London Daily

Focus on the big picture.
Saturday, May 31, 2025

Budget: Jeremy Hunt to expand free childcare to one and two-year-olds

Budget: Jeremy Hunt to expand free childcare to one and two-year-olds

Free childcare for working parents in England is expected to be expanded in Wednesday's Budget to cover one and two-year-olds.

Currently, working parents with three and four-year-olds are eligible for 30 hours of free childcare per week.

The plans are part of a government drive to encourage more people back to work to boost economic growth.

Equivalent funding is expected to be announced for Wales, Scotland and Northern Ireland.

The Treasury is not formally commenting ahead of the Budget.

However it has not denied suggestions, first reported by the Guardian, that the hourly rate paid to childcare providers by the government will also be increased - and that local authorities will be given funding to start setting up wraparound childcare provision in schools from September 2024.

The BBC has been told the current scheme for three and four-year-olds will be extended to cover one and two-year-olds.

Childcare costs in the UK are among the highest in the world and the government has been under pressure, including from some of its own MPs, to provide more help for parents.

The rising cost of childcare has been widely seen as a deterrent for some parents to go back to work or work full time.

The extension of free childcare has been lobbied for by business group the CBI, which calculates that while it will cost several billion pounds, it could raise up to £10bn in further revenue by increasing the number of parents able to work.

The Guardian also reported that the government could introduce changes to the staff-to-child ratios for two-year-olds in childcare - moving from one carer for every four children to 1:5 to align with Scotland, which the Treasury also has not denied.

Supporters of the idea say it could help cut costs for parents.

However, the Early Years Alliance, which represents around 14,000 childcare providers in England, said relaxing ratios risked "severely compromising the safety and quality of care" and putting more pressure on the workforce during "a severe staffing crisis".

The organisation's chief executive, Neil Leitch, said reports of more spending on the sector "appear positive" but "the devil is in the detail".

He said the government must ensure funding meets the sharply rising costs of delivering places.


Meanwhile, the government will also confirm that energy bill support will continue at current levels for a further three months.

Currently, the government limits the energy bill for a typical household to £2,500 a year but this had been due to rise to £3,000 on 1 April.

The chancellor is expected to resist calls from some Tory MPs to cut taxes.

With prices continuing to rise, he has privately been telling them: "The best tax cut right now is a cut in inflation."

A planned rise in corporation tax, from 19% to 25%, is due to come in from 1 April.

However, under plans to be announced in the Budget, businesses will be able to mitigate this increase with a new system of capital allowances.

Other measures expected to be announced by Chancellor Jeremy Hunt include:

*  Increasing the total amount people can accumulate in their pension savings before paying extra tax

*  Twelve new investment zones across the UK, with tax incentives and funding to improve skills and liberalise the planning system

*  Charges for people with prepayment meters will be brought in line with those for direct debit customers, saving them £45 a year on their energy bills from July.

No further cash is expected to be made available for public sector pay, but cabinet figures have expressed confidence that many of the industrial disputes are close to being settled.

In the meantime, strikes over pay are continuing across a range of sectors, with junior doctors, civil servants and teachers among those walking out on Wednesday.

In his Budget speech, Mr Hunt will refer to the "difficult decisions" taken by the government last autumn "to deliver stability and sound money", following the economic turbulence caused by Liz Truss's tax-cutting agenda.

"Today, we deliver the next part of our plan - a Budget for growth," he is expected to say.

"Not just growth from emerging out of a downturn.

"But long-term, sustainable, healthy growth that pays for our NHS and schools, finds good jobs for young people, provides a safety net for older people."

The Treasury said a drive to get hundreds of thousands more people into work would focus on disabled people and those with long-term health conditions, parents, the over-50s and people on universal credit.

During the pandemic all major countries saw their workforce shrink. But while most leading economies have since recovered, the UK still has about 400,000 more people not working than in December 2019.

Labour said the Budget was "an opportunity for the government to get us off their path of managed decline".

Shadow chancellor Rachel Reeves said: "With 13 years of economic mismanagement and sticking plaster politics leaving us lagging behind, what we need to see on Wednesday is some real ambition from the government."

