Hunt set to announce £4bn childcare lifeline for parents in Budget

Jeremy Hunt delivers speech on plans for the UK economy

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Jeremy Hunt has had one of his big Budget surprises spoiled this evening as it has been revealed he is set to announce a huge £4billion boost for childcare in England. The plan will provide an extra 30 hours a week to parents of one and two-year-olds, and an increase in funding for the existing provision for three-year-olds.

The Guardian spoiled the Chancellor’s big surprise, saying the announcement will form part of a wider drive to get people back into work and grow the economy. 

Parents of one and two-year-olds will receive an extra 30 hours of funding a week, with local authorities set to start the roll out from September 2024. 

Last month The Guardian revealed the Department for Education had submitted a plan for a free 30-hours-a-week entitlement for working parents of children aged nine months to three years. 

In February, the Confederation of British Industry said the government should as much as £9billion extra into childcare, arguing that a more accessible and affordable system was an economic priority”.

A Treasury source did not deny the report when asked by The Daily Express.

Just one week ago, Education Minister Claire Coutinho told the Commons that the Government, “is not currently planning to extend the 30 hours of free childcare a week”.

She said: “All parents are eligible for the universal 15 hours of free early education, which is available to all three and four-year-olds, regardless of family circumstance.”

Asked by The Daily Express how Mrs Coutinho’s statement that the Government was not planning upon extending childcare entitlement one week ago with this evening’s news, a Government source emphasised the phrase “currently planning”.

The big promise on childcare will form part of a package on getting brits back to work.

Chancellor Hunt is expected to warn MPs tomorrow that labour shortages are fuelling inflation, by reducing the workforce and pushing up wages. 

Tempting early retirees back into work will form a major plank of tomorrow’s announcements. 

It’s expected he will lift pension allowances for higher earners in an effort to discourage early retirement. 

Mr Hunt is also set to increase the £40,000 cap on tax-free annual pension contributions to £60,000, after a nine-year freeze. 

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As well as childcare and early retirement, long-term sickness is also a major contributor to Britain’s shrinking workforce. 

The number of people forced out of work by long-term sickness recently hit a new record of over 2.5 million, being linked to the record waiting lists facing the NHS. 

This afternoon Labour’s welfare spokesperson Jonathan Ashworth said the Tories have been writing off people who are out of work. 

He said Labour has been “pressing the government to take action on the barriers which make it impossible for parents on Universal Credit to return to work”.

“It’s time the government acts on the cost of childcare.”

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