Jeremy Hunt defends speed of his childcare budget giveaway as ‘biggest transformation in my lifetime’
Chancellor Jeremy Hunt has defended the speed of the rollout for his budget offer of free childcare for working parents, describing it as the “biggest transformation in childcare in my lifetime”.
The new childcare package will see working families in England having access to 30 hours of free childcare per week for children aged between nine months and four years old, where all adults in the household work at least 16 hours.
The policy had previously only applied to the parents of three and four-year-olds.
But the scheme will not come in until 2024, and the proposed start date could fall after the next general election.
Budget news – latest: Chancellor Jeremy Hunt speaks to Sky News
Challenged by Sky News’ Jayne Secker on the speed of the measures, Mr Hunt defended his plans, saying: “This is the biggest transformation in childcare in my lifetime.
“It’s a huge change and we are going to need thousands more nurseries, thousands more schools offering provision they don’t currently offer, thousands more childminders.
“We are going as fast as we can to get the supply in the market to expand.”
The offer of free childcare for working parents will be available to those with two-year-olds from April 2024, covering around half a million parents, but it will initially be limited to 15 hours.
From September 2024, the 15-hour offer will be extended to children from nine months, helping a total of nearly a million parents, and the full 30-hour offer to all under-fives will come in from September 2025.
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The chancellor said it was “the right thing to do because we have one of the most expensive childcare systems in the world”.
He added: “We know it is something that is a huge worry, for women in particular, that they have this cliff-edge when maternity leave ends after nine months, no help until the child turns three and that can often be career ending.
“So I think it is the right thing to do for many women, to introduce these reforms and we are introducing them as quickly as we can because we want to remove those barriers to work.”
Labour’s shadow chancellor Rachel Reeves welcomed the changes, telling Sky News: “As a working mum myself, I know how important it is to have affordable, flexible childcare to meet the needs of working parents.”
But she added: “What I would say is what has taken the government so long?
“Thirteen years now of this Conservative government and only at this stage are they beginning to recognise how important childcare is both for children’s development but also crucially for our successes in the economy.”
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Labour to reverse ‘tax cut for rich’ pension reform if it wins next election
Mr Hunt also defended his planned changes to pensions, namely scrapping the lifetime pensions allowance, which will get rid of the £1m limit, after which workers pay tax on their pot.
Labour called it “a Tory tax cut for the rich”, saying it would only benefit the top 1% of earners, and said they would oppose it in Parliament, pushing for a vote on Tuesday.
But the chancellor insisted it would tackle the “big problem” of doctors leaving the NHS and in turn help reduce record-high waiting lists.
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Mhari Aurora explains all you need to know.
Mr Hunt also insisted the budget was helping everyone with the cost of living crisis – pointing to the freeze in the energy price cap at £2,500 – while also tackling “the long-term issues facing the economy… removing the barriers that stop people working”.
Ms Reeves accused the government of stealing from its playbook, saying Labour had called for the freeze of bills, changes to pre-payment meter charges and an improved childcare package.
But while she welcomed the adoption of measures her party backed, she told Sky News: “This was supposed to be a budget for growth yesterday. Yet the Office for Budget Responsibility downgraded the growth forecasts.
“And it is growth that we desperately need in our economy to lift living standards, to keep taxes low and to have the money that we need for our public services.”
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Reeves welcomes ‘borrowing’ of Labour policy
Both the SNP and Liberal Democrats said the energy measures did not go far enough, calling for the government to cut bills for households.
MPs will continue to debate the budget in the Commons this afternoon and there could be disquiet from Mr Hunt’s own backbenchers after he decided to keep the planned rise in corporation tax up from 19% to 25% – and did not offer further tax cuts as some Tory MPs demanded.
Former government ministers Priti Patel, Jacob Rees-Mogg and Ranil Jayawardena all called on the chancellor to review his tax decisions in the coming months.
Martin Lewis says motorists who were mis-sold car finance are likely to receive “hundreds, not thousands of pounds” – with regulators launching a consultation on a new compensation scheme.
The founder of MoneySavingExpert.com believes it is “very likely” that about 40% of Britons who entered personal contact purchase or hire purchase agreements between 2007 and 2021 will be eligible for payouts.
“Discretionary commission arrangements” saw brokers and dealers charge higher levels of interest so they could receive more commission, without telling consumers.
Pics: PA
Speaking to Sky News Radio’s Faye Rowlands, Lewis said: “Very rarely will it be thousands of pounds unless you have more than one car finance deal.
“So up to about a maximum of £950 per car finance deal where you are due compensation.”
Lewis explained that consumers who believe they may have been affected should check whether they had a discretionary commission arrangement by writing to their car finance company.
However, the personal finance guru warned against using a claims firm.
“They’re hardly going to do anything for you and you might get the money paid to you automatically anyway, in which case you’re giving them 30% for nothing,” he added.
Read more: How to tell if you’ve been mis-sold car finance
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Who’s eligible for payout after car finance scandal?
Yesterday, the Financial Conduct Authority said its review of the past use of motor finance “has shown that many firms were not complying with the law or our disclosure rules that were in force when they sold loans to consumers”.
The FCA’s statement added that those affected “should be appropriately compensated in an orderly, consistent and efficient way”.
Lewis told Sky News that the consultation will launch in October – and will take six weeks.
“We expect payouts to come in 2026, assuming this will happen and it’s very likely to happen,” he said.
“As for exactly how will work, it hasn’t decided yet. Firms will have to contact people, although there is an issue about them having destroyed some of the data for older claims.”
He believes claims will either be paid automatically – or affected consumers will need to opt in and apply to get compensation back.
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The FCA estimates the cost of any scheme – including compensation and administrative costs – to be no lower than £9bn.
But in a video on X, Lewis said that millions of people are likely to be due a share of up to £18bn.
The regulator’s announcement comes after the Supreme Court ruled on a separate, but similar, case on Friday.
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