Budget 2023: The key takeaways - from free childcare to energy bills cap
ITV News Business Editor Joel Hills breaks down today's budget and what it means for the government
By Talia Shadwell, ITV News content producer
Chancellor Jeremy Hunt has unveiled a "back to work" Budget he claims will stimulate economic growth.
The government's headline announcements today include a major expansion of free childcare, keeping the energy price cap, and pensions and benefits overhauls.
The Conservatives hope Mr Hunt's Spring Budget measures will smooth the path to employment for the 'economically inactive' - targeting over-50s, long-term sick and disabled people, and benefits claimants.
Thousands of striking workers calling for better pay and conditions formed the backdrop to Mr Hunt's announcement on Wednesday, as the government faces pressure to soothe the pain of the soaring cost of living, and tame rising inflation and energy bills.
So, now Mr Hunt is unwrapping his Budget, what does it hold in store for you? Here are all the latest details.
Energy price cap stays
The Energy Price Guarantee (EPG), which limits a typical household's annual energy bill to £2,500, will be extended for another three months.
It had been due to increase to £3,000 in April to reduce the burden on state finances, but will now remain in place until the end of June.
However, consumers still face having to find an extra £67 a month to pay their energy bills from April when the government’s separate Energy Bill Support Scheme – which has seen all households receive six monthly payments of £66 or £67 direct to their energy accounts – comes to an end.
The government has also pledged to end the extra costs shouldered by households on prepayment meters, saying they should pay no more than those paying by direct debits.
Labour’s shadow climate secretary Ed Miliband criticised the Chancellor for failing to announce a windfall tax to make oil and gas companies “pay their fair share.”
'Free' childcare expanded
The government will expand 30 hours of funded childcare in England to begin from the time maternity care ends - when a baby reaches nine months of age.
Mr Hunt acknowledged the "career-ending" pressure childcare expenses placed on mothers in particular, as he pledged to tackle "one of the most expensive systems in the world".
The change means 'free' childcare will cover one and two-year-olds as well as three and four-year-olds, in eligible households where all adults are working at least 16 hours a week.
Mr Hunt says the 30 hours offer will now start from the moment maternity or paternity leave ends, and will be introduced in stages to ensure there is enough supply in the childcare market to meet demand.
Working parents of two-year-olds will be able to access 15 hours of funded care from April 2024, and that 15 hours will be extended to all children from 9 months up from September 2024.
From September 2025 every single working parent of under 5s will have access to 30 hours free childcare per week, Mr Hunt confirmed.
The government had faced building pressure to tackle childcare costs so high campaigners have said parents were being forced to leave their jobs.
ITV News Correspondent Sarah Corker looks at how the budget will impact people
The scale of households' childcare bills had prompted nationwide protests late last year, with parents taking to the streets in March of the Mummies demonstrations to call for a better deal.
Responding to concerns the nursery sector will struggle to meet the increased demand, following a string of closures amid cost pressures, Mr Hunt said the government will increase funding paid to nurseries providing funded childcare.
Nurseries offering funded places will get by £204 million from this September, rising to £288 million next year, which Mr Hunt said was a 30% average increase.
Mr Hunt also said the government was changing minimum staff-to-child ratios from 1:4 to 1:5 for two-year-olds in England, although he added this would be optional with no obligation on either childminders or parents to adopt them.
Mr Hunt also announced parents on Universal Credit who are moving into work or wanting to increase their hours will have their childcare costs paid upfront.
The government will increase the maximum they can claim to £951 for one child and £1,630 for two children, which the Chancellor said was an increase of almost 50%School care
The government will also aims for all schools in England to offer care either side of the school day for children by September 2026, the Chancellor said.The government will fund schools and local authorities to increase the care they can provide so all school-age parents can drop their children off from 8am and pick them up before 6pm.
Disability benefits overhauled
The Chancellor launched a new voluntary scheme he said will help disabled people search for work without fear of losing access to benefits.
Mr Hunt said the scheme, called Universal Support, will provide up to £4,000 for people living with disabilities every year to help them find appropriate jobs.
He said the scheme is expected to be taken up by around 50,000 people.
The Chancellor confirmed the Work Capability Assessment will be abolished, and the government will begin separating benefit entitlement from an individual’s ability to work.
More benefits sanctions
The Chancellor also revealed sanctions reforms aimed at getting people on Universal Credit benefits into work, and place pressure on those working 18 hours or less a week to get more work.Mr Hunt said sanctions will be applied "more rigorously" to those who fail to meet strict work-search requirements or choose not to take up a "reasonable" job offer.
