Discussing what Londoners need from the Spring Budget 2024, Antonia Jennings, CEO of Centre for London, said:

The piecemeal reforms that the Chancellor is expected to announce tomorrow will mean little to struggling Londoners.

Tax Cuts

We don’t know whether Hunt will cut national insurance or income tax. Although, on average, Londoners will receive the largest tax cut from a reduction in income tax or national insurance – this average hides profound inequality. Cutting national insurance or income tax is regressive and would disproportionately benefit the richest households. The poorest Londoners would see very little financial benefit, and the effects of freezing personal allowance will mean low earners will still expect their taxes to rise. Our recent polling shows more than a third of Londoners are struggling to make ends meet.

A tax cut is not the best way to get money into the pockets of low-income households. Nor will it help the many public services that are fighting for survival. More than half of councils in England face bankruptcy within the next five years.  The Chancellor should be prioritising long-term investment in public services, not short-term giveaways.

Fuel Duty

Fuel duty has been frozen for 13 years running – extending the freeze will cost the government some £2 billion. It will also incentivise driving polluting petrol and diesel cars, while handing out a tax cut to better off households, who are most likely to own a car.  With 89% of the city’s residents worrying about air quality in London in the last year, favouring car ownership does nothing to alleviate Londoners genuine concern about health issues worsened by air pollution.

In London, over 4 in 10 households do not own a car and so will not benefit from a real term cut to fuel duty. The Chancellor’s priority should be investing in public transport, especially buses, which are used most by low-income households, and disincentivising unnecessary car use, through a smart, fair road-user charging system.

Child Benefits

Raising the threshold at which the High Income Child Benefit charge applies would certainly be a boost to many parents earning over £50,000, increasing the incentive for wealthier parents to continue working.

But it won’t address the most acute need. After housing costs, a third of London’s children live in poverty, due to the extortionate cost of living in the capital. The city’s housing shortage has pushed more than 175,000 Londoners into temporary accommodation, costing the capital’s councils £90 million a month. We are urging the Chancellor to focus on a longer-term solution to the crisis by investing £15.1bn a year in the Affordable Homes Programme. This would fund the building of enough social housing to meet people’s needs – 90,000 new homes a year, 30,000 of which should be built in London.

This Budget is perhaps the last opportunity for the Conservatives to win over voters ahead of the General Election. It remains to be seen whether the cautious policies they put forward will be enough.”