How will the spring Budget affect you? Our expert explains all you need to know

Sarah Davidson has explained just exactly how Jeremy Hunt’s Budget announcement today will impact you (Picture: Metro.co.uk/Getty)

Enterprise, Employment, Education and Everywhere – Jeremy Hunt’s ‘four Es’ that together formed the bulk of his Spring Budget statement.

The idea is that the Chancellor’s policies will deliver:

Growth for businesses and the economy

Jobs for those on benefits, unable to afford childcare and at the end of their careers facing tax penalties for staying in work

More maths, cheaper childcare and specially named ‘returnerships’ for older workers who want to come back

For everyone everywhere

Jolly good, sounds like a great plan. Is it?

Hunt called it a Budget to ‘break down barriers that stop people working’ and announced a host of tax tweaks that aim to make it easier for people currently out of employment to get back in.

Do the claims live up to the hype? Or would Energy bill misery, Extortionate costs of living, Endless strikes left unresolved and Empty promises be a more appropriate set of Es?

Let’s have a look.

Policy change: More free childcare for working parents

What it means for you: On the face of it, doubling the number of hours of free childcare available to 30 a week so long as both parents are working a minimum of 16 hours per week sounds good.

Broadening its scope so that all children under the age of five will be eligible will also support more parents with older children back to work, at least part-time.

But it won’t be available any time soon. The staged implementation means waiting a year before two and three-year olds get their 15 hours of free childcare and two and a half years before all children under five get the full 30 hours.

It’s worth remembering that government must call a general election by 17 December next year. So any future government could decide to renege on the promise.

Policy change: Energy price guarantee extended and prepayment meter charges cut

What it means for you: The government calculates that keeping the energy price cap at its current level of £2,500, the average household will save £160.

Let’s just be real though – no-one is actually saving anything at all. One, the price guarantee does not cap annual energy bills at £2,500 – that’s just a random average number.

Two, this ‘saving’ is simply what the government is now not allowing energy companies to charge us from next month.

A cynic might say the planned rise to £3,000 was announced precisely to allow government to reverse the plan and ‘save’ us all this imaginary money.

The move to ban energy providers from charging customers with a prepayment meter more for their energy than customers who pay by direct debit is worth something though – £45 a year, working out at 87p a week.

Don’t forget though that from next month the £400 knocked off all household energy bills over the winter stops. So that £66 rebate each month will reappear on our energy bills in two weeks’ time.

Policy change: Lifetime pension tax scrapped

What it means for you: Abolishing the lifetime allowance for pension contributions is designed to stop senior doctors from leaving the NHS and over 55s leaving the workforce.

Currently, anyone who has saved more than just over a million pounds into their pension over their lifetime is hit with a whopping great tax bill – it ends up costing people money to keep working.

But let’s just rewind – this is a tax levied on people who have paid in more than £1million to fund their retirement.

Based on HMRC figures for 2020/21 that meant 8,610 (probably quite rich) people paid that penalty. That is one in a thousand pension savers.

In total, there were £382 million in charges. That’s money going straight back into those pockets and not into the public purse.

Policy change: Tax cut for pubs

What it means for you: From 1 August, you’ll pay around 11p less for a pint in a pub than a pint from the supermarket. It’s a bid to keep British pubs from closing under crippling costs and the drop in footfall following the pandemic.

It also prompted one of Hunt’s more terrible Dad jokes: ‘British ale may be warm, but the duty on a pint is frozen.’

This move is part of a ‘new Brexit pubs guarantee’ – not terribly sure what that is though…

Policy change: Fuel duty frozen

What it means for you: The previously planned 11p rise in fuel duty in line with inflation was – surprise, surprise – abandoned. The 5p cut brought in last year under Rishi Sunak’s stint in the Treasury will stay for another year. And Hunt froze fuel duty for the 13th year on the trot. Together, the government says it’ll save motorists about £100 on average next year.

Policy no change: Business rates and corporation tax

What it means for you: There was no u-turn on corporation tax rising from 19 per cent to 25 per cent next month. There was also nothing new on business rates.

Taken together, it will mean some businesses will collapse under the weight of already high and rising tax bills.

Business rates are particularly important for companies with a presence on the British high street as only businesses with a physical premises have to pay the levy. Businesses that trade online only are exempt.

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Metro expert Sarah Davidson has told just how you will be impacted by Jeremy Hunt’s Budget announcement.