announce another cut to national insurance contributions. the reduction of 2p in the pound will come on top of an identical cut which came into force injanuary, something he announced last year. you can see there earlier, just as he was leaving number 11 downing st, there is the chancellor holding that famous red box, standing alongside his treasury team for that annual photo moment ahead of the budget. this all comes at a time when the uk economy is in a recession, albeit a mild recession stop we are living through a cost of living crisis. inflation has stabilised but it is still double the government's target of 2%. the chancellor has a challenge on his hands and it is not just the economics of course, this is the tickle as well because this is the tickle as well because this is going to be the last budget

before the next general election. so there is a lot riding on this and after the chancellor delivers his statement, we will hear from the labour party, they will deliver a response in the house of commons to that budget as well. joining me now is our political correspondence who is our political correspondence who is at downing street as well. we saw the chancellor depart from number 11 in the last 20 minutes or so, that budget firmly inside that red box. i was saying earlier, i did a story years later about those red boxes and how they are made, a secretive process, and they are very heavy, about three kilograms, so it takes a muscle to hold that up! we knew some of what is in the box, we knew about the 2p reduction in national insurance but what other rumours swirling around westminster? it is

interestin: swirling around westminster? it 3 interesting you mention swirling around westminster? it 1 interesting you mention the particle context around this because we think this will be the last budget, full budget before the general election. if the election is pushed onto the end of the year, there may be another statement of intent from the government later in the year but certainly, this is the last major moment thatjeremy hunt will have on this government will have to try and persuade people that they are on the right track. if you think about the messaging we can expect to hear from the government today, it is very much going to be, stick with us and trust as to manage the economy. we have been through all of these shocks. we have heard the government talking about the shocks they have been through and they think their message is, we are studying the ship and are on track to determine the corner. we talked a lot about the fact that this is not the moment jeremy hunt wanted to have, the moment of the economy having been on the up. interest rates are still

high. he wanted to present and optimistic picture but the political messaging that he is going to try to put forward is to say, look, we are the safe pair of hands, and stick with us if you want the plan to continue working. very interesting to see that labour will be trying to steal that message from the conservatives to say,, we have heard about the tories having burn the house down along with not only fixing the roof but burning the house down, so that analogy, she is trying to say, credible to its shot to pieces. labour should be the one to pieces. labour should be the one to take charge, but i think it's interesting that we will hear from jeremy hunt that his plan is all about trying to get long—term growth going because that is what all parties want to claim that they have a plan for, to kick—start growth in the economy. he thinks that this broad—based cottage in national insurance is one way of kick—starting growth and then

hopefully, that in the tories hopes and views, it will be something that will persuade voters to stick with them, next election, so the play to go messaging is quite interesting and i think in terms of labour, we will hear a broad rebuttal at the tories track record and they will want to attack the conservatives on their track record over the last years of government. the tories will try to neutralise that by saying, things are getting better, so hold out and stick with us. a lot of politics going on in this budget and a lot of choices in terms of what jeremy hunt is announcing. we know he is prioritising tax cuts and he things that is something that will kick—start growth but will also appease tory backbenchers who are furious about their record high levels of tax that has been reached in recent years and they think it is fundamentally un—conservatives who want to keep the party together by

bringing those taxes down. that is his choice, to prioritise cutting tax and the cost of that in terms of what it means elsewhere, in terms of public spending. fin what it means elsewhere, in terms of public spending-— public spending. on what you were sa in: , i public spending. on what you were saying. i was _ public spending. on what you were saying, i was reading _ public spending. on what you were saying, i was reading a _ public spending. on what you were saying, i was reading a new- public spending. on what you were saying, i was reading a new surveyj saying, i was reading a new survey which says that voters want cost of living assistance more than increased funding for public services but it seems to have changed because in february, the polls showed that most britons would prefer the government to prioritise public spending over tax cuts but then they are not saying that new pool findings call this into question with a preference for putting more money, putting that into question. the politics there, is the balance between tax cuts and investing more in services cosmic yes, clearly quite a mixed picture in terms of what they think is going to be most popular but also,

