- By Brian Wheeler & Chris Mason, Political Editor
- BBC News
Jeremy Hunt insists his budget will get young parents and the over-50s back to work – and won’t just benefit the wealthy saving for retirement.
The Chancellor told the BBC he wants to fill a million vacancies across the UK so businesses can “grow faster”.
It plans to expand free childcare in England and scrap the £1million limit on tax-free pension savings.
Labor says the pensions movement will only help the top 1% – and Mr Hunt was ‘disguising stagnation as stability’.
Mr Hunt says the UK economy will avoid a recession, with inflation forecast to more than half by the end of next year.
But he says a shortage of workers is holding back growth and he wants more people over 50, people with disabilities and parents of young children to return to work.
Asked by the BBC why, after 13 years of Tory government, a whole generation is not doing as well as his parents, he said his plan for growth meant ‘better jobs and better opportunities’.
“We’ve had half a million people leaving the workforce during the lockdowns, that’s an effect you haven’t seen in other countries and that’s why I announced the measures that I announced today to encourage people to get back to work,” he said. said.
Mr. Hunt delivered his budget statement to the House of Commons, in a speech lasting more than an hour.
He said: “Faced with huge challenges, I report today on a UK economy that proves the doubters wrong.”
The economy will contract by 0.2% next year, according to the Office for Budget Responsibility, which is better than expected and does not technically count as a recession.
Inflation is expected to decline from 10.7% in the last quarter of last year to 2.9% by the end of 2023.
According to the OBR, living standards are expected to fall further from the biggest drop since records began, but the decline will not be as severe as it had predicted in November.
The economy is expected to grow again – but house prices are expected to fall 10% by 2025.
Mr Hunt announced tax breaks for businesses to spur investment, but said labor shortages were holding back the economy.
He announced plans to encourage over-50s, who took early retirement – including 350,000 who did not return to work after the pandemic – to re-enter the workforce, describing them as “the most qualified and most experienced that we have”.
There will be more “Mid-Life MOT” courses and new “Returnership” programs to improve skills.
But the big announcement was the abolition of limits on how much workers can accumulate in retirement savings over their lifetime before paying taxes.
The government estimates that doctors and senior teachers currently have an incentive to retire when they reach the limit and that removing it will keep 15,000 of them in the workforce.
Mr Hunt has also confirmed plans to expand free childcare in England.
“I don’t want a parent with a child under five to be prevented from working, if they want to, because it’s damaging to our economy and unfair, especially to women,” Mr. Hunt to MPs.
He promised up to 30 hours a week of free childcare for eligible households in England with children as young as nine months, up from three and four under the current policy.
The progressive policy, which won’t be fully introduced until September 2025, will be worth up to £6,500 a year for working families.
He has also pledged to extend wraparound care at the start and end of the school day for parents of older children and to change staff-to-child ratios in England to expand childcare provision. children, although the target date for the measure is September 2026.
And he announced his intention to abolish work capacity assessments, which he said would “decouple entitlement to benefits from an individual’s ability to work”.
From 2026 the government will use another test, currently used to assess eligibility for Personal Independence Payments, the main disability benefit, to decide whether a person is eligible for additional payments.
The OBR said Mr Hunt’s policies could increase the workforce by as much as 240,000 or as low as 55,000, depending on how parents, people with disabilities and those over 50 react to the incentives.
The watchdog also pointed to the April 2021 decision by Rishi Sunak, when he was chancellor, to freeze tax thresholds, which he said was equivalent to a 4p increase in the base tax rate. ‘income tax.
The move, dubbed a ‘stealth tax’ by critics, is due to come into force next month and will boost government revenue by £29.3billion a year.
Labor leader Sir Keir Starmer said: “After 13 years in government our economy needed major surgery, but like millions of people across our country this budget leaves us stuck in the waiting room with only an adhesive bandage at hand.
“A country on a path of controlled decline, lagging behind our competitors, the sick man of Europe once again.”
SNP economics spokesman Stewart Hosie said: ‘It is truly pathetic that the Chancellor has failed to cut energy bills, despite having sufficient resources to do so.
Liberal Democrat leader Sir Ed Davey said: ‘This budget shows the Conservative Party is so out of touch it might as well be living on another planet.’ Jeremy Hunt and Rishi Sunak had the opportunity to show they care about the cost of living. crisis affecting millions of British families and pensioners, but they have failed miserably.”