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The chancellor has announced the budget for 2023.

The UK will now not enter a technical recession this year, say independent forecasters the Office for Budget Responsibility (OBR).

Inflation will more than halve and reduce to 2.9% by the end of the year, the OBR expects.

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Here are the key points:

Parents – working 16 hours a week – of children aged nine months to five years will get 15 hours free childcare to encourage caregivers to enter the workforce.

This will be staggered from April 2024 to ensure enough places. Children up to two years old will get 15 hours free from April 2024, children from nine months up will benefit from September 2024, and from September 2025 every single working parent of a child under five will have access to 30 hours free childcare per week.

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pensions

The lifetime allowance – the total amount workers can accumulate in their pension savings before paying extra tax – has been abolished. Mr Hunt hopes it will stop 80% of NHS doctors from receiving a tax charge.

The pensions annual tax-free allowance will rise by 50% from £40,000 to £60,000.

Budget reaction – live

Tax relief of 11p has been announced on draft drinks served in pubs from 1 August.

An extension of the 5p cut in fuel duty, at a cost of £6bn, has been announced for a year. Fuel duty will also be frozen for the next 12 months.

The government will abolish the work capability assessment for disabled people and separate benefit entitlement from an individual’s ability to work. The aim is to enable disabled people to seek work without fear of losing their benefits.

A new programme called universal support will also fund extra support for disabled people to find work.

A new apprenticeship, called a returnership, will be created for those aged 50 and older wanting to return to work. Mr Hunt said it will make existing skills programmes more appealing for older workers and focus on previous experience.

An extra £400m will increase mental health and musculoskeletal workplace support to stop people being forced to leave work due to sickness.

As corporation tax on profits over £250,000 is due to rise from 19% to 25% in April, businesses will be able to offset 100% of UK investments against their profits to bring down tax bills. The OBR said it will increase business investment by 3% for every year. Mr Hunt announced the measure for the next three years but intends to make it permanent “as soon as we can responsibly do so”.

An “enhanced credit” has been introduced for small and medium-sized businesses if they spend 40% or more of their total expenditure on research and development. They can claim credit worth £27 for every £100 spent.

As expected, the government is extending the energy price guarantee (EPG), which keeps the average household bill at £2,500 until the end of June by capping the unit price of electricity. The typical bill was due to rise to £3,000 from 1 April. Under the EPG the government effectively caps household costs and reimburses energy companies for the difference between that, and the cost of buying power on wholesale markets.

The energy rebate scheme – paid direct to customers in six instalments of £66 and £67 a month – has not been extended and will end this month.

The so-called “prepayment premium”, whereby those using prepayment meters are charged more for their gas and electricity, will be scrapped from July, enabling four million families to save £45 a year on their bills.

Investment zones

Twelve new investment zones or “potential Canary Wharfs” will be eligible for £80m in funding to boost business there, with at least one each in Scotland, Wales and Northern Ireland.

The ones in England are: Greater Manchester, West Midlands, North East, South Yorkshire, West Yorkshire, East Midlands, Teesside, and Liverpool.

There will also be £200m extra funding for local regeneration projects.

other

An extra £200m a year – in addition to the £500m already allocated – will be made available to tackle “the curse” of potholes.

Public leisure centres and pools will share a £63m fund to help with costs.

From next year medicines and technologies approved by other trusted global regulators will be eligible for “near automatic” sign-off.

defence

Defence spending will rise an extra £11bn over the next five years. The defence budget is currently about £50bn.

Up to £600m in tax relief on energy efficiency measures has been announced for businesses, in a bid to reduce energy use by 15%.

Nuclear power will be classed as “environmentally sustainable” to grow investment in the sector.

The government plans for a quarter of electricity to be nuclear-powered by 2050. To that end Great British Nuclear has been created – with the aim to “bring down costs and provide opportunities across the nuclear supply chain”.

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Post Office inquiry: Former complaints handler executive says she never ‘knowingly’ did anything wrong

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Post Office inquiry: Former complaints handler executive says she never 'knowingly' did anything wrong

A former top Post Office executive has told the inquiry into the Horizon scandal that she never “knowingly” did anything wrong.

Angela van den Bogerd, who held various roles over 35 years at the organisation, made the comment after opening her evidence on Thursday by saying she was “truly, truly sorry” for the “devastation” caused to wrongly convicted sub-postmasters.

Her roles at the Post Office included handling complaints about its Horizon software, which was provided by Japanese firm Fujitsu.

