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The Budget and free childcare

The Budget and free childcare


On Wednesday, Jeremy Hunt delivered his first budget as chancellor which was centred on boosting the workforce and economic growth. But has he done enough to help parents with the staggering cost of childcare?

[SFX of the House of Commons… “Call the Chancellor”]

On Wednesday, the UK’s chancellor, Jeremy Hunt, delivered his first budget amid a 

backdrop of public sector strikes, eye-watering inflation and a cost-of-living crisis. 

Nevertheless, the chancellor sounded upbeat when he revealed that the government’s official forecaster, the Office for Budget Responsibility, had upgraded its gloomy assessment of the state of the nation’s finances. 

The UK will not now enter a technical recession this year. They forecast…they forecast we will meet the prime minister’s priorities to half inflation, reduce debt and get the economy growing. We are following the plan and the plan is working.”

Jeremy Hunt

But, Jeremy Hunt conceded that a million job vacancies needed to be filled and, in particular, that the cost of childcare prevented many people from returning to work.

Recent analysis from the children’s charity Coram has found that parents in London spend around 71% of their weekly earnings on childcare. Among the highest in the world. 

Against this backdrop, Jeremy Hunt announced that he is expanding free childcare to under two year olds in England in a bid to encourage parents back into full-time employment: 

“I don’t want any parent with a child under 5 to be prevented from working if they want to because it’s damaging to our economy and unfair mainly to women. So today I announce that in eligible households where all adults are working at least 16 hours we will introduce 30 hours of free childcare, not just for three and four year olds but for every single child over the age of 9 months.”

Jeremy Hunt

Many campaigners and parents groups welcomed the plans, which also include a proposal to extend school wrap-around care by 2026.  

But some groups expressed concern that demand for places will outstrip supply and government funding for the scheme is insufficient.

Others are worried that the number of two-year-olds an adult can look after in a childcare setting will be increased from 4 to 5.

Labour has long called for childcare reform. So how did they respond to the Tories’ attempt to seize the political initiative on this issue?


Labour inevitably poured scorn on much of the government’s budget.  This is how the leader of the opposition, Keir Starmer, characterised the chancellor’s statement: 

“After thirteen years of his government, our economy needed major surgery. But like millions across this country, this budget leaves us stuck in the waiting room with only a sticking plaster to hand. A country set on a path of managed decline. The sick man of Europe once again (jeers).”

Keir Starmer

But Keir Starmer added that plans to help working parents with the cost of nurseries should be welcomed – even if it will take some time for them to be fully rolled out.

Keir Starmer: “On childcare, of course, more money in the system is obviously a good thing (Tory jeers). They obviously didn’t listen to when he said he’s actually going to do it (laughter).”

Wes Streeting: “They won’t be here.”

As Labour’s shadow health secretary, Wes Streeting, suggested, there may well be a very different party in office when much of this policy comes into effect.

So, what else did the government announce?


In an attempt to stop people from retiring early, Jeremy Hunt announced he would scrap the “lifetime allowance” on tax-free pensions… that’s how much workers can save in their pension pot. 

“No one should be pushed out of the workforce for tax reasons, so today I will increase the pensions annual tax-free allowance by 50 percent from £40,000 to £60,000. Some have also asked me to increase the lifetime allowance from its £1 million limit, but I’ve decided not to do that, instead I will go further and abolish the lifetime allowance all together.”

Jeremy Hunt

And as Jeremy Hunt tries to balance the books, he also announced he’d be pressing ahead with raising corporation tax from 19 per cent to 25 per cent in April… that’s despite pressure from Tory backbenchers to keep the rate “under review” instead. 

Potholes and swimming pools were also in the spotlight, both receiving extra funding, while government help with energy bills was extended for another three months.

It’s clear the chancellor wants to get more people into work to help grow the economy… but with many of the new announcements around childcare and pensions not due to start for a number of months, for many households, the cost of living crisis will continue to be felt. 

Today’s story was written by Rhys James and mixed by Imy Harper.