Budget 2023: What To Expect From Jeremy Hunt's 'Back To Work' Budget
Jeremy Hunt will unveil his Budget on Wednesday in which he is expected to focus on efforts to encourage the over-50s, the long-term sick and disabled, and benefits claimants back into the workplace.
The chancellor’s speech will be delivered against a backdrop of voter worries about inflation, pay and the public finances.
Here is what Hunt is expected to announce when he stands up in the Commons.
Hunt is expected to cancel the planned £500 hike in average energy bills which was due to come into force next month. It would see bills for the average household staying at around £2,500 instead of going up to £3,000, reportedly for another three months from April 1.
Millions of low income customers on pre-payment meters are also expected to have their energy bills cut by £45 a year. Hunt is expected to bring the charges in line with customers who pay by direct debit. The government will pick up the tab at a cost of £200m.
The chancellor has already said moves to cut the cost of childcare will form part of his Budget. He is expected to announce that childcare help for parents on universal credit will be given up front instead in arrears.
The maximum universal credit childcare allowance – which has been frozen at £646-a-month per child for years – will be increased by several hundred pounds. However, the measures will not help parents not on universal credit.
Hunt could raise the £40,000 cap on tax-free annual pensions contributions in his Budget, in an effort to stop people retiring early. There have been reports that the state pension age could rise to 68 by the end of the 2030s - sooner than had been expected.
Sunak and Hunt have been under pressure from Conservative MPs -including Boris Johnson - to use the Budget to cut taxes.
Among the demands is that the planned rise in corporation tax - the rate companies pay on their profits - from 19% to 25% be paused.
But despite having said he wanted to cut the rate to 15% when was running to be Tory leader last summer, Treasury sources have insisted that the increase will go ahead.
One insider told HuffPost UK: “The best tax cut right now is a cut in inflation, because that is a more insidious tax which eats into people’s savings as well as pushing up the cost of mortgages and business loans.”
During his trip to the United States, the prime minister promised there would be an extra £5bn for the military over two years. The Ministry of Defence will get £1.98bn this year and £2.97bn next year. The extra funding is expected to take spending from 2% of GDP in 2020 to 2.25% in 2025.
But Sunak has rejected demands that spending rise to 3% of GDP. And the £5bn is only around half of what defence secretary Ben Wallace had asked for.
Tory backbenchers have urged the chancellor to act to support motorists facing a 12p-per-litre hike in fuel duty. A 23% increase in the duty is pencilled in for this month, but Hunt will be tempted to freeze the duty at its current rate in an attempt to help drivers cope with the cost of living crisis.
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