Budget 2023: Jeremy Hunt announces changes to childcare, pensions and disability benefits – as it happened

• Jeremy Hunt has said he is “proving the doubters wrong” as he used a stronger than expected economic performance to help fund new tax breaks for business investment and a drive to get people back into the workforce. Here is our at a glance summary of what was in the budget.

Here is an analysis by the Guardian’s economics editor, Larry Elliott.

Here is an extract.

To be sure, the chancellor will be relieved that the independent Office for Budget Responsibility now thinks the economy will just about avoid the two consecutive quarters of falling output that would denote a technical recession, and that growth will be stronger in the likely pre-election year of 2024 than predicted last November at the time of his autumn statement.

But doing less badly is not the same as doing well. Hunt said he was delivering a ‘budget for growth’ – a refrain that has been heard many times by Conservative chancellors over the past 13 years. The reality is that the UK is battling against three powerful headwinds: rising interest rates, rising taxes and a cost of living crisis. It could certainly do without the added pressure of a credit crunch caused by bank failures. Despite the chancellor’s bullish performance, living standards are on course for their biggest two-year fall since the mid 1950s while taxes as a share of national income will be at their highest since the second world war by 2027-28.

And here are verdicts on the budget from a Guardian panel: Polly Toynbee, Miatta Fahnbulleh, Katy Balls, Frances Ryan, Louisa Britain, Rebecca Long-Bailey and Lucy Pasha-Robinson.

The Institute for Fiscal Studies says the childcare proposals announced today will create “one of the most severe distortions you are ever likely to see within a tax and benefit system”.

That is because the abrupt cut-off means that the generous provision being made available abruptly stops if someone starts earning more than £100,000. In a briefing, the IFS explains:

A parent with a one-year-old and a three-year-old whose childcare provider charges England’s average hourly rate for 40 hours per week would, after these reforms, find that their disposable income (ie earnings net of tax and childcare outgoings) falls by £14,500 if their pre-tax pay crosses £100,000. Disposable income would not recover its previous level until pre-tax pay reached £134,500, meaning a parent earning £130,000 would be worse off than one earning £99,000.

For those with higher childcare costs the distortions are even more absurd. A similar parent paying average London rates for childcare, using 50 hours per week, would see a £20,000 fall in disposable income when their pre-tax earnings cross £100,000. Disposable income would not recover its previous level until pre-tax pay reached £144,500.

The Welsh finance minister Rebecca Evans said the chancellor made a series of deliberate choices to prioritise “petrol and potholes” over investment in public services, pay and economic growth – and suggested he was saving more dramatic announcements for nearer the next general election. She said:

Today we saw a less than bare minimum budget, which misses the big picture, at a time when people’s financial situations are worsening.

It fell short of providing meaningful support – there were sticking plasters when we needed significant action. Potholes and petrol took precedence over pay rises for teachers and NHS staff.

The UK government has spent months telling the public sector it can’t pay them a pay rise but it’s spent £6bn on fuel duty, for example.

There was nothing in this to recognise the pressure on the NHS and nothing for social care which is one of the biggest pressures we’re facing.

It does seem the chancellor has more headroom than he’s using. I would suggest he’s looking to make more dramatic announcements, bigger hand-outs closer to the election rather than grappling with the problems right now.

Responding to the chancellor’s announcement of 30 hours of free childcare for children of working parents aged nine months and over from 2025 in England, Evans said:

We are already one step ahead in our support for childcare.

What we do know is it’s taken us quite a long time to get to the point where the capacity in the sector is able to expand. We’ve invested in the skills in the sector, increased the hourly rate and been enabling investment in the physical assets the sector needs. The UK government is going to find it needs to invest in that sense to deliver on its pledge. It takes time to expand on the sector.

Migration into the UK will settle at a higher level than previously expected, the Office for Budget Responsibility says.

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 settling at 129,000.

A larger population, due to increased net migration, will add 0.5% to the UK’s potential output in 2027, the fiscal watchdog says.

