Chancellor moves to help families and encourage people back into workplace

The majority of Jeremy Hunt’s announcements around personal finance were aimed at supporting people in work.

As widely predicted, there was plenty of news around covering the cost of child care.

The Chancellor announced that 30 hours of free weekly childcare is being extended to cover children below the age of three. He said this will reduce childcare costs for families by nearly 60 per cent.

The payments will eventually cover all children from the age of nine months but will only apply to households where both parents are working.

And the provision only applies within school term-time – 38 weeks of the year.

The Chancellor added that he will pilot incentive payments of £600 for childminders joining the profession – £1200 if they join through an agency.

One of the key elements of the Budget was centred on encouraging people back into work.

As widely predicted Jeremy Hunt increased the pensions annual tax-free allowance from £40,000 to £60,000.

He also abolished the Lifetime Allowance – previously set at £1.07m.

The chancellor said a white paper is being published on disability benefits, including plans to abolish the work capability assessment and to separate benefits entitlement from an individual’s ability to work.

As expected Jeremy Hunt set out plans to continue to support households with cost-of-living pressures including keeping the Energy Price Guarantee at £2,500 for the next three months and ending the premium that over four million households pay on their prepayment meter, bringing their charges into line with comparable customers who pay by direct debit.

Other announcements covered fuel and alcohol taxation.

Fuel duty has been frozen – the 5p cut to fuel duty on petrol and diesel, due to end in April – will be kept for another year.

From August, alcohol taxes in pubs to be 11p in the pound lower than the rate in supermarkets.

The Chancellor went on to set out plans to continue to support households with cost-of-living pressures including keeping the Energy Price Guarantee at £2,500 for the next three months and ending the premium that over 4 million households pay on their prepayment meter, bringing their charges into line with comparable customers who pay by direct debit.

Nigel Smith

Nigel Smith, managing partner at Dorset law firm Ellis Jones Solicitors, said: “Some of the measures in the Chancellor’s Budget for Budget for Growth are welcome.

“Although the focus on retirees, those with long-term illnesses and parents struggling with childcare costs may grab the headlines, their reintegration into the workplace will need to be carefully managed.

“The workplace may have changed considerably for some of those returning to work while others may have expectations around flexible and remote working, or a four-day week. They may have protected characteristics or be subject to other provisions of employment law.

“The Chancellor’s Budget may be a rallying cry for the economically inactive to re-enter the jobs market but it is also a clarion call for employers and HR officers to revisit their policies and procedures to ensure they are appropriate for every stage of the process, from recruitment to onboarding and eventual employment.”