Jeremy Hunt has announced 30 hours of free childcare for children under five in his first Spring Budget as Chancellor,
Hunt confirmed that energy support will continue for the next three months, and said that the Office of Budget Responsibility has forecast that inflation will drop to 2.9% by the end of the year, one of Rishi Sunak's "five priorities".
While Labour leader Keir Starmer accused the Chancellor of "dressing up stagnation as stability" and putting the country "on a path of managed decline". He said the UK is the worst performing nation in the G7, adding that the country has spent "13 years stuck in a doom loop" under the Conservatives.
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Hunt: OBR says inflation will drop to 2.9% by end of year
Jeremy Hunt is going through the Office for Budget Responsibility's analysis of his statement. He earlier said that this Budget would fulfil Rishi Sunak's "five promises", which include halving inflation. He says the OBR has forecast inflation to drop from 10.7% in the final quarter of last year, to 2.9% at the end of 2023.
30 hours of free childcare for all under fives
The Chancellor has announced 30 hours of free childcare for all under-5s from the moment maternity care ends, where eligible.
Jeremy Hunt told the Commons: “I today announce that in eligible households where all adults are working at least 16 hours, we will introduce 30 hours of free childcare not just for three- and four-year-olds, but for every single child over the age of nine months.
“The 30 hours offer will now start from the moment maternity or paternity leave ends. It’s a package worth on average £6,500 every year for a family with a two-year-old child using 35 hours of childcare every week and reduces their childcare costs by nearly 60%. Because it is such a large reform, we will introduce it in stages to ensure there is enough supply in the market.
“Working parents of two-year-olds will be able to access 15 hours of free care from April 2024, helping around half a million parents.
“From September 2024, that 15 hours will be extended to all children from 9 months up, meaning a total of nearly one million parents will be eligible. And from September 2025 every single working parent of under 5s will have access to 30 hours free childcare per week.”
Thank you for joining our Spring Budget live blog, you can find more analysis and explainers on the NationalWorld Money page.
When is the Budget?
It may feel as though it has been only weeks since the Chancellor delivered his Autumn Statement, my colleague Henry Sandercock writes. And that’s because it has been, with the fiscal speech having been delivered on 17 November 2022.
To add to the confusion, it was the third major announcement about the UK’s public finances in little more than a month. The mini budget delivered by Kwasi Kwarteng and Liz Truss in September was quickly followed by a bunch of major U-turns when Truss ditched Kwarteng for Hunt in October.
This time around, the year’s headline tax and spend announcement should be the only big fiscal event for at least six months. It is due to take place after PMQs at 12.30pm, and will be accompanied by a forecast from the Office for Budget Responsibility (OBR).
What will be in the Spring Budget?
We have already been given an idea of some of the new policies Jeremy Hunt will announce during the Spring Budget 2023, Henry reports. Here is a list of the four key things we know about so far:
‘Back to work’ measures
The Spring Budget is already being unofficially dubbed the ‘back to work Budget’ as the government has briefed that it wants to get parents and over-50s back onto the payroll.
More free childcare hours are mooted to be under consideration by the Treasury, with Hunt having already confirmed he is also looking into potentially reforming Universal Credit for parents.
The Chancellor is also likely to announce an adjustment to the pension lifetime allowance, which could make it more lucrative for early retirees to return to the workplace. Longer-term, he may also announce new plans to bring forward the raising of the state retirement age, as well as announce new rules on how the state pension is calculated.
After significant pressure from cost of living experts, including Martin Lewis and the Resolution Foundation think tank, Jeremy Hunt appears to be set to announce a delay to the introduction of the higher rate of the energy price guarantee.
Bills were set to go up 20% to an average of £3,000 a year from 1 April, at the same time as the government energy bills support scheme was due to end. It was warned that this shock to households would not only damage people’s budgets, but could also affect their health.
But Hunt appears to have relented and looks set to announce the £3,000 limit will be delayed until the summer, by which time energy bills are predicted to have become cheaper anyway.
Alongside this announcement, Hunt will say households with prepayment meters will not face the same bill premiums as before. It comes after the force-fitting of the meters in vulnerable people’s homes came under the spotlight earlier this year.
With a war raging in Ukraine and scathing reports about the combat readiness of the British armed forces, calls for the Ministry of Defence (MoD) to get more money have been growing.
Defence Secretary Ben Wallace reportedly wanted Jeremy Hunt to give him an extra £11 billion, while others have called for spending on the military to rise from 2% of GDP to 3%. But Rishi Sunak has said the department will get an additional £5 billion over the next two years.
This package will equate to an extra £1.98 billion this year and £2.97 billion next year, and will go towards the AUKUS pact, weapons for Ukraine and UK munitions improvements. Wallace said he is “delighted” by the news, but Tory chair of the defence select committee Tobias Ellwood said Russia and China would be “breathing a sigh of relief”.
Date of Boris Johnson Partygate grilling set
Not directly Budget related, but still doubtless of interest to any politics buffs reading this live blog - a date has been set for Boris Johnson to appear before the Privileges Committee over Partygate.
The former Prime Minister will be questioned by the cross-party committee, chaired by Labour MP Harriet Harman, over whether he lied to Parliament when he claimed no rules were broken at Downing Street during the coronavirus pandemic, my colleague Imogen Howse reports. The session will be held in public on Wednesday 22 March - with Johnson’s appearance set to be televised live from 2pm.
It comes just weeks after a preliminary report into Partygate said Covid-19 rules breaches would have been “obvious” to the then Prime Minister, meaning there is evidence that he misled the House of Commons on multiple occasions. Johnson has rejected this verdict and claimed that the inquiry process will “vindicate” him.
Hunt to make huge childcare giveaway
Good morning and welcome back to NationalWorld's Spring Budget live blog. This morning the papers are full of reports of a big childcare giveaway by the Chancellor Jeremy Hunt. He's expected to announce 30 hours of free childcare for all one and two-year-olds to "break down the barriers" to work. The Times reports Hunt will also increase funding for an existing free childcare programme for three and four-year-olds.
'Budget for growth'
Jeremy Hunt has briefed out part of his speech for this afternoon's Spring Budget. He is expected to reference the “difficult decisions” taken last November to stabilise the markets, following the short-lived premiership of Liz Truss. Hunt will say: "Today, we deliver the next part of our plan: a Budget for growth.
“Not just growth from emerging out of a downturn. But long term, sustainable, healthy growth that pays for our NHS and schools, finds good jobs for young people, provides a safety net for older people… all whilst making our country one of the most prosperous in the world.”
Hunt will promise a growth plan that will remove “the obstacles that stop businesses investing” while also “tackling the labour shortages that stop them recruiting” and “breaking down the barriers that stop people working”.
Energy price guarantee extended for three months
The energy bill support scheme will be extended for a further three months, Jeremy Hunt has announced.
My colleague Claire Schofield reports that the energy price guarantee, which caps average household bills at £2,500, will be extended at its current level from April to June.
It had been due to rise to £3,000 from next month, but it will now stay frozen at its current level in a move to help ease the cost of living as the Chancellor sets out a “Budget for growth”.
The three-month extension of the energy price guarantee at its current £2,500 level will save a typical household around £160, the government said. The cost of scrapping the planned 20% increase will amount to around £3 billion.
More than 400,000 striking on Budget day
More than 400,000 workers will be taking to the picket lines today in search of better pay and conditions as Chancellor Jeremy Hunt announces his new Budget. It is thought to be the biggest mass walkout since the new wave of industrial action started.
Those striking today (Wednesday 15 March) include teachers, university lecturers, civil servants, junior doctors, London Underground drivers and BBC journalists.