The OBR’s report explains that higher recent rates of inward migration can be attributed to:

• The resumption of international travel following the pandemic, especially among foreign students, with student visas reaching a record high of 490,000 in 2022;

• 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

• Other changes, including 129,000 British national (overseas) visas to Hong Kong nationals and 210,000 visas to Ukrainian nationals.

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.

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:

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.

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.

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.

The IFS also says fiscal drag will mean basic rate taxpayers paying an extra £500 in 2023-24, and higher rate taxpayers paying an extra £1,000. (See 4pm.)

Paul Johnson, director of the Institute of Fiscal Studies, has just released his verdict on the budget.

Johnson says it is “just as notable” what Jeremy Hunt didn’t announce – such as no higher pay for public sector workers, while freezing fuel duty again.

There was no funding to be found to improve the pay offer to striking public sector workers, where £6bn might have been enough to make an inflation-matching pay offer possible this coming year. That’s a political choice.

Money for motorists, but not for nurses, doctors and teachers.

Big personal tax rises planned for next month, via the freezing of income tax thresholds, will still go ahead, Johnson points out. That fiscal drag is hitting living standards:

That will mean an extra £500 in tax for basic rate taxpayers in 2023–24, and an extra £1,000 for higher rate taxpayers.

These tax rises may be necessary from a fiscal point of view, but they are an important part of the reason why household incomes are still expected to fall more over the current two-year period than at any point in living memory.

Johnson also points out that Hunt has been hemmed in by “his own poorly designed fiscal rule”, to have debt falling at the end of the forecast period.

And on childcare, the IFS says Hunt’s new funding should help “tens, but not hundreds, of thousands of parents into work” – provided that it is appropriately funded.

Johnson says:

The big expansion in the childcare offer to families with younger children, likely doubling spending on childcare, looks like it will take us close to completing a 25-year long journey during which a new arm of the welfare state has been created.

The Scottish government will get another £320m over the next two years following the chancellor’s spending increases in England, including his pothole fund, with arts and communities project getting £9.6m dedicated funding.

In keeping with Conservatives’ post-Brexit strategy of spending UK government money in areas controlled by the Scottish parliament, Hunt announced that Edinburgh’s cash-strapped festivals would get £8.6m, while another £1m would be shared by five community projects such as Aberfeldy sports club and a community grocery shop and cafe in Kyle of Lochalsh in the Highlands.

Jeremy Hunt’s spring budget was less generous for the UK’s devolved governments than previous Westminster budgets, with no increases for the biggest spending Westminster departments such as health and education that drive Treasury bonuses for Scotland, Wales and Northern Ireland.

He said Scotland would also be offered at least one of the 12 investment zones he plans, a proposal likely to challenge the Scottish National party-led government in Edinburgh to set aside its ideological discomfort about low-tax enclaves.

John Swinney, Scotland’s acting finance secretary, said overall the budget was a “missed opportunity” to combat rising poverty, the cost of living crisis and invest in public services. He said:

The limited additional money for the Scottish government’s budget is welcome but will not go far enough and in the long-term our capital funding will fall in real-terms.

The Scottish government is doing what it can with its limited powers to ensure people receive the help they need, but the UK government could have done far more to ease the burden affecting so many, demonstrating yet again why Scotland needs the powers of independence.

A thinktank has described the changes to the pension tax allowance rules as a “massive inheritance tax loophole”. This is from James Browne, head of work, income and inequality analysis at the Tony Blair Institute.

And this is from Jeevun Sandher, head of economics at the New Economics Foundation, another thinktank.

Increasing the pension lifetime allowance is a massive giveaway to already very wealthy people. If the chancellor hopes this will help older people remain in work, it’s completely divorced from reality. Only around 1% of workers saved more than the old annual allowance and just 10% were hit by the lifetime limit of £1.1 million.

Increasing the annual and lifetime allowances won’t do much to help the vast majority of us save for retirement.

One group that are supposed to benefit from these tax changes are the GPs and NHS consultants who were forced to retire early due to pension limits. But this group is far more affected by the annual than the lifetime allowance, which is still far below its 2010 level.