The government has already announced that the Budget will include more help with childcare costs for families on universal credit.

The current £646-a-month per child cap on support for universal credit claimants is expected to be raised by several hundred pounds. They will also receive the funding upfront, instead of having to claim it back.

At the moment, parents in England with children who are three to four years old may be eligible for 30 hours of free childcare.

Newsletter

Related Articles

0:00
0:00
Close
Satirical Sketch Sparks Political Spouse Feud in South Korea
Indonesia Quarry Collapse Leaves Multiple Dead and Missing
South Korean Election Video Pulled Amid Misogyny Outcry
Asian Economies Shift Away from US Dollar Amid Trade Tensions
Netflix Investigates Allegations of On-Set Mistreatment in K-Drama Production
US Defence Chief Reaffirms Strong Ties with Singapore Amid Regional Tensions
Vietnam Faces Strategic Dilemma Over China's Mekong River Projects
Malaysia's First AI Preacher Sparks Debate on Islamic Principles
White House Press Secretary Criticizes Harvard Funding, Advocates for Vocational Training
France to Implement Nationwide Smoking Ban in Outdoor Spaces Frequented by Children
Meta and Anduril Collaborate on AI-Driven Military Augmented Reality Systems
Russia's Fossil Fuel Revenues Approach €900 Billion Since Ukraine Invasion
U.S. Justice Department Reduces American Bar Association's Role in Judicial Nominations
U.S. Department of Energy Unveils 'Doudna' Supercomputer to Advance AI Research
U.S. SEC Dismisses Lawsuit Against Binance Amid Regulatory Shift
Alcohol Industry Faces Increased Scrutiny Amid Health Concerns
Italy Faces Population Decline Amid Youth Emigration
U.S. Goods Imports Plunge Nearly 20% Amid Tariff Disruptions
OpenAI Faces Competition from Cheaper AI Rivals
Foreign Tax Provision in U.S. Budget Bill Alarms Investors
Trump Accuses China of Violating Trade Agreement
Gerry Adams Wins Libel Case Against BBC
Russia Accuses Serbia of Supplying Arms to Ukraine
EU Central Bank Pushes to Replace US Dollar with Euro as World’s Main Currency
Chinese Woman Dies After Being Forced to Visit Bank Despite Critical Illness
President Trump Grants Full Pardons to Reality TV Stars Todd and Julie Chrisley
Texas Enacts App Store Accountability Act Mandating Age Verification
U.S. Health Secretary Ends Select COVID-19 Vaccine Recommendations
Vatican Calls for Sustainable Tourism in 2025 Message
Trump Warns Putin Is 'Playing with Fire' Amid Escalating Ukraine Conflict
India and Pakistan Engage Trump-Linked Lobbyists to Influence U.S. Policy
U.S. Halts New Student Visa Interviews Amid Enhanced Security Measures
Trump Administration Cancels $100 Million in Federal Contracts with Harvard
SpaceX Starship Test Flight Ends in Failure, Mars Mission Timeline Uncertain
King Charles Affirms Canadian Sovereignty Amid U.S. Statehood Pressure
Trump Threatens 25% Tariff on iPhones Amid Dispute with Apple CEO
Putin's Helicopter Reportedly Targeted by Ukrainian Drones
Liverpool Car Ramming Incident Leaves Multiple Injured
Australia Faces Immigration Debate Following Labor Party Victory
Iranian Revolutionary Guard Founder Warns Against Trusting Regime in Nuclear Talks
Macron Dismisses Viral Video of Wife's Gesture as Playful Banter
Cleveland Clinic Study Questions Effectiveness of Recent Flu Vaccine
Netanyahu Accuses Starmer of Siding with Hamas
Junior Doctors Threaten Strike Over 4% Pay Offer
Labour MPs Urge Chancellor to Tax Wealthy Over Cutting Welfare
Publication of UK Child Poverty Strategy Delayed Until Autumn
France Detains UK Fishing Vessel Amid Post-Brexit Tensions
Calls Grow to Resume Syrian Asylum Claims in UK
Nigel Farage Pledges to Reinstate Winter Fuel Payments
Boris and Carrie Johnson Welcome Daughter Poppy
×