remember that tax cuts, national insurance, cut a national insurance is a target tax cut at working people so that compared to a cut on income tax which includes income from non—employment, so that would benefit pensioners, for example, national insurance doesn't, so there will be some discussion about who exec benefits, which groups will bite benefiting from any tax cuts thatjeremy hunt announces about the all choices in terms of who is targeted. all choices in terms of who is targeted-— all choices in terms of who is tarueted. , ~ , ., ., ., targeted. they think is national insurance has _ targeted. they think is national insurance has a _ targeted. they think is national insurance has a broad-based i targeted. they think is nationalj insurance has a broad-based to insurance has a broad—based to target when it comes to these targets. they might get out and start spending it but you are right, there is a mixed picture in terms of there is a mixed picture in terms of thejudgment of who there is a mixed picture in terms of the judgment of who will benefit because they are also trying to target the tory vote in terms of the people who have traditionally voted for the tory party but also try to

appeal more broadly so there are these twin pressures, the cost of living crisis that has been with us for some time, as well as a perception that public services need a big cash injection so we heard in the autumn statement in november that schools for example got a pot of money back then but it is not expected that public services will be getting much in the way of extra spending. we have heard that councils are not going to be getting any extra money in addition to what has been announced and jeremy hunt is already calling on councils to cut spending on certain initiatives to try and balance their books better. the picture is tight for product spending and certainly, the projections for government spending already in the next parliament, they are already working with, have especially been tight. something to watch out for is how they recalibrate that in the next year. sounds quite noisy there, all kinds

of music in the background there. we will leave you for the moment but we will leave you for the moment but we will be back with you later. also with me is our economics correspondence who joins us from a little quieter place, the bbc newsroom in central london. 0ne newsroom in central london. one thing i would talk about, we are talking about this reduction, 2p on the pound national insurance, but there is a wider context about taxes that we should probably discuss, and that we should probably discuss, and thatis that we should probably discuss, and that is that tax thresholds have not changed so in real terms over the years, taxes have gone up, haven't they? years, taxes have gone up, haven't the ? , . ., years, taxes have gone up, haven't the? , . ., ., they? very much so. that tax threshold _ they? very much so. that tax threshold being _ they? very much so. that tax threshold being frozen - they? very much so. that tax threshold being frozen thing i they? very much so. that tax| threshold being frozen thing is actually a bigger change. so the total that the government would be giving away to us if they do for p in the pound, that would adopt a 20 billon pounds but on the other hand, they have taken about 35 billion off

working households etc by freezing these thresholds and the reason that happens is this, we don't notice it but it is still the chancellor taking notes of money off you. the way it works is, before, it is to be that you did not pay tax, the threshold above which you start paying tax, that used to go up with inflation so if your pay started to go inflation so if your pay started to 9° up, inflation so if your pay started to go up, it would follow it up, but now it is frozen, that was rishi sunak�*s decision, your pay goes up on the threshold does not, so a greater chunk of your salary is exposed to tax. that has a huge effect on then there are other allegedly stop taxes like council to why�*s that growing up so much? the councils don't have enough money from central government, that is another way of taking money from households. in the middle of a cost of living crisis were incomes have onlyjust of living crisis were incomes have only just started to of living crisis were incomes have onlyjust started to rise past the crisis again, so that is the broader context so before you are grateful for a cut in national insurance, you should be wary of the fact that it

may be that it is given with one hand will it has taken away for the last two years with the other. let us talk about the bigger picture discussion which we have not got into yet, and that is the debt—to—gdp ratio is pretty high and the government has set a target of trying to get it down. if you can explain it to our audience with this means. it explain it to our audience with this means. , ,., ., ., explain it to our audience with this means. , ., ., , ., means. it is important to explain what it doesn't _ means. it is important to explain what it doesn't mean. _ means. it is important to explain what it doesn't mean. it - means. it is important to explain what it doesn't mean. it means l means. it is important to explain| what it doesn't mean. it means it means. it is important to explain i what it doesn't mean. it means it is high relative to the last 20 or 30 years but if you look at a chart of the national debt going back 100 years, it looks pretty low. that was much higher after world war ii and then we said, we have to cut puppets services or we have to raise taxes in order to pay for everything? no, of course they didn't they launched the nhs and universal education and raised taxes quite a lot. so it doesn't follow that because debt is high that you must cut spending and in fact, debt has a utility value so you and i don't think, i will not