More than 700 Post Office managers were prosecuted between 1999 and 2015, after the system made it seem like money was missing from branches. At the time, the company insisted Horizon was robust.

Ms van der Bogerd, who was played by Coronation Street actress Katherine Kelly in the ITV drama Mr Bates Vs The Post Office, had previously not spoken publicly since a 2019 High Court case.

At the time, Judge Peter Fraser criticised her testimony and said she “did not give me frank evidence, and sought to obfuscate matters, and mislead me”.

Jason Beer KC, lead counsel to the inquiry, challenged Ms van den Bogerd’s opening statement, as he accused her of not saying sorry for her own role in the scandal.

Ms van den Bogerd, who resigned as the Post Office’s business improvement director in 2020, said she regretted missing significant documents and apologised for “not getting to the answer more quickly”.

She said: “But with the evidence I had and the parameters of my role at the time, I did the best I could to the best of my ability.”

Ms van den Bogerd added: “I didn’t knowingly do anything wrong and I would never knowingly do anything wrong.”

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The inquiry heard that Ms van den Bogerd was sent an email in December 2010 informing her Fujitsu could remotely amend cash balances in branch accounts via Horizon.

She told the inquiry she had no memory of it and only became aware of the issue in a January 2011 email.

The inquiry was shown a transcript of a meeting that same month between her and sub-postmistress Rachpal Athwal, who was sacked after being wrongly accused of stealing £710 before being reinstated.

In the meeting, Ms van den Bogerd said Horizon could not be accessed remotely by anyone from the Post Office, without mentioning that Fujitsu could, the inquiry heard.

Mr Beer asked: “Are you saying that what you said overall there is accurate?”

Ms van den Bogerd replied: “So that is accurate. I go on to talk later about Fujitsu, I believe”. Mr Beer said it was inaccurate because she had not given the full picture.

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Scandal ‘tip of the iceberg’

The inquiry also heard that, prior to a High Court case in 2019, Ms van den Bogerd made a witness statement in 2018 in which she said the first she knew of the possibility of inserting transactions into the system remotely was in the year or so before.

Mr Beer told the inquiry: “That was false.”

She replied: “Well, at the time I didn’t think it was.”

Pressed further on the issue, she said the messaging on remote access was “constantly changing” and that colleagues had been “very strong” that such access was “impossible”.

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‘I have had breakdowns’

Ms van den Bogerd was also asked about an October 2014 email she and other senior staff were sent by Post Office media officer Melanie Corfield, which discussed what the response should be if anyone asked about remote access to Horizon.

The email said: “Our current line if we are asked about remote access potentially being used to change branch data/transactions is simply: ‘This is not and never has been possible’.”

Mr Beer said: “You knew that was false from multiple sources by then, by now, didn’t you?”

Ms van den Bogerd appeared flustered, before replying: “Clearly I was aware of that and just didn’t pick this up… it didn’t register with me at the time, but obviously from what we’ve discussed then this was incorrect terms of reference of a flow of information, yes.”

She added she was “certainly not trying to cover up… it wasn’t just me, there were other people party to the same information”.

Meanwhile, earlier in the hearing, the former executive said she agreed with Mr Beer that using words such as “exception” or “anomaly” to describe computer bugs had been an “attempt to control the narrative”.

The inquiry continues.

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Unions vow to fight ‘rejection’ of plan to save Tata Steel jobs

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Unions vow to fight 'rejection' of plan to save Tata Steel jobs

Unions have warned of a bitter fight ahead, saying their plans to avert thousands of job losses at Tata Steel have been rejected by the company.

Tata had announced in January a consultation on cutting up to 2,800 jobs in the UK, the majority of them at the country’s biggest steelworks in Port Talbot, South Wales.

It followed confirmation that the Indian-owned firm wanted to close down the blast furnaces at the plant and replace them with electric arc furnaces under a plan to reduce emissions and costs.

GMB, Unite and Community union representatives met Tata counterparts at a London hotel to discuss the way forward on Thursday morning.

But the GMB said Tata informed them that the blast furnaces would be closed by the end of September, describing the decision as an “unwelcome but not expected slap in the face”.

Tata Steel was yet to comment.

It has consistently argued that its £1.25bn investment would secure the future of UK steelmaking.

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“It would protect the majority of jobs, reduce the UK’s carbon emissions by five million tonnes a year and could kickstart a green industrial revolution in South Wales,” a spokesperson said.

However, its operations are now widely expected to face strike action.

Members of Community and the GMB are being balloted on whether to walk out over the plans.