Nick Macpherson, a former permanent secretary at the Treasury, has also criticised the proposal.

But the move has been welcomed by the wealth management industry. This is from Lee Clark, a financial planner at RBC Brewin Dolphin, an investment management company.

Effective retirement planning is a long-term game that requires long-term consistent pension policy from concurrent governments to reward hard working savers. Pension savers need certainty, not this see-sawing of policy. For example, would a future government reverse this move?

That said, the abolishing of the LTA [lifetime tax allowance] is fantastic news for many professionals that have had a disincentive to work and save because of the frozen lifetime pension’s allowance of £1.07m that had halved in real terms since 2012.

Labour says changing the pension tax relief rules, which it describes as “the only permanent tax cut in the budget”, will cost the taxpayer £70,000 for every person who returns to the labour market (the rationale for the move).

This figure is based on the policy costing more than £1bn towards the end of the decade (see 2.59pm), and the OBR saying in its report that it expects the policy to result in an extra 15,000 people staying in work. The OBR says:

Changes to the lifetime allowance and annual allowance on pension contributions increase employment by around 15,000 by removing some financial disincentives to continuing in employment for those with large pension pots.

Here are the figures from the Treasury’s red book showing how much the two changes to pension tax allowances will cost the government. The lifetime allowance on how much people can save in their pension funds tax free will be abolished, and the annual allowance (the amount that can be put in the fund tax free) will go up from £40,000 to £60,000.

There is no cost in 2022-23 (the column on the left). But by 2026-27 and 2027-28 (the two final columns on the right) it is costing more than £1bn a year.

According to the Office for Budget Responsibility, household disposable income is set to fall by almost 6% in the two years between 2022 and 2024. The OBR says this is an improvement on what it was expecting last autumn, it is still the steepest fall since records began more than 60 years ago. The OBR says:

Real household disposable income (RHDI) per person – a measure of real living standards – is expected to fall by a cumulative 5.7% 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 fall since records began in 1956-57. The fall in RHDI per person mainly reflects the rise in the price of energy and other tradeable goods of which the UK is a net importer, resulting in inflation being above nominal wage growth. This means that real living standards are still 0.4% lower than their pre-pandemic levels in 2027-28.

The UK is on track to hit the government’s target to have debt falling as a share of the economy by “the narrowest of margins in five years’ time”, the Office for Budget Responsibility said.

The OBR’s economic and fiscal outlook shows that the chancellor only has £6.5bn of headroom to achieve the target to have debt falling, as a share of GDP, in the 2027-28 financial year.

That is the smallest amount of headroom any chancellor has set aside against his primary fiscal target since the OBR was established in 2010 by George Osborne.

And that calculation assumes that the government raises fuel duty rates in future years (having frozen fuel duty at its current rate for another year today).

The OBR says:

Underlying debt – which excludes the Bank of England and is the measure targeted by the chancellor – does not peak until 2026-27 (a year later than we forecast in November) at 94.8 per cent of GDP and then falls only marginally (by 0.2 per cent of GDP) in the final year of the forecast.

That suggests Hunt may not have much more firepower for pre-election giveaways at future budgets, as he has spent around two-thirds of the improvement in today’s forecasts.

Starmer says the government was right to look at a solution to the pensions problem that means some well-paid doctors are retiring early.

But he says the pensions tax allowance announcement is “a huge giveaway” to some of the wealthiest people in the country. He goes on:

The only permanent tax cut in the budget is for the richest 1% How could that possibly be a priority?

As soon as the chancellor sat down, the Office for Budget Responsibility released its new assessment of the UK economy.

The fiscal watchdog confirms that the economic and fiscal outlook has “brightened somewhat” since its previous forecast in November.

The near-term economic downturn is set to be shorter and shallower; medium-term output to be higher; and the budget deficit and public debt to be lower.

But this reverses only part of the costs of the energy crisis, which are being felt on top of larger costs from the pandemic. And persistent supply-side challenges continue to weigh on future growth prospects.

