Jeremy Hunt announces free childcare for kids over nine months old and energy bill support

Jeremy Hunt has said in his spring Budget that the current energy price guarantee will be extended as well as an expansion for free childcare coverage.

In the lunchtime announcement, the chancellor said the energy price guarantee will be extended for a further three months from April to June at its current level. In doing so, he cancelled the planned £500 hike in average energy bills which was due to come into force next month.

It will see bills for the average household staying at around £2,500, instead of going up to £3,000 as was previously announced.

A planned 12p rise in fuel duty – a tax charged on any petrol, diesel and other fuels used in vehicles or for heating – has also been suspended and the current relief of 5p per litre will be extended for another year

Action on prepayment meters will see an end to the so-called ‘prepayment premium’ from July, something that the Treasury expects will save more than four million households £45 a year on their energy bills.

Mr Hunt also announced further help for parents of preschool-age children with free childcare — which currently covers three and four-year-olds for up to 30 hours per week — to be expanded to include all children over nine months old – for families where all adults are working at least 16 hours.

The chancellor said: “The 30 hours offer will now start from the moment maternity or paternity leave ends. It’s a package worth on average £6,500 every year for a family with a two-year-old child using 35 hours of childcare every week and reduces their childcare costs by nearly 60%.

“As it is such a large reform, we will introduce it in stages to ensure there is enough supply in the market.

“Working parents of two-year-olds will be able to access 15 hours of free care from April 2024, helping around half a million parents. From September 2024, the 15 hours will be extended to all children from nine months up, meaning a total of nearly one million parents will be eligible.”

The move comes in a bid to get more parents back into the workplace and help boost economic growth. Efforts to encourage the over-50s, the long-term sick, disabled, and benefits claimants back into the workplace are also included in the plans. 

A newly announced pilot will see the incentive payments of £600 for new childminders rise to £1,200 for those who join through an agency, while funding to nurseries providing free childcare will rise to £288m next year.

On top of that, the government will extend the minimum staff-to-child ratios, which currently stand at 1:4, to 1:5 for two-year-olds in England – however, this change will be ‘optional’.

The eligibility system — used to assess eligibility for sickness benefits, paying parents on Universal Credit childcare support upfront and increasing the amount they can claim by several hundred pounds — will now be axed. This means claimants can continue to receive the payments after they return to employment — a move hoping to encourage people back into work.

Number 10 / Flickr

The chancellor also unveiled a £63m fund to keep public leisure centres and pools going in the face of rising energy prices, as well as £10m assigned over two years to help the voluntary sector play a role in suicide prevention.

Draught beer in pubs will also be taxed less, and from August 1st duty on draught products in pubs will be 11p lower than supermarkets.

£30m was offered up to increase support and housing for veterans, and 12 new Investment Zones were confirmed – with the chancellor calling them ’12 potential Canary Wharfs’ – including one in Greater Manchester – if chosen, these areas will have access to £80m of support.

New Levelling Up Partnerships will have £400m available to areas including Blackburn, Oldham, Rochdale, Redcar and Cleveland, Mansfield, South Tyneside, and Bassetlaw.