Families on universal credit to get their childcare costs paid upfront

Jeremy Hunt has vowed to reduce childcare costs as part of a wider drive to get more people back into work.

The chancellor will also shake up the benefits system so that 2.5million people written off as long-term sick can return to the workplace without fear of losing their entitlements if it doesn’t work out.

And he will tempt over-50s to return to employment by investing in skills training in what he billed a ‘back-to-work Budget’.

Mr Hunt will also stop customers on pre-payment meters being charged more for energy – which could chop £45 a year off bills. And he is tipped to axe a rise of £500 a year in average fuel bills, due to come into force next month.

The measures are likely to anger some Tory MPs who are demanding tax cuts.

But the chancellor is confident Wednesday’s Budget will drag the economy from the doldrums by boosting the workforce.

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He said high childcare costs stop some parents on low incomes taking a job. To remedy that he will pay costs upfront to families on universal credit. The maximum parents can claim – which has stayed at £646 a month per child since 2005 – will rise, though he did not say by how much.

Scrapping a system used to assess eligibility for benefits will allow sick and disabled people to attempt to work without fear of losing payouts, he added.

And urging over-50s not to retire too early, he told The Mail on Sunday: ‘This should be a time when you think, “I’ve got 20 years of working life ahead of me”.’ Some 600,000 in that age group have quit work since Covid – including many well-off people who no longer pay a mortgage, say experts.

While reducing taxes is high on his list of priorities, Mr Hunt said it was important to be ‘responsible with public finances’. ‘Breaking down barriers that stop people working’ is key to growing the economy, he added.

Shadow chancellor Rachel Reeves said No.10 had left the UK in a ‘low growth, low investment spiral’. And the Lib Dems’ Sarah Olney said the Budget ‘looks to be hot air and no help’ for hard-up Britons.

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