- Brian Wheeler & Chris Mason, Political Editors
- BBC news
The prime minister said his first budget would give parents “almost five times the support” to deal with childcare costs.
Jeremy Hunt claims his budget will allow young parents and people over 50 to return to work.
The prime minister told the BBC he wanted to fill one million vacancies across the UK so businesses could “grow faster”.
He plans to expand free childcare in the UK and remove the £1m cap on tax-free pension savings.
Labor has said it would reverse the pension move if elected, calling it a “top 1% tax cut”.
It was “the wrong time, the wrong priorities,” said Shadow Chancellor’s Rachel Reeves.
Hunt said in his budget speech that inflation was expected to halve by the end of next year and that the UK economy would avoid a recession.
But he says the labor shortage is hampering growth, and says people over the age of 50, people with disabilities, and parents with young children want to get back to work.
Providing 30 hours of free childcare for eligible working parents with 9-month-old children in the UK is a key part of the plan, but will not be fully implemented until September 2025.
Hunt said he wanted to expand childcare support sooner, but first he needed to significantly increase the number of childminders and daycare centers.
As well as removing the £1m cap on how much people can save for their pensions before being taxed more, he raised the annual tax-free threshold for pensions from £40,000 to £60,000.
The change is intended to encourage senior teachers and doctors to continue working.
It was a “budget for the rich” and was asked about the criticism that already wealthy people could save more for their pensions.
“While by definition they generally get higher salaries, young parents receive nearly five times more support to help with childcare costs, and nearly 60% more childcare costs per child. Reduced.
“It will make a big difference for families, but it will also make a big difference for businesses, especially small businesses, who are worried about losing valuable employees when starting a family.”
Tory Budget shows ‘how contactless they are’ – Sturmer
The Office of Budget Responsibility (OBR), the government’s independent forecaster, said the Prime Minister’s policies are likely to add around 110,000 people to the UK workforce, depending on the response to various incentives. increase.
Asked why an entire generation isn’t doing as well as their parents did after 13 years of Conservative government, Hunt said his growth plans meant “better jobs and better opportunities.”
“Half a million people left the workforce during the lockdown,” he added. “This is an effect that has not been seen in any other country and that is why I am announcing today the measures to encourage people to return to work.”
One senior government official described it as “a stable budget as she goes” after Liz Truss’ short-lived prime ministerial upset.
The OBR said the UK economy will contract by 0.2% next year.
Inflation is projected to ease to 2.9% by the end of 2023 from 10.7% in the fourth quarter of last year.
According to OBR, living standards are expected to continue to suffer their biggest drop since records began, but not as much as they predicted in November.
The economy is projected to return to growth, but house prices are projected to fall 10% by 2025.
The OBR also highlighted its decision to freeze the tax threshold equivalent to a four-pence increase in the basic income tax rate in April 2021, when Rishi Sunak was prime minister.
The move, dubbed a ‘stealth tax’ by critics, is due to come into force next month and will add £29.3bn a year to the government’s revenues.
However, Hunt said companies can deduct the amount they invest in IT equipment and machinery from their taxable profits over the next three years.
In his speech, Hunt said he would expand wraparound care at the beginning and end of school for parents with older children and change England’s staff-to-child ratio to expand childcare supply. I also promised to The measurement he was September 2026.
From 2026, the government will use a separate test currently used to assess eligibility for the main disability benefit, the Personal Self-Support Fund, to determine whether someone is eligible for additional payments. judge.
Other measures announced in the budget include:
- Extend support for current level energy bills for an additional 3 months
- Users with a prepaid meter will pay the same price as direct debit customers, saving £45 a year in utility bills from July.
- Liquor tax increased by 10.1% from August 1st
- Refrigeration duty imposed on draft beer to support ‘great British pubs’
- Tobacco tax hikes inflation by 2%.
Labor leader Sir Kea Sturmer said, “After 13 years in his government, our economy required major surgery, but like millions of people across the country, this budget It just left us stuck in the waiting room with plaster on our hands.
“A country on a path of controlled decline and lagging behind its competitors, again the sick man of Europe”.
SNP economic spokesman Stewart Hosey said it was “absolutely pathetic that the Prime Minister was unable to cut energy bills despite having ample financial resources.”
Liberal Democrat leader Sir Ed Davey said: “Jeremy Hunt and Rishi Snack have an opportunity to show they care about the cost of living crisis that is hitting millions of families and pensioners in the UK. However, it failed miserably.
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