts shortly after 12:30 UK time, after Prime Minister's Questions, and lasts about 1 hour; the document appears on GOV.UK the same day. The date is announced in advance; each Budget brings the OBR Outlook (the independent forecast), Treasury costings (methods and assumptions) and household analysis. Tables 5.1 and 5.2 score the decisions, and source documents back every chart. There is no revision cycle: forecasts refresh each event, and one major fiscal event comes per year.

What moves Budget (2024)?

6 Budget parts shape borrowing, debt and growth expectations.

• Economic and fiscal context: OBR growth and inflation forecasts plus the judgement on fiscal rules.
• Fiscal framework: Stability rule targets current budget surplus in the fifth and final forecast year within 0.5% of GDP. Investment rule targets falling debt share, and an escape clause covers shocks.
• Growth measures: mission steps across 7 pillars including investment, planning and skills.
• Departmental settlements: day-to-day departmental spending paths growing at an average of 2.0% per year.
• Policy decisions: each scored tax or spending choice, such as employer National Insurance or capital gains tax, with its cost or yield.
• Financing: gilt sales (government bond sales) and debt management for funding borrowing.

Spring Budget 2024 (6 March 2024) shows the arithmetic: it cut employee National Insurance (a payroll tax) by 2 points, from 10% to 8%. A worker on 35400 pounds saved over 900 a year. Self-employed Class 4 fell from 9% to 6%, saving a person on 28000 pounds around 650 a year. The package was scored at over 20 billion pounds per year, lifting output by 0.7% by the final forecast year. Underlying debt still fell in the final year with 8.9 billion pounds of headroom (a safety margin). That followed 13.0 billion and 6.5 billion at the two prior events. Borrowing fell to 2.7% of GDP with 56.8 billion pounds of headroom. At the same time the OBR judged welfare spending would breach its cap by 7.4 billion pounds.

How is Budget (2024) calculated?

1. Score each decision: Treasury costs each policy year by year in millions of pounds on a National Accounts basis (the standard statistical recording). Table 5.1 shows effects on PSNB (public sector net borrowing, total spending minus receipts) to the final forecast year.
2. Split by budget type: tax measures plus changes to DEL (Departmental Expenditure Limits, fixed departmental budgets) and AME (annually managed expenditure, demand-led spending).
3. State methods and uncertainty: each costing sets out the measure, base and method, including behaviour change. Costings with no expected behaviour state that assumption, plus main areas of uncertainty.
4. Apply fiscal arithmetic: current budget balance equals receipts minus day-to-day spending, so a surplus means borrowing only for investment. PSNB equals the current deficit plus net investment, and PSNFL (public sector net financial liabilities, the matching debt stock) tracks ratios to GDP.
5. Illustrative example (rounded): receipts 1200 and day-to-day spending 1190 give a current surplus of 10 (all billion pounds). With net investment of 70, PSNB is 60; with GDP of 3000, falling debt means the debt to GDP ratio drops year on year.

Key point: Budget day borrowing, headroom and tax yields are forecasts plus scored decisions, not measured facts. Treasury sets policy, but the OBR judges rule compliance; the Budget and the OBR Outlook are separate documents.