Chancellor Jeremy Hunt will today announce the details of his first Spring Budget since he took the role in October last year.
Mr Hunt is set to announce free childcare for under-threes and tax incentives for people to pay into pensions for longer in his ‘Budget for growth’.
He is also expected to announce in the House of Commons this afternoon further support for households in paying high energy bills.
The Chancellor has already confirmed that the energy price guarantee, which caps bills at £2,500 for the average household, will be extended at its current level from April to June – as Britons continue to be squeezed in the cost-of-living crisis.
It had been due to rise to £3,000 in April and the cost of scrapping the planned 20% increase will cost the Treasury around £3 billion.
Chancellor Jeremy Hunt (centre; PM Rishi Sunak left; Environment Secretary Therese Coffey to his right) will today announce the details of his first Spring Budget
What time will the Chancellor deliver the budget today?
Mr Hunt is due to deliver his first Budget to MPs in the House of Commons at 12.30pm this afternoon.
This will happen directly following Rishi Sunak being quizzed by Labour Leader Sir Keir Starmer during Prime Minister’s Questions at midday.
Today is the Chancellor’s second financial plan following his Autumn Statement on November 17 which effectively reversed many of the measures introduced by then-Liz Truss and his predecessor Kwasi Kwarteng in their mini-Budget in September.
Following Mr Hunt’s statement, Shadow Chancellor Rachel Reeves will respond to the plans in the Commons.
Will the Chancellor announce more free childcare?
A key plank of the Budget is expected to be a package of measures aimed at removing barriers to work – with a major part of that being extended levels of free childcare.
The current provision of up to 30 hours a week of funded childcare in England for parents of three and four-year-olds is expected to be extended to also cover one- and two-year-olds, if both parents each earn less than £100,000.
Under Mr Hunt’s plans the scheme will be massively extended so parents who work can get 30 free hours a week when their children are aged both one and two.
Underfunding for the 30-hour provision has seen nurseries close, while others have pushed the costs on to parents of younger children
He is also expected to raise the hourly rate the Government pays to providers.
UK childcare fees are among the highest in the world, with spiralling costs in areas such as energy and food forcing day nurseries to hike their charges to levels some parents can no longer afford.
Yet underfunding for the 30-hour provision has seen nurseries close, while others have pushed the costs on to parents of younger children.
Paul Johnson, head of the independent economic think tank the Institute for Fiscal Studies, said sweeping reform of childcare is needed.
He said: ‘Many will welcome extension of free childcare. Look for funding though – funding current entitlement has been cut 13% since 2017.
‘As universal support has expanded, targeted support for children most in need has contracted. Whole system is hugely complex. Needs proper review.’
Jeremy Hunt is also expected to announce that childcare support will be paid on Universal Credit upfront, rather than in arrears, with an increased amount it is possible to claim.
Prime Minister Rishi Sunak hosts a Cabinet meeting ahead of The Chancellor of the Exchequer presenting his Budget today
Chancellor Jeremy Hunt pictured preparing for his Spring Budget last night
Will tax cuts be announced at the Budget?
The Chancellor is set to announce some tax cuts in the Budget, but these are not likely to go as far some Tory MPs would like, as he is set to rise corporation tax rates.
Despite months of lobbying from MPs and businesses, the Chancellor will push ahead with increasing corporation tax from 19 per cent to 25 per cent and Rishi Sunak’s ‘Superdeduction’ scheme is coming to an end. He will also snub pleas for early income tax cuts.
However, there will be new tax breaks for firms that invest in the UK, with claims they could be worth up to £11billion a year.
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 lifetime allowance on pensions to rise from £1.07million to £1.8million, after complaints that many middle-earners were finding it was not worth them working due to tax penalties.
While resisting pressure from Tory backbenchers for significant tax cuts, Jeremy Hunt will unveil a series of policies designed to stimulate the economy.
He is expected to reject the ‘narrative of decline’ and vow to build on the country’s competitive advantages to spread wealth and opportunity.
Official figures yesterday showed vacancies across the UK have fallen for the eighth month in a row as firms hold back on hiring amid woes in the wider economy.
Mr Hunt will offer an olive branch to business with plans for 12 low-tax ‘investment zones’ and will try to encourage older workers to stay in employment with skills bootcamps, training and ‘midlife MOTs’.
Will help for energy bills be announced in the Budget?
The Treasury confirmed early this morning that the planned £500 hike in average energy bills, due to come into force next month, has been ditched.
Instead the level will stay at £2,500 for at least another three months – extending the energy price guarantee from April to June – by which time prices are expected to have fallen back.
Action is also due on prepayment meters with Mr Hunt scrapping the so-called ‘prepayment premium’ – which sees those with the meters charged more than those on direct debit – from July.
Prime Minister Rishi Sunak said: ‘We know people are worried about their bills rising in April, so, to give people some peace of mind, we’re keeping the energy price guarantee at its current level until the summer, when gas prices are expected to fall.
‘Continuing to hold down energy bills is part of our plan to help hardworking families with the cost of living and halve inflation this year.’
Falling global energy prices mean that the current level will be extended to ‘bridge the gap’ until costs are expected to fall below the cap.
Mr Hunt said: ‘High energy bills are one of the biggest worries for families, which is why we’re maintaining the energy price guarantee at its current level.
‘With energy bills set to fall from July onwards, this temporary change will bridge the gap and ease the pressure on families, while also helping to lower inflation too.’
Will fuel duty remain frozen after the Budget?
Jeremy Hunt is expected to keep fuel duty being frozen for a 13th year in a row in today’s Budget.
The ‘temporary’ 5p-a-litre cut in the tax is also set to be maintained.