The UK treasury is set to unveil its latest budget aimed at encouraging thousands of Britons back to work in the face of labour shortages and a cost-of-living crisis.
“Support will be focused on people with disabilities and long-term illnesses, parents, the over-fifties and those on Universal Credit”, the Treasury said.
UK Finance Minister Jeremy Hunt is expected to present measures in the House of Commons on Wednesday afternoon aimed at helping parents who may be forced to cut back on work because of the high childcare costs, and encouraging older workers to stay in the workforce.
Hunt is expected to announce the provision of 30 hours of free childcare a week for working parents to be expanded to cover one and two-year-olds.
The UK’s inactivity rate, at 21.3% according to the latest figures, remains higher than before the pandemic and is weighing on the economy, adding to the difficulties in hiring EU workers after Brexit: in all, 1.1 million jobs are unfilled in the country.
Thousands of over-fifties have opted for early retirement, and a record number of Britons are prevented from working by long-term illnesses, one of the consequences of the pandemic and the under-funding of public health services.
Addressing energy crisis challenges
In response to urgent appeals for more help to deal with soaring energy prices, the UK government made an early announcement on Wednesday morning revealing plans to extend the energy price cap for households by three months.
The measure, which will cost the Treasury €4.5 billion, should save the average British household more than €180, the government said.
However, Britons will see the end of another €450 per household energy payment in April, which had been staggered between October and March.
Hunt is expected to focus on the cost of living, including a promise to end the higher energy tariffs paid by the more than 4 million households in the country, many of them low-income, connected via pre-paid meters.
On matters of tax, Businesses are concerned about a long-awaited rise in corporation tax from 19% to 25% in April, while a freeze on fuel taxes is also widely anticipated.
On Wednesday the Office for Budget Responsibility (OBR), the government’s budget forecasting body, will publish its new forecasts for the country’s economy.
The UK avoided recession at the end of 2022 and growth rebounded to 0.3% in January in the country. In addition, London has borrowed £30 billion (€34 billion) less than expected on a cumulative basis in the current fiscal year.
Hunt is also expected to announce plans to create 12 “investment zones” with tax incentives, particularly in the north and centre of England.
Strikes grip the UK
Hundreds of thousands of teachers, doctors and London Underground drivers have staged mass walkouts to coincide with the budget announcement in one of the biggest days of industrial action in the country for months.
Strikers are angry that public-sector workers have borne the brunt of the budget austerity implemented by Hunt’s Conservative Party after it took power in 2010 following the global financial crisis.
The British Medical Association, which represents the fully qualified physicians known in the UK as “junior doctors,” says first-year doctors have seen their pay fall by 26% over the past 15 years after accounting for inflation.
Consumer prices rose 10.1% in the year through January, the fifth consecutive month of double-digit increases. To combat inflation, the Bank of England has approved 10 interest rate increases over the past 15 months, raising the cost of mortgages, consumer and business loans.