Help for carersThe government will nearly double the care relief threshold to £18,140 to give a tax cut to a qualifying carer, worth an average of £450 a year.
No fuel duty increase
The chancellor plans to spend £6 billion on maintaining the 5p fuel duty cut.
Mr Hunt said: “Because inflation remains high, I have decided now is not the right time to uprate fuel duty with inflation or increase the duty.
“So here’s what I am going to do: for a further 12 months I’m going to maintain the 5p cut and I’m going to freeze fuel duty too. That saves the average driver £100 next year and around £200 since the 5p cut was introduced.”The government had faced pressure to help motorists and the heavy vehicle industry workforce avoid paying more to get behind the wheel.
However, environmental campaigners wanted the government to unfreeze fuel duty, in hopes of driving down demand for fossil fuels and meeting Net Zero targets.
Pension limits abolishedThe Chancellor has abolished the lifetime allowance limit on pensions, going further than what was initially expected.Mr Hunt hopes to entice people out of choosing early retirement by ending limits on private pensions pots.
The current lifetime limit means until 2026, savers must begin paying additional tax after their pension pot hits £1.07 million.
Mr Hunt had initially been expected to lift the allowance ceiling to £1.8m - but went further, abolishing it altogether.
He also confirmed an increase in the annual amount workers can pay into their pension pot without incurring a penalty, from the current limit of £40,000 to a new threshold of £60,000.
The Chancellor also announced a new apprenticeship targeted at over-50s who want to return to work, called ‘returnerships.'Mr Hunt said the apprenticeships will operate alongside skills boot camps and sector-based work academies.
Swimming pools boosted
Mr Hunt said he would provide a £63 million fund to “keep our public leisure centres and pools afloat.”
Facilities have faced eyewatering energy costs to maintain facilities, and campaigners had warned the closure of public swimming pools would impact public health.
The chancellor also confirmed £100 million will be given to support thousands of charities and community organisations.
Help for pubs
A “Brexit pubs guarantee” will see the duty on draught products in pubs up to 11p lower than the duty in supermarkets from August 1, Mr Hunt has announced.
The Chancellor said it was not possible to increase the "generosity" of Draught Relief while he UK remained in the EU.
“British ale may be warm, but the duty on a pint is frozen,” he said.
The Chancellor also said the government would increase tobacco duty.
New investment zones
The Chancellor announced 12 new investment zones, which he labelled “12 potential Canary Wharfs,” suggesting they could compare to London's key financial centre.
He named nine areas in England the government had identified as having investment centre potential, including: the West Midlands, Greater Manchester, the North East, South Yorkshire, West Yorkshire, East Midlands, Teesside, and Liverpool.
Mr Hunt said there will also be at least one investment centre in each of Scotland, Wales and Northern Ireland.
Support for veterans
Mr Hunt said the government will provide a more than £30 million package to increase the capacity of the Office for Veterans’ Affairs.
The Chancellor said this will go toward supporting veterans with injuries returning from their service, and increasing the availability of veteran housing.
'Levelling up' - and filling potholes
The Chancellor announced a series of levelling-up and local transport-related funding pots.
The government plans to invest more than £200 million in local regeneration projects across England, a further £161m for regeneration projects in Mayoral Combined Authorities and the Greater London Authority, and £400m for new Levelling Up Partnerships in areas including Redcar and Cleveland, Blackburn, Oldham, Rochdale, Mansfield, South Tyneside, and Bassetlaw.
He also announced a second round of City Region Sustainable Transport Settlements, allocating £8.8 billion over the next five-year funding period.
Mr Hunt also said the £500m already allocated for local authorities to tackle potholes would be increased by a further £200m next year.
What didn't the Budget include?
There was no mention of an increase to the pay of public sector workers, an issue which has led to months of disrupting strikes.
Paul Johnson, the director of the Institute for Fiscal Studies also highlighted that the Budget contained "nothing on the big tax rises that are coming in for most of us in April".
The housing crisis, which has seen private rent fees rising by up to 15% over the last year, was also not mentioned in the Budget.
The charity Shelter said: "Homelessness has almost doubled in the last 10 years and yet again we have a Budget that does nothing to help struggling renters who are drowning in debt and rapidly rising rents. It is outrageous that the government has chosen to keep housing benefit frozen at 2020 levels when its own figures show rents have risen by more than 8% in this time."
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