The OBR says that Hunt has spent two-thirds of the improvement in the fiscal outlook on today’s budget measures, such as maintaining the energy price guarantee at £2,500 a year and on supporting business investment in the near term, “while boosting labour supply in the medium term”.

The OBR adds:

This lowers inflation this year and, more significantly, sustainably raises employment and output in the medium term.

Keir Starmer is responding to Hunt now. One of the budget traditions is that the leader of the opposition replies, not the shadow chancellor.

Starmer says this is supposed to be a budget for growth – but the figures show the economy is set to contract.

The UK “is on a path of managed decline”, and falling behind its competitors, he says.

He says the Tory cupboard is as bad as the salad aisle. The lettuce might be out, but the turnips are in.

He says the Tories are “a divided party caught between a rock of decline and a hard place of their own economic recklessness, dressing up stagnation as stability as their expiry date looms ever closer”.

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.

Hunt says he wants all schools to be able to offer wrap-around care from 8am to 6pm, either on their own or in partnership with other schools. He says the ambition is to have this in place by September 2026.

Hunt says he is going to increase the annual pensions tax free allowance from £40,000 to £60,000.

And he says instead of just lifting the lifetime allowance (currently just over £1m), he will abolish it.

That’s an unexpected rabbit out of the budget hat – there were rumours that the pensions lifetime allowance would be raised to £1.8m.

But it’s a rabbit that will benefit high earners – such as doctors, who have long said they have been hit by a pensions trap, partly due to the freezing of the lifetime allowance.

Hunt is turning to employment.

Brexit was a vote to change the economic model, he says.

The number of disabled people in work has risen by 2 million, he says.

Today the government is publishing a white paper on disability benefits reform. The work capability assessment will be abolished. Disabled people will be able to seek work without fear of losing support, he says.

A new programme called universal support will be set up, to help disabled people get into work. Up to £4,000 will be spent per person, and the scheme could help up to 50,000 people a year, he says.

He claims this is the biggest change to the welfare system for a decade.

Full capital expensing, which Jeremy Hunt just announced, lets businesses deduct the cost of any eligible investment they do from their corporation tax bills straight away, rather than over several years.

Full expensing should make it more attractive for a company to invest in a new building or in new machinery. Without it, the firm can only deduct a small fraction of the cost of investment each year over the accounting lifespan of that investment.

That means that, in practice, they don’t actually get the full cost of the investment, as inflation will erode the value of the money firms can claim back in future years. So the longer the write-off time, the less of the cost of the investment you can write off.

As Hunt explained, it is “a corporation tax cut worth an average of £9bn a year for every year it is in place.” It will offset the increase in the corporation tax cut from 19% to 25%, and replaces the “super-deduction”.

Back in 2017, writer Sam Bowman described full expensing as “the best idea in politics that nobody’s ever heard of” (you can read more here).

As Bowman put it:

Full expensing sounds technical and obscure, and is unlikely to win votes on the doorstep. It is not the sort of policy to win headlines. But its effects seem like they could be very large, and could deliver the sort of jobs and wages boost that would be popular.

For a government that seems desperate to boost investment, especially investment in machinery-intensive sectors like manufacturing, it could be one of the few policy silver bullets it has left.

Tim Pitt of Flint Global, a former advisor to Philip Hammond and Sajid Javid, says it is “very good news” for the UK’s tax competitiveness.

But, there will be a ‘cliff edge’, as Hunt has only announced “full expensing” for the next three years, with an intention to make it permanent.

The IFS’s Paul Johnson says that it is ‘ridiculous’ to only make the move temporary:

Hunt says he wants to make the UK a better place for AI investment.

An “AI sandbox” will trial new means of promoting investment, he says.

And he says he has accepted all the recommendations from the review by Sir Patrick Vallance.

For the next 10 years, there will be an annual prize of £1m for AI research, he says.

Hunt says the UK needs more nuclear power.

To encourage investment, nuclear power will be classed as “environmentally sustainable”, subject to consultation, he says. That will give it access to the same investment incentives as renewable energy.