Unite members have already voted in favour of industrial action.

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Why is green steel such a big issue?

The unions had urged Tata to abandon the government-supported switch to so-called green steel by signing up to an alternative plan that would raise productivity and protect jobs across the supply chain.

They argued that Tat’s proposals would rid the UK economy of its last remaining ‘virgin’ steelmaking facility and commit thousands of jobs to the scrap heap for no reason.

Community general secretary Roy Rickhuss said: “It’s incredibly disappointing that Tata have chosen to reject the multi-union plan, which is an ambitious and viable alternative to their destructive bad deal for steel.

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Port Talbot: Community ‘smashed to pieces’

“We do not accept the company’s assertion our plan was too expensive – in fact, it would have returned the company to profits, and the additional capital expenditure needed to make it a reality could have been funded by an additional £450m from the government – a drop in the water compared to what other European countries are investing in their domestic steel industries.

“Tata have made their decision, and our members will decide on our collective response.

“Tata made a proposal to negotiate a package with the unions to give us firm assurances on jobs and future investment, and we will consult our members on how we proceed

“We want to make one thing absolutely clear to the company: this isn’t over – not by a long shot. We will never stop fighting for our jobs, our industry, and our proud steel communities.”

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Supercar maker McLaren hit by £375m impairment charge

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Supercar maker McLaren hit by £375m impairment charge

McLaren Group, the British supercar maker and Formula One team-backer, has given lenders signs of an improvement in its financial performance even after a £375m impairment charge propelled it to a record loss last year.

Sky News has learnt that McLaren has told bondholders that it made losses of £873m in the 12 months ending 31 December.

The Woking-based company’s financial travails reflected an ongoing financial restructuring that was completed earlier this year.

Mumtalakat, Bahrain’s sovereign wealth fund, has taken full ownership of the group, and is now engaged in talks about technology partnerships which could lead to the sale of a minority equity stake in McLaren.

According to the results, which have not yet been released publicly, it recorded a £375m non-cash impairment charge to reflect asset writedowns relating to production problems.

In the first quarter of the 2024 financial year, however, McLaren reported its best quarter for nearly five years, with an underlying profit of £3m on revenues which rose by 52%.

Responding to an enquiry from Sky News, McLaren said its start to the year reflected a 28% increase in wholesale volumes with its 750S model sold out into 2025 and orders for the GTS ahead of expectations.

Paul Walsh, McLaren’s executive chairman, said: “These results demonstrate the strong fundamentals in our business, where demand for our iconic high-performance luxury sports cars exceeds supply, and where our outlook is improving following major transformation actions over the past year.

“We can look forward to a bright future with a simplified shareholder structure, a clean balance sheet and significant opportunities to forge partnerships to drive future growth.”

In an attempt to drive sales growth, McLaren has expanded its retail network with the opening dealerships in Australia, Japan and the brand’s largest showroom in Dubai.

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McLaren, whose road car models also include the Artura Spider, P1 and Senna, has seen some of its former shareholders taking warrants which would benefit from a future ‘liquidity event’ such as an initial public offering or sale of the company.

McLaren Racing, the division which directly houses the F1 and other racing operations, has its own external shareholders following a deal struck during the pandemic.

Simplifying its structure should pave the way for a technology partnership with an automotive original equipment manufacturer (OEM) in the coming years as McLaren transitions towards becoming a hybrid and electric vehicle company.

During the COVID-19 pandemic, the company was forced into a far-reaching restructuring that saw hundreds of jobs axed and substantial sums raised in equity and debt to repair its balance sheet.

Its finances became so strained that it repeatedly tapped Mumtalakat for new funding, as well as striking a sale-and-leaseback deal for its spectacular Surrey headquarters.

In 2021, it also sold McLaren Applied Technologies, which generates revenue from sales to corporate customers.

Founded in 1963 by Bruce McLaren, the group’s name is among the most famous in British motorsport.

During half a century of competing in F1, it has won the constructors’ championship eight times, while its drivers have included the likes of Mika Hakkinen, Lewis Hamilton, Alain Prost and Ayrton Senna.

In total, the team has 180 Grand Prix wins, three Indianapolis 500s and won the Le Mans 24 Hours on its debut.

The company saw its separate divisions reunited following the departure in 2017 of Ron Dennis, the veteran McLaren boss who had steered its F1 team through the most successful period in its history.

Mr Dennis offloaded his stake in a £275m deal following a bitter dispute with fellow shareholders.

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