Chancellor Jeremy Hunt is set to unveil a ‘back to work’ Budget today, aimed at addressing the low levels of workforce participation after Covid.
The budget includes plans to provide free childcare for under-threes and tax incentives for people to pay into pensions for longer.
The majority of parents are expected to receive up to 30 hours of funded childcare for one and two-year-olds.
The current freeze on fuel duty will be extended, and the planned rise in the cap on average energy bills next month will be scrapped.
However, despite lobbying, the Chancellor will push ahead with increasing corporation tax and end Rishi Sunak’s ‘Superdeduction’ scheme.
New tax breaks will be provided for firms that invest in the UK, and there will be measures designed to encourage over-50s, the long-term sick and disabled, and benefits claimants back into the workplace.
Changes to pensions are also expected, with the Chancellor likely to allow workers to put more money into their pension pot before being taxed by lifting the lifetime pension allowance.
The Chancellor’s plan promises to 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’.
The plan will focus on measures to encourage the over-50s, the long-term sick and disabled, and benefits claimants back into the workplace.
Mr Hunt will announce the axing of the system used to assess eligibility for sickness benefits, paying parents on universal credit childcare support upfront and increasing the amount they can claim by several hundred pounds.
The childcare provision is set to be massively extended so parents who work can get 30 free hours a week when their children are aged both one and two.
The Chancellor is also expected to raise the hourly rate the Government pays to providers.
The planned £500 hike in average energy bills, due to come into force next month, has been ditched, and action is due on prepayment meters with Mr Hunt scrapping the so-called ‘prepayment premium’ from July.
Labour MP Stella Creasy has branded Mr Hunt’s childcare plan ‘economically illiterate’, warning it would push up demand without addressing supply.
Neil Leitch of the Early Years Alliance said the ‘devil was in the detail’, adding that understanding exactly how this announcement will translate into hourly funding rate changes would be key.
The Chancellor will deliver his Budget speech at 12.30 pm today, promising a ‘Budget for growth’ to make Britain one of the most prosperous countries in the world.
He will unveil a series of policies designed to stimulate the economy and reject the ‘narrative of decline’, vowing to build on the country’s competitive advantages to spread wealth and opportunity.