He says the government will launch Great British Nuclear, to bring down costs.

(The title of this is very similar to Great British Energy, the new nationalised start-up proposed by Labour.)

Hunt says there will be a competition for small nuclear reactors.

Hunt says he wants the UK to have the most pro-business, pro-enterprise tax regime anywhere.

Even with the corporation tax rise, the UK will have the lowest headline rate in the G7.

And only 10% of firms will pay the full 25%, he says.

He says he is introducing a new investment allowance. Every pound invested in IT equipment, plant or machinery can be deducted immediately from profits. It will be worth £9bn a year. The OBR says it will increase business investment by 3% every year. He says the UK will be the only European country with full expensing like this.

Hunt cites Canary Wharf as an example of a successful regeneration project.

He says he is announced 12 investment zones, which can be new Canary Wharfs. He says they will be in: the West Midlands, Greater Manchester, the north-east, South Yorkshire, West Yorkshire, East Midlands, Teesside, and Liverpool. There will also be at least one in Scotland, Wales and Northern Ireland.

Hunt says the OBR expects the UK will not enter a recession this year, with a contraction of just 0.2%.

That’s an upgrade on the 1.4% contraction forecast last November, when the UK was forecast to drop into recession.

And after this year, the UK economy will grow in every single year in the forecast period, the chancellor says.

But, growth is still relatively anaemic through the forecast period, here’s the details:

• 2024: GDP up by 1.8%, up from the 1.3% growth forecast last November

• 2025: +2.5%, down from 2.6% growth forecast last November

• 2026: +2.1%, down from 2.7% growth forecast last November

• 2027: +1.9%, down from 2.2% growth forecast last November

They also expect the unemployment rate to rise by less than one percentage point, to 4.4% with 170,000 fewer people out of work, compared to their autumn forecast.

Hunt confirms fuel duty will be frozen. And he mocks Labour claims they called for this first. Labour has opposed previous moves to freeze it, he says.

Hunt says he is giving £100m to allow charities to continue their fantastic work.

He will assign an extra £10m over the next two years to charities that address suicide.

And he will help “the great British pub”. Draught relief will be made more generous. It will by up to 11p lower than the relief for supermarkets. This is only possible because of Brexit. It amounts to a “Brexit pubs guarantee”, he says. He says British ale is warm, but duty is frozen.

Hunt starts with the OBR forecasts.

The PM wants to halve inflation, he says.

The government supports the Bank of England’s independence on monetary policy, Hunt says (this is the setting of interest rates by the BoE).

The OBR expects inflation to fall from 10.7% to 2.9% by the end of 2023, he says.

Inflation, Hunt adds, has been the “root cause” of the strikes seen in recent months.

Antonia Bance of the TUC tweets, though, that the strikes are also about the erosion of public sector pay since the financial crisis 15 years ago:

Hunt start by saying the British economy “is proving the doubters wrong”.

He took difficult decisions in the autumn, he says.

The IMF says the UK is on the right track. But the government remains vigilant.

He says the OBR now forecasts the UK will not enter a technical recession this year.

A technical recession is two quarters of negative growth in a row.

Last November, the OBR had predicted that Britain would fall into a recession lasting just over a year from the third quarter of 2022 (with a peak-to-trough fall in GDP of 2 per cent).

Jeremy Hunt is about to start his statement.

Pat McFadden, the shadow chief secretary to the Treasury, has said today’s budget shows that Labour is “setting the agenda”.

In an interview with GB News, he cited action on childcare, extending the energy price guarantee and freezing fuel duty as policies in the budget that Labour was already advocating. He said:

I do think we’ve set the agenda for some of this. We called for example, for an extension of the cap on energy prices for another few months.

We called for the freeze in fuel duty to be carried over for another year and we’ve been talking about childcare for quite a long time.

So I’m quite pleased that Labour is setting the agenda. If the government wants to follow our lead, I don’t mind that.

It does mean the next time you hear a government spokesperson saying Labour is not fit to run the country, then maybe we should question that, because if they’re adopting so many of our policies, then it suggests that we’re not as reckless as they sometimes suggest.

