Tuesday, 21 Mar 2023

Jeremy Hunt declares UK 'won't enter recession' as he opens Budget

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The spring Budget has been announced, set against a dramatic backdrop of high inflation, widespread strikes and the cost of living crisis.

Chancellor Jeremy Hunt, whose net worth is estimated to be around £14 million, has vowed to support households struggling to make ends meet.

The UK will not enter a ‘technical recession’ this year, he told the Commons.

He continued: ‘We remain vigilant, and will not hesitate to take whatever steps are necessary for economic stability.

‘Today the Office for Budget Responsibility forecast that because of changing international factors and the measures I take, the UK will not now enter a technical recession this year.’

A ‘Brexit pubs guarantee’ will see the duty on draught products in pubs up to
11p lower than the duty in supermarkets from August, the Chancellor announced in the Budget.

The 5p fuel duty cut will also be extended for 12 months.

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It may seem like yesterday, but it’s been six months since the disastrous mini-budget of Kwasi Kwarteng was unveiled.

It kick-started a domino effect of chaos that led to Liz Truss stepping down as Prime Minister after mere weeks in the role.

Half a year on, the key issue facing the country remains the cost of living crisis.

Unions have been striking in full force and families have been calling for greater support.

Ahead of his Budget speech, Mr Hunt confirmed that the Energy Price Guarantee, which limits a typical household energy bill to £2,500, will be extended for another three months.

It had been due to increase to £3,000 in April to reduce the burden on state finances.

Is enough being done to support people through the cost of living crisis? Have your say now

Mr Hunt said: ‘High energy bills are one of the biggest worries for families, which is why we’re maintaining the energy price guarantee at its current level.

‘With energy bills set to fall from July onwards, this temporary change will bridge the gap and ease the pressure on families, while also helping to lower inflation too.’

Citizens Advice chief executive Dame Clare Moriarty said: ‘Unfortunately it’s not all good news. The withdrawal of the Energy Bill Support Scheme will still mean the average monthly bill rises by £67 from April.

‘With millions already unable to afford their bills and energy prices set to remain high in the years ahead, the government must now look at long-term solutions to this problem.’

Meanwhile, Mr Hunt was expected to hammer home and encourage a return to work for benefits claimants, the over-50s and disabled to encourage growth.

Speaking in January at Bloomberg, he said employment levels were lower than they were before the coronavirus pandemic by around 300,000 people.

He is expected to announce a rise in the maximum universal credit childcare allowance by several hundred pounds.

Speaking this morning, Joeli Brearley, founder and CEO of Pregnant Then Screwed, said: ‘After eight years of hard campaigning we are really pleased to hear rumours of significant investment in the childcare sector and the recognition that investing in childcare is good for the economy.

‘However the CBI estimates that to do what the government is planning costs £8.9 billion not £4 billion, so we need to see the detail as to how this money is being distributed.

‘Reports have suggested that they will also give £288 million to make up the shortfall for the current free hours entitlement for 3 and 4 year olds – that’s not enough.’

Some Tories have been pushing for tax cuts despite Mr Hunt being against the measure.

Eyes have been on the chancellor to see if he announces any kind of tax cut or relief for people and businesses.

Ed Powell, the founder of The Steel Landscaping Co. has noticed a sharp increase in his monthly bill.

His company, a supplier and installer of outside steel products, has seen the cost of producing their products using electricity increase by 60% and using gas by almost 130%.  

He told Metro.co.uk: ‘Energy price increases have been a continuing challenge for us, further exacerbated by the war in Ukraine. Manufacturing much of the materials we use such as steel and brick requires considerable energy output, and the cost of doing so has increased massively.’

He is calling for the government to continue supporting businesses whilst costs remain high. 

‘From our perspective we’d like to see a continuation of the energy bill relief scheme for businesses. 

‘However, if this does end as mooted in March, then we’d like to see some clarification on how the government is looking to support smaller businesses and how they might increase investor confidence in the construction sector to give it a boost in the coming months.

‘Perhaps this comes in the form of business rate relief for smaller businesses for subsidies or investment in apprenticeships, training and development.’

Mr Hunt managed to emerge relatively unscathed from the mini-budget chaos, unlike Ms Truss and Mr Kwarteng.

He later admitted the Government went ‘too far, too fast’ with the proposals.

Speaking following his appointment as Chancellor, he had said: ‘My focus is on growth underpinned by stability.

‘The drive on growing the economy is right – it means more people can get good jobs, new businesses can thrive and we can secure world class public services. But we went too far, too fast.

‘We have to be honest with people and we are going to have to take some very difficult decisions both on spending and on tax to get debt falling, but at the top of our minds when making these decisions will be how to protect and help struggling families, businesses and people.’

Mr Hunt added that ‘clear and robust’ plans would be set out soon to ensure taxpayer money is ‘well spent’.

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