get a mortgage because that is too large, you think, we need a house, perhaps we had better think about it, that is look at the debt servicing costs, can we afford it that way? that is the rational calculation stop what is not rational is to say, that looks like a scary figure, let us raise taxes. we also have to bear in mind that when we talk about fiscal headroom, we are talking about headroom against a subjectively chosen seeing so i have this much headroom but i have chosen this much as my ceiling. that is a clinical choice, not something dictated by the markets. if you ignore any kind of fiscal constraints whatsoever, you get in trouble on the market but that does not mean that we have to dictate policy according to fiscal headroom as if that was the most important thing in the world. carbonate zero is important, like having an nhs that works. we

is important, like having an nhs that work-— is important, like having an nhs that worka— is important, like having an nhs that works. is important, like having an nhs thatworks. ~ . ., , , ., that works. we had a few guests on talkin: that works. we had a few guests on talking about _ that works. we had a few guests on talking about concerns _ that works. we had a few guests on talking about concerns over - talking about concerns over affordability of food, of people who are carers, those struggling to balance and juggle that. can we expect measures that will remedy some of their concerns with mac there is some talk of that there have been sufficient for us with the care crisis and also a crisis in childcare that it may be the chancellor once to a piece that body of political opinion by doing something for them. usually there are measures _ something for them. usually there are measures that _ something for them. usually there are measures that are _ something for them. usually there are measures that are produced i something for them. usually there are measures that are produced atj are measures that are produced at budget day to cater for certain concerns that have reached the loud enough volume that the chancellor feels he has to do something about it. but the broader context is that the economy is stagnant, barely growing. it is only growing because we are adding people and in terms of how the economy is doing her person, it is not very good at all.— it is not very good at all. thank ou so it is not very good at all. thank you so much — it is not very good at all. thank you so much for— it is not very good at all. thank you so much for taking - it is not very good at all. thank you so much for taking us - it is not very good at all. thank. you so much for taking us through it is not very good at all. thank- you so much for taking us through so much of that detail. we'll be back

with andy the day. stay with us on bbc news. we continue our coverage of today's budget with the chancellor said to speak at 12:30pm today in the house of commons with that spring budget. just a reminder, you are with special coverage of today's budget on the bbc news channel. chancellor jeremy hunt has arrived in parliament as he prepares to deliver his spring budget speech where he will outline the government's tax and spending plans, due injust over and spending plans, due injust over an hour's time. among a series of measures the chancellor is excited to announce will be another cut in national insurance contributions. the reduction of 2p in the pound will come on top of that identical cut which came into force in january, he announced that last year. we will of course have coverage and will bring you that

statement live as well. to stay with us here on bbc news. i'm now going to be handing over to my colleagues have a special programme. what's almost certainly his last budget before the general election. we are with you until 3.30 this afternoon. this is politics live. with me in the studio now, the bbc�*s economics editor, faisal islam and political editor, chris mason.

and i'll bejoined later by the chief secretary to the treasury and her labour shadow. we'll hear from the snp and the liberal democrats, plus expert analysis and reaction from the financial markets. reporter: is this an - election-winning budget? is this really _ a turning point, chancellor? but could today be a repeat of last year's autumn statement? there isjeremy there is jeremy hunt there isjeremy hunt with his treasury team gathering in the traditional photo call, holding up the traditional red box, inside which is his budget, which he will unveil shortly in the house of commons. could today be a repeat of last year's autumn statement? i'm going to go further and cut the main rate of employee national insurance by two percentage points, from 12% to 10%. another 2p cut in national insurance is widely expected today — but could there be more? but with money tight — in the midst of a recession — those giveaways are likely to be

paid for by spending cuts