From pensions to pools: what to expect from Hunt’s spring budget
J eremy Hunt is due to set out the government’s plans for tax and spending in his first budget on Wednesday. Meanwhile, the Office for Budget Responsibility (OBR) will publish updated economic forecasts and an assessment of the government’s finances for the next five years – running up to and beyond the next election. Here is what to expect.
The OBR, which is independent of government, is expected to cut its inflation forecast for this year from 7% to nearer 4% and to provide a sunnier picture of economic growth, revising the projected fall from 1.4% to nearer 0.5%.
It is also expected to say that the spending deficit improved after a rise in tax receipts, mainly due to higher than expected inflation over the last year. Hunt could have as much as £30bn spare and still bring down borrowing over the life of the forecast, though he is likely to bank most of it, keeping aside a war chest to spend before next year’s general election.
The biggest change to the welfare system in a decade will mean claimants can continue to receive the payments after they return to employment, according to the Treasury. Hunt will detail an overhaul of the universal credit system aimed at encouraging claimants to move into work or increase their hours, while also offering more extensive training to people over 50 who wish to return to the workplace.
Answering the call to support parents struggling with sky-high childcare costs, Hunt will offer 30 hours of free childcare for one- and two-year-olds and a boost to funding for existing provision for three-year- olds at a cost of £4bn. This could be paid for in part by scrapping tax-free childcare for school-age children.
However, any move to scrap up to £2,000 a year in tax-free childcare support for
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