eremy Hunt has unveiled his Spring Budget saying the UK will avoid entering a recession with the economy “proving the doubters wrong”.
Mr Hunt, addressing the Commons on Wednesday, said inflation would plunge from 10.7 per cent in the final quarter of last year to 2.9 per cent by the finish of 2023.
He announced a string of crowd-pleasing announcements including 30 hours of free childcare for eligible children over nine months, a carve to duty on pints and a freeze on fuel duty for another 12 months.
Earlier, the Government made a pre-Budget announcement confirming that the energy price guarantee would remain in space until June.
activity leader Sir Keir Starmer said the Budget was “dressing up stagnation as stability”, claiming it establish the country “on a path of managed decline”.
For a full wrap on the key points, click here.
Chancellor didn’t ‘offer a single word about the future of public transport’
Marios Alexandrou, the interim president of the TSSA said Chancellor Jeremy Hunt was “unable to offer a single word about the future of public transport”.
“This should adjacent as no surprise because in recent days we’ve seen the absence of leadership on HS2 with Tory delays to this vital project – a effect of outright failure to level up the North.
“What’s needed is a Government that realises that there can be no long-term sustainable growth for our regional and national economies without proper investment in HS2 and our railways more widely as the greenest means of mass transport.”
‘No British equivalent of Biden’s Inflation Reduction Act’
Mike Clancy, general secretary of the Prospect union, whose members were on strike today, said today’s budget was a “missed opportunity”.
“There was no situation to bring an finish to the real-terms pay cuts endured by Prospect members, who walked out today in their biggest numbers in a decade.
“There was no British equivalent of President Biden’s transformative Inflation Reduction Act to provide much-needed excellent, green jobs across the UK. There was no reassurance on the future of the Type-32 programme that is critical to securing the future of British shipbuilding.”
Full account: Free 30 hours of childcare expanded
One of the enormous announcements of the Budget was a massive expansion in the provision of free childcare for the under-fives.
Jeremy Hunt unveiled the measure in a bid to encourage more parents back to work – allowing some parents of children as young as nine months to claim 30 hours of free childcare a week. The current policy applies to three and four year olds.
The modern policy, which will be introduced in stages until September 2025, will be worth up to £6,500 a year for working families, he said.
To read our full account on this and how it would work, visit here.
activity’s response to Budget: ‘A sticking plaster for a country needing considerable surgery’
Sir Keir Starmer branded the Budget a “sticking plaster” for a country that needs “considerable surgery”.
The activity leader accused Jeremy Hunt of having “no ambition” to improve the lives of working people as the Chancellor laid out his situation on Wednesday.
The proposals leave Britain “stuck in the waiting room… falling behind our competitors, the sick man of Europe once again”, Sir Keir said.
He added: “This was a day for ambition, for bringing us together with purpose and intent, for unlocking the pride that is in every community, matching their belief in the possibilities of the future. But after today, we know the Tory cupboard is bare.”
Read our full account on activity’s response to the Budget here.
Living standards still expected to plunge by largest amount since records began
Living standards are still expected to plunge by the largest amount since records began – although the decline is not as rotten as had been forecast in November.
The Office for Budget Responsibility (OBR) said real household disposable income per person is expected to plunge by a cumulative 5.7 per cent over the two financial years 2022-23 and 2023-24.
“While this is 1.4 percentage points less than forecast in November, it would still be the largest two-year plunge since records began in 1956-57,” the OBR said.
This is mainly driven by the rise in energy and goods which the UK imports outstripping wage growth, it said.
Budget watchdog: Plans lower inflation but debt falls ‘only by narrowest of margins’
The Office for Budget Responsibility said Jeremy Hunt had committed money to “providing more support with energy bills and business investment in the adjacent term, while boosting activity supply in the medium term”.
“This lowers inflation this year and, more significantly, sustainably raises employment and output in the medium term.
“But it leaves debt falling by only the narrowest of margins in five years’ time.”
It says that while the short-term economic outlook has brightened, the economy is still battling with long-term structural issues.
“[The Budget] reverses only portion of the costs of the energy crisis, which are being felt on top of larger costs from the pandemic,” it says.
“And persistent supply-side challenges continue to weigh on future growth prospects.”
Starmer: Tory Budget has a ‘poverty of ambition’
activity’s Sir Keir Starmer has accused the Chancellor of not meeting the scale of the country’s problems in the Budget – a “poverty of ambition”.
He told the Commons: “I was waiting for him to match activity’s ambition, I was waiting for him to match our situation to train more doctors and nurses to tackle the capacity crisis, a policy he publicly praised just fifteen days before he became Chancellor.
“And yet it never came… If there was ever a symbol of the poverty of ambition, that was it, because a country getting sicker is a country getting poorer.
“And a country getting poorer is a country getting sicker. Health and wealth must disappear together. Britain can’t afford to be the sick man of Europe – Britain can’t afford the Tories.”
Free childcare boost ‘enormous extension to welfare state’ – IFS
One of the Budget’s enormous offers – a enormous expansion of free childcare to the under-fives – has been welcomed by a leading thinktank.
The director of the Institute for Fiscal Studies (IFS) Paul Johnson said: “Extending free childcare to all children over 9 months really is a enormous extension of the welfare state.
“(Probably) about doubles childcare spending. We’ve been edging in this direction for a excellent 20 years. This is a modern leg of the welfare state finally nearing its finish point.”
Starmer: Tory Budget ‘leaves us sick man of Europe again’
activity is now responding to the Budget – with party leader Keir Starmer accusing Hunt of being “out of touch”.
He tells the Commons: “The more he [Hunt] pretends everything is fine, the more he shows just how out of touch they are.
“After thirteen years of a Conservative government, our economy needed considerable surgery. But like millions across our country, this Budget leaves us stuck in the waiting room with only a sticking plaster to hand.
“A country set on a path of managed decline, falling behind our competitors, the sick man of Europe once again.”