Chancellor Jeremy Hunt will today announce details of his first spring budget since taking office in October last year.
Mr. Hunt is set to announce free child care for children under three and tax breaks for people to pay pensions longer in his “Budget for Growth.”
He is also expected to announce in the House of Commons this afternoon increased support for households to pay high energy bills.
The Chancellor has already confirmed that the energy price guarantee, which limits bills to £2,500 for the average household, will be extended to its current level from April to June, as Britons continue to be pressured by the cost of electricity crisis. life.
It was due to rise to £3,000 in April and the cost of scrapping the planned 20% rise will cost the Treasury around £3bn.
Foreign Secretary Jeremy Hunt (centre; Prime Minister Rishi Sunak left; Environment Secretary Therese Coffey right) will announce details of his first spring budget today.
What time will the Chancellor deliver the budget today?
Mr Hunt is due to deliver his first budget to MPs in the House of Commons at 12:30pm this afternoon.
This will come immediately after Rishi Sunak is questioned by Labor leader Sir Keir Starmer during Prime Minister’s Questions at noon.
Today marks the Chancellor’s second financial plan after his Autumn Declaration on November 17, which effectively reversed many of the measures introduced by then-Liz Truss and her predecessor Kwasi Kwarteng in their September mini-budget.
Following Mr Hunt’s statement, Shadow Chancellor Rachel Reeves will respond to the plans in the House of Commons.
Will the Chancellor announce more free child care?
A key element of the budget is expected to be a package of measures aimed at removing barriers to work, and a major part of that will be the extension of free child care tiers.
The current provision of up to 30 hours a week of subsidized childcare in England for parents of three- and four-year-olds is expected to be extended to cover one- and two-year-olds as well, if both parents earn less than £100,000.
Under Mr. Hunt’s plans, the scheme will be massively expanded so that working parents can get 30 free hours a week when their children are one or two years old.
Shortages of funds for the 30-hour provision have caused daycare centers to close, while others have pushed the costs onto parents of younger children.
The hourly rate that the government pays to providers is also expected to increase.
Childcare fees in the UK are among the highest in the world, with spiraling costs in areas such as energy and food forcing nurseries to raise their fees to levels some parents can no longer afford.
However, funding shortages for the 30-hour provision have caused daycare centers to close, while others have pushed the costs onto parents of younger children.
Paul Johnson, director of the independent economic think tank Institute for Fiscal Studies, said radical child care reform is needed.
He said: ‘Many will welcome the extension of free childcare. However, look for financing: the current financing entitlement has been reduced by 13% since 2017.
“As universal support has expanded, targeted support for children most in need has been reduced. The whole system is enormously complex. It needs a proper review.
Jeremy Hunt is also expected to announce that child care support will be paid with Universal Credit in advance, rather than in arrears, with a higher amount that can be claimed.
Prime Minister Rishi Sunak hosts a cabinet meeting before the Finance Minister presents his budget today.
Chancellor Jeremy Hunt pictured preparing for his spring budget last night
Will tax cuts be announced in the Budget?
The chancellor is ready to announce some tax cuts in the budget, but they are not likely to go as far as some Conservative MPs would like, as he is set to raise corporate tax rates.
Despite months of lobbying by parliamentarians and businesses, the Chancellor will go ahead with raising corporate tax from 19 to 25 percent and Rishi Sunak’s ‘super deduction’ scheme is coming to an end. He will also reject pleas for early income tax cuts.
However, there will be new tax breaks for companies investing in the UK, and it is claimed that they could be worth up to £11bn a year.
Changes to pensions are also expected, with the Chancellor likely to allow workers to put more money into their pension fund on a pre-tax basis by removing the lifetime pension allowance.
The lifetime allowance for pensions was increased from £1.07m to £1.8m, following complaints that many middle-income people were finding it wasn’t worth working due to tax penalties.
While resisting pressure from Conservative MPs for major tax cuts, Jeremy Hunt will unveil a series of policies designed to stimulate the economy.
He is expected to reject the ‘decline narrative’ and vow to harness the country’s competitive advantages to spread wealth and opportunity.
Official figures yesterday showed that vacancies across the UK have fallen for the eighth month in a row, as businesses hold back from hiring amid troubles in the broader economy.
Mr Hunt will offer an olive branch to companies with plans for 12 low-tax “investment zones” and will try to encourage older workers to stay on the job with boot camps, training and “mid-life MOTs” .
Will aid for energy bills be announced in the Budget?
The Treasury confirmed this morning that the planned £500 increase in average power bills, due to come into effect next month, has been abandoned.
Instead, the level will remain at £2,500 for at least another three months, extending the energy price guarantee from April to June, by which time prices are expected to have fallen again.
Action should also be taken on prepaid meters with Mr Hunt removing the so-called ‘prepaid premium’, which causes those with meters to charge more than those with direct debit, starting in July.
Prime Minister Rishi Sunak said: “We know that people are worried about the increase in their bills in April, so to give them peace of mind, we will keep the energy price guarantee at its current level until the summer, when it is expected let gas prices fall.
“Continuing to keep energy bills low is part of our plan to help working families with the cost of living and cut inflation in half this year.”
Falling global energy prices mean the current level will be extended to “close the gap” until costs are expected to fall below the cap.
Hunt said: ‘High energy bills are one of the biggest concerns for families, which is why we are keeping the energy price guarantee at its current level.
“With energy bills expected to drop from July, this temporary change will close the gap and ease the pressure on families, while helping to reduce inflation.”
Will the fuel tax stay frozen after the Budget?
Jeremy Hunt is expected to keep the fuel tax frozen for the 13th consecutive year in today’s Budget.
The ‘temporary’ cut of 5 pence per liter in the tax will also remain.