Revisions, revealed in the Spring 2024 budget, to major spending categories are relatively minor

The Spring statement did not bring any substantial changes to business taxation and should not present new challenges to multinationals in terms of the operational environment unlike the previous hike to corporate taxation. While B2G demand projections remain broadly unchanged, multinationals operating in the defense industry may see some new opportunities given that defense spending is one of the expenditure categories that has seen the most notable revisions. The cuts to the NICs rate will likely benefit mid-to-high income consumers, which, while unlikely to translate into a significant volume boost to consumer spending, may encourage new premium B2C opportunities and strengthen demand among these consumer segments. 


  • The Spring 2024 budget statement failed to introduce significant fiscal surprises, with overall expenditures remaining broadly unchanged.
  • The government introduced another 2.0% cut to National Insurance Contributions, following a previous cut of 2.0% in the Autumn 2023 budget, and bringing the main rate of NICs to 8.0%.
  • The government also increased the threshold for high-income child benefits from GBP 50,000 to GBP 60,000, which will take place from April 2024 onwards, and has promised additional reforms, based on household incomes rather than individual incomes.
  • Borrowing needs have also been revised sharply, from GBP 123.9 bln in the Autumn budget statement, to 114.1 bln in the most recent government forecast, reflecting stronger revenue collection, with debt interest repayment also projected to fall in the long-term period through 2028–2029.

Our View

The Spring Budget 2024 failed to introduce any major surprises, and fiscal policy trends remained on track with our expectations. The cuts to the NICs rate will help consumers, especially those in higher income segments, who are set to see larger benefits in cash terms. Rising excise taxes on tobacco and plans to tighten fiscal rules on vaping will help bring additional revenues from October 2026, but most of the current tax cuts and the expanded thresholds for high-income childcare benefits will be funded through existing revenue streams and come on the back of significantly lower borrowing projections.

Total expenditures have remained virtually unchanged at GBP 1,216.3 bln, slightly down from the previously projected 1,222.3 bln, with some spending categories, such as healthcare, likely to see small, but likely relatively unimpactful, increases. Public investments remained practically flat from the previous iteration of the budget, seeing a small increase, but are set to see a more meaningful increase in the 2024-2025 fiscal period of GBP 1.8 bln. defense expenditures, however, are set to see a more notable increase to GBP 35.0 bln from the previous GBP 32.2 bln, which may present some new opportunities for multinationals operating in the industry.

Most importantly, the budget did not unfreeze the income tax threshold, which would have been a much more notable and impactful change in terms of domestic consumption dynamics, but persisting fiscal constraints have prevented more ambitious actions. While tax measures have not been targeted at specific income segment groups explicitly, the fact that they are more beneficial for mid-to-high income households suggests that the government is eager to regain some popularity among its traditional voter base prior to the elections. The latter is unlikely, and we continue to project a Labour win in the upcoming elections, which are most likely to be held in November. The ongoing fiscal cuts and the reduction in planned public investments, however, are set to present notable fiscal challenges for a potential new cabinet in 2025, and budget planning may require a significant revamp if Labor is to meet some of its policy pledges. The latter’s softening rhetoric seems to suggest that at least in the medium-term, budgetary priorities and overall expenditures are unlikely to see substantial revisions in the next fiscal period.

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