Jeremy Hunt has unveiled his spring budget with plans to boost pensions, extend free childcare and cut duty on fuel and draft beer.
The chancellor also revealed he would add £11 billion to Britain’s defense budget over the next five years and extend energy bill support for another three months.
Here are the key points:
No recession this year
The Chancellor said the Office for Budget Responsibility (OBR) now predicts the UK will not enter a technical recession this year and that the government will “meet the Prime Minister’s priorities of halving inflation, reducing debt and growing the economy”. .
Despite “continued global volatility”, Mr Hunt said, the OBR expects UK inflation to fall from 10.7% in the final quarter of last year to 2.9% by the end of 2023.
Energy assistance is being expanded
The chancellor confirmed that the energy price guarantee would be extended for another three months and that households with pre-paid meters would get help as their charges would be brought in line with direct debit charges.
It announced a £63m fund to “keep our public leisure centers and pools alive” in response to the high costs, and £100m will be given to support thousands of charities and community organisations.
Alcohol and tobacco
The chancellor also announced increased relief for pubs – a ‘Brexit pub guarantee’ which will see duty on casks in pubs up to 11p lower than duty in supermarkets from August.
He confirmed that fuel duty will remain frozen and the 5p cut will be maintained for another year.
The chancellor said the government would “increase tobacco tax” and “freeze gross gaming tax yield levels”.
Defense budget and upgrade
Mr Hunt confirmed the Government would add £11bn to the defense budget over the next five years and another £30m would go to veterans.
There will be 12 new investment zones and they will potentially be in the West Midlands, Greater Manchester, North East, South Yorkshire, West Yorkshire, East Midlands, Teesside and Liverpool. There will also be at least one in each of Scotland, Wales and Northern Ireland.
Mr Hunt also announced a number of funding pots for leveling and local transport.
The chancellor confirmed the planned rise in corporation tax to 25 per cent would go ahead, but announced a new “full capital expenditure” policy over the next three years, which will mean every pound invested in IT equipment, plant or machinery can be deducted immediately from the profits.
Mr Hunt said he would introduce a new tax credit for small and medium-sized businesses that spend 40 per cent of their spending on research and development. Tax breaks for film, television and video games will also be extended, he said.
Up to £20bn will go towards the early development of carbon capture and storage.
Mr Hunt said that, subject to consultation, nuclear power would meet the same investment incentives as renewables, while “more public investment will come”.
The chancellor announced a £1m annual prize for artificial intelligence research over the next 10 years, called the Manchester Prize.
There will be the “biggest change to our welfare system in a decade”, Mr Hunt said, with reforms aimed at supporting more disabled people into work. The government will fund a new scheme called ‘universal support’ in England and Wales which could help up to 50,000 people a year.
He said he would put £400m into mental health and musculoskeletal support and there would also be a £3m pilot to help disabled people transition into the workplace.
The chancellor also unveiled reforms to sanctions aimed at getting people on universal credit into work, but for those working low hours the government will increase the pay cap from the equivalent of 15 hours to 18 hours.
Mr Hunt also said he would put an extra £10m into the third sector for suicide prevention.
Mr Hunt announced he would scrap the lifetime allowance cap on pensions and increase the annual tax-free pension from £40,000 to £60,000.
The chancellor has announced a boost for childcare providers, with the government piloting incentives of £600 for carers joining the profession – £1,200 if they join through a service.
Mr Hunt also said he would increase the funding paid to nurseries that provide free childcare under the hourly offer by £204m from September, rising to £288m next year.
The minimum staff-to-child ratio will change from 1:4 to 1:5 for two-year-olds in England, although this will remain optional, he said.
Mr Hunt also said he wants all schools to be able to offer grooming at every side of the school day by September 2026.
It announced 30 hours of free childcare for all under-fives from the time maternity care ends, where eligible.