Jeremy Hunt has unveiled the contents of his first Budget in the House of Commons.
The Tory Chancellor has put a focus on prompting those who have left their jobs to return to the workforce and boosting business investment.
But his decision to widen the benefits sanctions regime was branded "completely wrong" by anti-poverty campaigners.
Pensions
Hunt announced that he is scrapping the lifetime allowance. All savings above £1.07 million in a pension pot had previously been taxed. The move was described as a “permanent tax cut” for the wealthy by Labour leader Keir Starmer.
The Chancellor also announced that there would be a review over whether the rise in state pension age should be brought forward. The state pension age is currently due to rise from 66 to 67 in 2028 and 68 by 2044. He said that it was part of his plan to get more people back into work.
Energy Bills
Hunt confirmed the UK Government’s energy price guarantee, which caps average household bills at £2,500, will be extended at its current level from April to June. It had been due to rise by £500 to £3,000 next month.
After shocking reports of struggling bill-payers being forced onto more-expensive energy prepayment meters, the Chancellor has acted to end the metered “premium” from July.
But Scots will still have to find an extra £67-a-month to pay their energy bills from April when the Government’s separate Energy Bill Support Scheme comes to an end.
Fuel
Fuel duty was frozen and a 5p cut to the rate will continue for a further 12 months. Hunt predicted a saving of £100 next year for motorists.
Cigarettes and alcohol
There was good news for beer drinkers as Hunt cut the duty allowance on draught-drinks. The Treasury said the move would make alcohol duty 11p lower on pulled pints compared to supermarket sales.
But Hunt was accused of hammering the Scotch whisky industry by slapping a 10 per cent increase on duty on spirits. The price of cigarettes will become more expensive after tobacco duty was increased.
Benefits
Hunt announced a clampdown on benefits claimants. He said: “Sanctions will be applied more rigorously to those who fail to meet strict work-search requirements or choose not to take up a reasonable job offer.”
He also said that he plans to abolish the work capability assessment.
Poverty Alliance director Peter Kelly said: “People in the UK believe in justice and compassion. But today’s Budget will strike fear into the hearts of millions. The Chancellor’s decision to widen the callous and ineffective sanctions regime is completely wrong.
"Our unjust economy simply doesn’t offer people the kind of secure, suitable employment that they need, and too many people simply can’t increase their working hours because of poor transport links, health and disability issues, caring commitments, or lack of affordable childcare."
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