Budget 2023 – live updates: Pension lifetime allowance and childcare changes at a glance

OBR forecasts biggest fall in living standards on record as Labour’s Sir Keir Starmer accuses chancellor Jeremy Hunt of ‘permanent tax cut for wealthy’

Budget 2023: Pension lifetime allowance cap abolished

Jeremy Hunt has promised a major expansion in state-funded childcare and tax breaks for businesses in Budget measures aimed at boosting economic growth.

The Chancellor said a recession would be avoided and inflation would fall dramatically as the economy was “proving the doubters wrong” in his statement to the Commons on Wednesday.

In an effort to remove barriers to work, he promised up to 30 hours a week of free childcare for eligible households in England with children as young as nine months.

Mr Hunt resisted demands from Tory MPs to scrap April’s increase in corporation tax from 19% to 25%, but he instead promised a set of reliefs to help firms reduce their bills.

And as part of a package aimed at helping with the cost of living, the Chancellor said the energy price guarantee will be extended at its current level from April to June.

However, fiscal watchdog the Office for Budget Responsibility forecast the biggest fall in living standards on record.

The OBR upgraded its growth forecast for 2024 from 1.3% to 1.8%, but downgraded predictions for the following years to 2.5% in 2025, 2.1% in 2026 and 1.9% in 2027.

Key Points

• Watchdog forecasts biggest fall in living standards on record
• UK will avoid recession in 2023, chancellor says
• Chancellor scraps lifetime allowance limit on pensions
• Hunt announces huge reform in childcare to help parents get back into work
• Hunt announces ‘biggest change to our welfare system in a decade’
• Government will add £11bn to defence budget over five years
• Chancellor will invest over £200m in local regeneration projects in widescale levelling-up series

[15 March 2023 04:02 · Andy Gregory]

What will happen to taxes in the Budget?

Conservative MPs have been pushing for tax cuts – despite Jeremy Hunt so far appearing to be resistant to those calls, particularly on the issue of the planned corporation tax rise.

The business tax is due to go up from 19 to 25 per cent in April, under plans agreed during Boris Johnson’s premiership and Rishi Sunak’s tenure as chancellor.

All eyes will be on the chancellor to see if he offers any tax relief initiatives for businesses when he stands up in the Commons on Wednesday. He has already made a pre-speech announcement reflecting his desire to shock the economy into growth.

The Treasury chief will announce 12 new investment zones to “supercharge” growth in hi-tech industries.

Officials said the scheme – backed by £80m of investment over five years in each of the new high-growth zones – is designed to accelerate research and development in the UK’s “most budding industries”.

[15 March 2023 04:30 · Alisha Rahaman Sarkar]

Jeremy Hunt bids to head off critics with ‘Budget for growth’

Jeremy Hunt is to unveil a “Budget for growth” designed to provide for the health service, pupils and pensioners as he seeks to silence critics in his own party.

The chancellor will say his measures go beyond helping Britain emerge from its brush with recession.

Instead, he will promise “long-term, sustainable, healthy growth that pays for our NHS and schools, finds good jobs for young people, provides a safety net for older people – all whilst making our country one of the most prosperous in the world”.

Kate Devlin has more.

[15 March 2023 05:04 · Andy Gregory]

Editorial: The chancellor needs to end the abuse of apprenticeship levy funds

In an editorial, The Independent has said that Jeremy Hunt and his colleagues “need to end the abuse of apprenticeship levy funds, as revealed by The Independent’s investigation.

It states: “Though hardly at the top of the chancellor’s list of priorities, the sums involved in these scams are material – at least £1bn. This is taxpayers’ money has been used over the past five years to fund 55,000 already high-earning executives to take courses that are equivalent to a master’s degree but are badged, absurdly, as “apprenticeships”.

“Indeed, some £100m has gone on funding MBAs, many for executives earning more than £100,000 a year – despite a government attempt to stamp this out two years ago. The rise of “apprenticeships” for management candidates appears to have come at the cost of the young, with 100,000 fewer under-25s starting apprenticeships than before the levy was introduced six years ago.

“It is outrageous that scarce resources should have been diverted in this fashion: would that those involved had steered their ingenuity to growing their businesses and taking on real apprentices, rather than exploring loopholes in a scheme that was never meant to subsidise them. The skills and apprenticeships minister, Robert Halfon, has vowed to crack down on the MBA scandal, and it can’t come soon enough.”

[15 March 2023 05:30 · Alisha Rahaman Sarkar]

‘Health and care chancellor’ urged to support social care in Budget

Funding for carers to have respite breaks should be doubled, a coalition representing older people has urged Jeremy Hunt as they dubbed him the “health and care chancellor”.

The Care and Support Alliance (CSA) said it is “imploring” Mr Hunt to use his Budget today to announce more investment in social care, including doubling government funding for carers’ breaks.

Age UK, which is a member of the CSA, said it had polled more than 1,600 carers aged 60 and above and found that 35 per cent have felt overwhelmed because of the care and support they provide, while 61 per cent sometimes or always worry about whether they would be able to keep caring or providing support.

Read more here.

[15 March 2023 06:03 · Andy Gregory]

Hunt expected to announce £8.6m funding boost for Edinburgh’s festivals

Up to £8.6m of funding for Edinburgh’s festivals is expected to be announced in Wednesday’s Budget, reports Lucinda Cameron.

Some of the funding may go towards creating a permanent headquarters for the Fringe festival, which draws thousands of performers to Scotland’s capital each summer.

[15 March 2023 06:30 · Alisha Rahaman Sarkar]

Chancellor to announce £4bn boost for childcare

Chancellor Jeremy Hunt is expected to announce a £4bn expansion of free childcare for one- and two-year-olds in England.

The plan would provide extra 30 hours a week to parents of one- and two-year-olds, The Guardian reported.

It will also increase funding by £288m by 2024-25 for the existing programme of free childcare for three-year-olds.

[15 March 2023 07:01 · Andy Gregory]

What we know and what has been rumoured to be in the Budget

With the Budget now just hours away, this report by Patrick Daly explains what you can expect to hear:

[15 March 2023 07:21 · Maryam Zakir-Hussain]

Energy price guarantee to be extended for another three months

The energy price guarantee will be extended for a further three months from April to June at its current level, capping average annual household bills at £2,500, the treasury has confirmed.

The three-month extension of the energy price guarantee (EPG) at its current £2,500 level will save a typical household around £160, the government said.

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.”

The EPG had been due to rise to £3,000 in April, but falling energy prices mean that the current level can be extended to “bridge the gap” until costs fall below the cap.

Chancellor Jeremy Hunt, who included the measure in his Budget being unveiled today, 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.”

[15 March 2023 07:30 · Alisha Rahaman Sarkar]

When is Jeremy Hunt’s budget speech?

Jeremy Hunt will unveil his first Spring Budget since becoming chancellor today, with aims of boosting growth amid the ongoing cost-of-living crisis.

Mr Hunt is due to deliver his Budget to the House of Commons at 12.30pm, following Prime Minister’s Questions.

The chancellor is expected to reveal 12 zones clustered around universities – radically scaling back a scheme introduced by the former prime minister Liz Truss which saw hundreds of councils bid against each other.

Read more here.

[15 March 2023 07:45 · Maryam Zakir-Hussain]

Who is taking part in the Budget Day walkouts?

Hundreds of thousands of workers from several trade unions will strike on Wednesday in what threatens to be the biggest single day of industrial action since the current wave of unrest started last year.

These are the sectors affected by the Budget Day walkouts.