This week, the Chancellor delivered his Spring Budget, breaking down barriers to work and tackling labour shortages head on. Against the backdrop of unprecedented circumstances, the country will now avoid technical recession later this year and the OBR expects inflation in the UK will fall from 10.7% in the final quarter of last year to 2.9% by the end of 2023.
The Chancellor announced 30 hours of free childcare for every child over the age of 9 months, with support being phased in until every single eligible working parent of under 5s gets this support by September 2025.
The government will also pay the childcare costs of parents on Universal Credit moving into work or increasing their hours upfront, rather than in arrears – removing a major barrier to work for those who are on benefits. The maximum they can claim will also be boosted to £951 for one child and £1,630 for two children – an increase of around 50%.
The Chancellor went on to set out plans to continue to support households with cost-of-living pressures including keeping the Energy Price Guarantee at £2,500 for the next three months and ending the premium that over 4 million households pay on their prepayment meter, bringing their charges into line with comparable customers who pay by direct debit. Taken together with all the government’s efforts to help households with higher costs, these measures bring the total support to an average of £3,300 per UK household over 2022-23 and 2023-24.
To help household budgets further, the planned 11 pence rise in fuel duty has been cancelled, maintaining last year’s 5p cut for another twelve months, saving a typical driver another £100 on top of the £100 saved so far since last year’s cut.
The Draught Relief has also been significantly extended from 5% to 9.2%, so that the duty on an average draught pint of beer served in a pub both does not increase from August and will be up to 11 pence lower than the duty in supermarkets. The commitment to duty on a pub pint being lower than the supermarket has been termed the “Brexit Pubs Guarantee” by the Chancellor.
The Chancellor also set out a comprehensive plan to remove the barriers to work facing those on benefits, those with health conditions and older workers. An increase in the pensions Annual Allowance from £40,000 to £60,000 and the abolition of the Lifetime Allowance will remove the disincentives to working for longer. A new ‘Returnerships’ skills offer for older workers and more stringent Universal Credit job search requirements also feature in the plan that will boost the UK’s workforce, fill vacancies and support economic growth.
A new policy of ‘full expensing’ will be introduced for the next three years to boost business investment. This offers 100 per cent first-year relief on new qualifying investments in main rate plant and machinery from 1 April 2023 until 31 March 2026. For every pound a company invests, their taxes are cut by up to 25p–this puts £25 billion back into the economy over the next three years. Jeremy Hunt signalled an intention to make this scheme – which covers equipment for factories, computers and other machinery - permanent when responsible to do so.
Richard Fuller MP said:
The government is working hard to deliver on Rishi Sunak's priorities to halve inflation, grow the economy and reduce debt so we can create better-paid jobs and opportunities across the United Kingdom, guaranteeing a better future for the next generation.
Full details of the Budget measures can be found here.
You can hear listen to Richard's views on the budget on BBC 3 Counties Radio here and GB News here.
