Hunt says free childcare offer from age of nine months will cut childcare costs for families by nearly 60%
Hunt ends with a final childcare announcement.
He says the government will offer 30 hours of free childcare for every child from the age of nine months, where all adults in the household work.
He says this will reduce childcare costs for families by nearly 60%.
UPDATE: Hunt said:
So today I announce that in eligible households where all adults are working at least 16 hours, we will introduce 30 hours of free childcare not just for 3-and-4 year-olds, but for every single child over the age of 9 months.
The 30 hours offer will now start from the moment maternity or paternity leave ends.
It’s a package worth on average £6,500 every year for a family with a two-year-old child using 35 hours of childcare every week…
… and reduces their childcare costs by nearly 60%.
Because it is such a large reform, we will introduce it in stages to ensure there is enough supply in the market.
Working parents of two-year-olds will be able to access 15 hours of free care from April 2024, helping around half a million parents.
From September 2024, that 15 hours will be extended to all children from 9 months up, meaning a total of nearly one million parents will be eligible.
And from September 2025 every single working parent of under 5s will have access to 30 hours free childcare per week.
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In its new forecasts, net migration flows settle at 245,000 a year, rather than the 205,000 assumed in its November forecast. A year ago, net migration flows were seen settling at 129,000.
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A larger population, due to increased net migration, will add 0.5% to the UK’s potential output in 2027, the fiscal watchdog says.
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The OBR’s report explains that higher recent rates of inward migration can be attributed to:
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n
• the resumption of international travel following the pandemic, especially among foreign students, with student visas reaching a record high of 490,000 in 2022;
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• the post-Brexit immigration regime that began in 2021 and issued 800,000 visas in its first year of operation (only 50,000 of which were for EU citizens who did not require a visa under the previous regime); and
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• other changes, including 129,000 British National Overseas visas to Hong Kong nationals and 210,000 visas to Ukrainian nationals.
n
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A stat buried in the budget documents that is raising eyebrows in Westminster – the OBR forecasts net migration to settle at 245,000 a year, up from the 205,000 a year assumed in November. The Conservatives used to pledge to cut it to tens of thousands… https://t.co/xEkNG3EfO6
— Joe Mayes (@Joe_Mayes) March 15, 2023
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Ever since 2016 the Office for Budget Responsibility has been saying that Brexit would be bad for the economy. It has been assuming a 15% drop in imports and exports, compared to what would have happened if the UK had not left the EU, leading to a 4% fall in productivity over a 15-year period.
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In today’s report the OBR says that these forecasts are still holding up and that there is nothing in the latest data to suggest it is wrong. It says:
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n
Overall, while net migration has been higher than we anticipated, investment growth has been significantly weaker than we expected before the referendum, and our assumption about the impact of Brexit on the UK’s trade intensity is broadly on track. As a result, we have not revised our view that productivity will be 4% lower in the long run than if the UK had remained in the EU.
n
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One of George Osborne’s boasts as chancellor was that he was able to take low earners out of having to pay any income tax, by lifting the basic allowance. (It was a coalition policy, pushed originally by the Liberal Democrats, but then enthusiastically adopted by the Tories in their 2015 manifesto.) But in March 2021 Rishi Sunak, the then chancellor, announced that the allowance and higher rate threshold would be frozen for four years, and last autumn Jeremy Hunt said the freeze would be extended another two years, to 2027-28. This means, as people get annual pay rises, more and more of them clear the hurdle and get sucked into paying basic or higher rate tax. Economists call it fiscal drag.
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The Office for Budget Responsibility says that by 2027-28 the six-year allowance/threshold freeze will have brought 3.2 million people into paying basic rate tax, 2.1 million people into paying higher rate tax and 400,000 people into paying the additional rate.
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