But McFadden also suggested the government was not doing enough on growth. He said:

If you look, first and foremost, at the green transition, this is what’s powering growth in the United States right now, with President Biden’s Inflation Reduction Act, we’re just not on the pitch in the UK compared to what they’re doing in the United States right now.

The SNP and the Liberal Democrats have both issued statements this morning saying the Treasury’s decision to extend the energy price guarantee at its current rate for another three months does not go far enough.

Stewart Hosie, the SNP’s economy spokesperson, said:

It’s truly pathetic that the chancellor has failed to cut energy bills, despite having ample resources to do so. The Tories are ripping families off by keeping bills at such exorbitantly sky-high levels, with many families forced to pay three times what they paid a year ago.

With energy companies making record profits, and the wholesale price of gas falling, there is no excuse for this shameful Tory decision, which will hammer household incomes and push even more families into poverty, hardship and debt.

And Sarah Olney, the Lib Dem Treasury spokesperson, said:

This does not go far enough. Instead of a sticking plaster for another three months, we need meaningful action now.

The Liberal Democrats are calling on the chancellor to cut energy bills by £500 per household. This would make a significant difference to households and the government can afford to do it, they are choosing not to.

In three months time families will once again be facing a cliff edge of unaffordable heating bills.

Good morning. Last year we had a series of huge fiscal announcements from the Treasury, as well as perhaps the most consequential “mini-budget” of all time (it brought down a PM), but we never an actual, proper budget. Today’s will be the first real once since autumn 2022. Jeremy Hunt will deliver it at 12.30pm.

Rather, deliver what is left of it. The Treasury itself has already briefed many of the significant measures in it. It sent out at least eight budget-related press notices in recent days, and another one arrived this morning, confirming that under the energy price guarantee energy unit costs will be capped for another three months, so that the average household faces an annual bill of £2,500. The cap was due to rise at the end of April, pushing an average bill up to £3,000. There is more coverage of this on our business live blog.

Chancellors always pre-announce some of the second-order budget announcement, because otherwise they will get no coverage on the day, but they like to save up something popular for the day itself. Conventionally, this is described as the “rabbit” being pulled out of the hat. Yesterday the Guardian got hold of the rabbit, and we yanked it out ourselves. Hunt is going to announce a £4bn expansion of free childcare for one- and two-year-olds in England. You can read the details here.

Magicians pull rabbits out of hats by means of an illusion; it’s fake. Budget announcements are meant to be a bit more credible, and so far the reaction to the childcare news has been positive.

James Bowen, director of policy for school and nursery at NAHT, the union for headteachers, said:

While we will need to look closely at the detail, if the government does increase the hourly funding rates to early years providers this will be welcome news. We know that the funding settings currently receive from government is woefully inadequate and many providers simply cannot afford to operate at those levels.

Paul Johnson, director of the Institute for Fiscal Studies, said the news was welcome, but that a wider review in this area was needed.

Abby Jitendra, a family policy expert at the Joseph Rowntree Foundation, also applauded the announcement, while saying wider change was needed.

Sebastian Payne, who runs Onward, a right-leaning thinktank, also praised the announcement.

And this is from Justine Roberts, founder of the Mumsnet website.

If you will forgive the mangling of two hackneyed political cliches, Hunt may be pulling out a rabbit, but shooting the fox. Labour has made it clear that it wants to make a big childcare promise part of its “retail offer” to voters at the next election. Hunt is now making that harder. In an initial response to the story, Rachel Reeves, the shadow chancellor, told LBC last night.

If it’s a serious package that’s going to make a difference to working parents, we’ll back it.

I will be covering the budget announcement with my colleague Graeme Wearden, who normally writes the business live blog, and bringing you analysis and reaction afterwards. Here are the key times for the day.

12pm: Rishi Sunak faces Keir Starmer at PMQs.

12.30pm: Jeremy Hunt delivers the budget.

2.30pm: Richard Hughes, chair of the Office for Budget Responsibility, holds a press conference.

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