'Brexit pubs guarantee' and free childcare, what was in the UK's Budget?

THE UK GOVERNMENT’S budget has frozen the duty on draught pints, which will see the duty on pints from a pub drop to up to 11p lower than the duty on beer in supermarkets, it was announced today.

While the tax on other alcohol will soar by 10.1% in August in line with inflation after a freeze during the peak of the cost-of-living crisis, this freeze on pints will help support “the great British pub”, the UK’s Chancellor of the Exchequer Jeremy Hunt said.

“Today, I will do something that was not possible when we were in the EU and significantly increase the generosity of Draught Relief,” Hunt announced.

“And even better, thanks to the Windsor Framework negotiated by my right honourable friend the Prime Minister, that change will now also apply to every pub in Northern Ireland.”

The budget’s cost-of-living support for this year and the next would total £94 billion (€107 billion), the UK government announced.

“In the face of a cost-of-living crisis… we have demonstrated our values by protecting struggling families,” Hunt said in a budget speech outlining extra support especially for energy bills and childcare.

It came as teachers, junior doctors, civil servants, BBC journalists and drivers on London’s underground Tube railway staged the latest day of mass walkouts.

Hundreds and thousands of public and private sector workers show little sign of ending strike action that began last year when rocketing inflation slashed the value of wages.

“High inflation is the root cause of the strikes we have seen in recent months,” Hunt told parliament.

 Back to work 

The Tory government also announced a huge expansion of its free childcare scheme in England to encourage parents back into work.

Hunt promised up to 30 hours per week of free childcare for eligible households in England with children from as young as nine months, instead of just three and four-year-olds under the current policy.

He also toughened sanctions on benefit claimants failing to meet requirements to look for work.

Hunt increased the amount workers can save tax-free in pension funds to discourage early retirement.

The government wants to fill 1.1 million vacancies – in part caused by a lack of EU workers after Brexit and a record number of people classed as long-term sick.

Energy subsidy

Other key announcements included the extension of a subsidy on energy bills for a further three months, after the invasion of Ukraine by oil and gas producer Russia sent them surging – and fuelled decades-high inflation.

That means that the average household will spend no more than £2,500 per year for gas and electricity combined.

Without the support, it would have risen to £3,000.

But a separate state support scheme, worth £400 per household over the colder winter months, will not be renewed.

Hunt also confirmed that defence spending would increase by £11 billion over the next five years and outlined a 20-year plan to capture carbon and commit to nuclear energy as it strengthens energy supplies and seeks a net zero economy by

Avoiding recession 

The UK economy is now set to avoid recession, Hunt said, citing the latest forecasts.

The economy will contract 0.2% this year, according to the Office for Budget Responsibility fiscal watchdog. That marked a major upgrade from its prior forecast of minus 1.4%.

Gross domestic product was then expected to grow by 1.8% in 2024 and by 2.5% in 2025.

Inflation, which zoomed to a 41-year peak above 11% last October, was set to slow sharply.

The OBR expects consumer prices index inflation to slow sharply from 10.7% in the fourth quarter of last year to 2.9% by the end of 2023.

With reporting from PA

– © AFP 2023