A back-to-work Budget – as Chancellor dashes tax cut hopes
YOUNG parents, early retirees and the long-term sick will be among the winners of this week’s ‘ back-to-work’ Budget, the Chancellor said yesterday.
Jeremy Hunt declared he ‘believes in the virtue of work’ and will ‘break down the barriers’ preventing people from getting jobs. Although he backed Remain at the referendum, he said that Brexit was ‘the right choice’ to stop all vacancies being filled by workers from overseas.
But he dashed the hopes of Tory MPs and businesses who thought he might cancel next month’s corporation tax rise, saying he had to be ‘responsible’ with the public finances. Expectations are low for big tax cuts or spending boosts in Wednesday’s Spring Budget, given the fragile state of the economy.
Instead the Chancellor has indicated he will introduce a range of measures to get more Britons back into work, as figures suggest there are as many as 1million job vacancies – while more than 500,000 working-age adults have left the labour market since Covid struck. One package will focus on parents of pre- school children, who in many cases cannot afford to go back to work because of the high cost of childcare.
The amount that parents on Universal Credit can claim for childcare, frozen since 2006, will be increased and paid upfront rather than in arrears. To increase places and keep costs down, the ratio of nursery staff to children will be relaxed – while providers may see greater state subsidies for free childcare hours.
And to encourage the over-50s to get back to their desks or delay their retirement plans, the annual limit on pension contributions will be
increased to £60,000, while the tax threshold on pension pots will also rise.
There will be ‘bootcamps’ to teach older workers new skills, particularly in sectors such as construction and technology where there are shortages. And the system used to assess eligibility for sickness benefits will be scrapped, allowing claimants to continue receiving payments after they take up jobs.
mr Hunt told Sky News yesterday: ‘We need to break down the barriers that stop people here in the Uk from working, whether that’s parents who have obstacles because of childcare costs, whether it’s older people who feel they need to retire earlier than they might perhaps want to, whether it’s the long-term sick, who find they have barriers to working.
‘This is a Budget in which I will be systematically going through all the areas where there are barriers that stop people working who want to.’ He also said that ‘the Brexit decision was a choice, the right choice in my judgment, so we shouldn’t fill those vacancies [with] unlimited migration’.
mr Hunt said the Government ‘ fully respects the choice of people who don’t wish to work’ but that many people, such as parents on benefits, do.
reminded that he had once vowed to cut corporation tax to 15 per cent but that it is now going to increase from 19 to 25 per cent, he said: ‘It’s the same Jeremy Hunt that is with you now, and I still want us to have the most competitive business taxes anywhere in the world. I am a Conservative who believes in a low-tax economy.
‘I also have to be responsible with public finances. We’re not going to do what the last Labour government did and run out of money. Businesses need the stability that comes from being responsible.’
Told that he had abandoned his previous radical plans and only now wanted to run the economy like ‘Jeremy from accounts’, he replied: ‘Jeremy the Chancellor will be responsible for the public finances. I make absolutely no apology for that.
‘I think families who want to know that their money is safe need to know that they have a responsible Chancellor and a responsible Conservative Government.’