FUEL duty will stay frozen and parents will benefit from 30 hours of free childcare for one and two-year-olds, Jeremy Hunt confirmed today.
Revealing his long-awaited Spring Budget, the Chancellor set out a major plan to get Brits back to work – including huge reforms to Universal Credit and pensions.
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It comes as the government’s independent economic watchdog today confirmed the UK will AVOID a recession.
In a huge relief for hard-up households, the Office for Budget Responsibility said inflation will more than halve to 2.9% by the end of the year.
And government borrowing will drop from £152.4billion to £63.5billion in 2026.
But GDP won’t return to pre-pandemic levels until the middle of 2024.
And the tax burden will continue to suffocate workers and businesses as it hits a post-war record high of 37.7% of GDP in 2026.
Meanwhile, living standards are expected to fall by 6% from 2021 into 2024 – the largest drop since records began.
A triumphant Mr Hunt said: “I report today on a British economy which is proving the doubters wrong.
“In the autumn we took difficult decisions to deliver stability and sound money.
“The International Monetary Fund says our approach means the UK economy is on the right track.”
Find out more by reading our Spring Budget live blog here.
Spring Budget at a glance
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In the Commons Chamber, Mr Hunt confirmed the current Energy Price Guarantee will be extended for another three months – meaning average bills will stay capped at £2,500 until June 30.
It will save the typical household £160.
From then, gas and electricity costs are predicted to fall to £2,000, meaning ministers will be able to wean the nation off taxpayer support.
In a major win for The Sun’s Keep It Down Campaign, fuel duty WILL stay FROZEN for a 13th year running.
The additional 5p cut to petrol introduced in March 2022 will also stay – and fuel taxes won’t go up in line with inflation either.
Mr Hunt gave a shout out to The Sun for campaigning to help Britain’s hard working motorists.
“I have heard the representations from The Sun newspaper about the impact on motorists,” he said.
“Because inflation remains high, I have decided now is not the right time to uprate fuel duty with inflation or increase the duty.”
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Meanwhile, Brits on benefits and hard-up pensioners will see their payments uprated by 10.1 per cent in April, in line with September’s inflation rate.
And in a huge win for mums, childcare costs will paid upfront for mums going into work from Universal Credit, rather than in arrears – as The Sun have long campaigned for.
The maximum cap on Universal Credit costs increased to £951 for a single child and £1,630 for two – a welcome boost after years being frozen.
Childcare ratio rules were ripped up too – in a bid to bring down costs for mums and dads.
The number of kids childminders can look after will rise from four to five.
At the Budget the Chancellor also launched his major drive to get millions of Brits off work back in the office.
More working Brits will lead to better economic growth and higher household wealth.
“Conservatives believe work is a virtue,” Mr Hunt said.
“So today, I bring forward reforms to remove the barriers that stop people who want to from working.
“Independence is always better than dependence, which is why a Conservative government believes those who can work, should.”
In a huge and welcome change, parents of one and two-year-olds will now get 30 hours of free childcare a week – but only from September 2025.
This should reduce child minding costs by a whopping 60%.
But Mr Hunt was criticised for missing an “opportunity to address the crisis in support for families with disabled children”.
A spokesperson for the Disabled Children’s Partnership said: “A key focus of the Chancellor’s statement was to help get people
back into work, but there is precious little to support parents of disabled children to do so.
“As revealed in our Failed and Forgotten report, three quarters of parents of disabled children have had to give up work or even whole careers because of the lack of support and the time it takes to fight for the services their children need.”
Those looking after young kids will get extra help.
Workers who join the childcare sector will be given £600, rising to £1,200 for those who join through an agency.
A series of “skills bootcamps” will be formed to tempt retirees back into work.
There will also be an expansion to the “mid-life MOT” scheme where people are offered financial advice to see whether they can actually afford to retire early.
Meanwhile, the Work Capability Assessment used to judge eligibility for disability benefits will be scrapped.
Disabled Brits will now be able to enter the workforce without having benefits snatched from them.
At the same time, more than 100,000 Universal Credit claimants will have to step up their search for work or face having their benefits cut, the Chancellor also confirmed.
The minimum hours they must work before having to meet DWP job coaches are raising from 15 to 18 hours.
Over to pensions, around 2million middle-class Brits will benefit from the complete scrapping of the £1m lifetime allowance.
And the £40,000 lid on annual tax-free pension contributions will also be boosted to £60,000 and will apply to everyone.
The move is specifically targeted at doctors who leave the NHS early to avoid being trapped by taxes on their savings.
The Treasury expects it will increase the workforce by around 15,000 people per year.
Mr Hunt said: “These changes will stop over 80% of NHS doctors from receiving a tax charge, incentivise our most experienced and productive workers to stay in work for longer and simplify our tax system.”
Some experts have cast doubt on the Chancellor’s change to pensions, saying its impact will be “hard to predict”.
High earners with a £2million pension pot will receive a tax cut of £275,000, costing taxpayers £70k for every person returned to the labour market.
But in bad news for smokers, the cost of a pack of cigarettes will hit a whopping £11.80.
Fags will rise with 12.7 per cent RPI – plus an extra minimum two per cent bump applied to tobacco products – meaning a pack will jump by more than 15 per cent.
After booze duties were frozen until August, Mr Hunt raised them in line with inflation.
Hated alcohol levies were due to be hiked on February 1, but the Chancellor has already delayed it by an extra six months until August 1.
Drinkers are set for a double-digit tax hike, which could whack 45p on a bottle of wine.
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The Chancellor risks a row with backbench Tory MPs as Mr Hunt hiked corporation tax from 19 to 25 per cent.
The rise is only set to affect around 10% of businesses, but MPs say it will hit growth and cost jobs.
In cheerier news for struggling firms, a dozen pioneering high growth Investment Zones giving tax incentives will be set up across the UK – nicking one of Liz Truss‘ old ideas.
Twelve areas will be “supercharged” with £80 million of funding over five years to improve skills and local infrastructure.
The zones, clustered around universities or research institutions, will focus on sectors such as technology, artificial intelligence and the creative sector, with cash used to improve the planning system and business support.
Eight places in England including Greater Manchester and Tees Valley have been shortlisted to host the zones – with more in Wales, Scotland and Northern Ireland to be revealed by the end of the year.
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Responding to the Spring Budget, Sir Keir Starmer accused the Tories of creating a “doom loop of lower growth, higher taxes and broken public services”.
The Labour Leader said: “A year of stagnation. Growth non-existent. According to the IMF, the worst performing country in the G7 this year.
“This is a failure you can measure not just in the figures but in the empty pockets of working people right across the country.
“13 years without wage growth. 13 years no better off. 13 years stuck in a doom loop of lower growth, higher taxes and broken public services.”
He added: “A broken labour market holding back our prospects, seven million on the NHS waiting lists, ill-health and disability on the rise. And the consequences, as we’ve just heard, deferred to the future.
“The classic short-term sticking plaster cycle. Decisions cynically ducked today. Pain for working people tomorrow. It doesn’t have to be like this.”
