Budget: What to expect from Jeremy Hunt's 'back-to-work' statement

A key component of Jeremy Hunt’s plans is tackling economic inactivity as employment numbers have languished far below their pre-pandemic levels, harming the UK’s already-struggling economy.

Here’s what we can expect this week.

What is going to be in the ‘back-to-work Budget’?

On Wednesday, Mr Hunt is expected to announce the axing of the system used to assess eligibility for sickness benefits in what he is billing his “back-to-work Budget”.

Jeremy Hunt's Budget will be announced next week (Image: PA)

According to the Treasury, this will mean claimants can continue to receive the payments after they return to employment.

The biggest reform to the welfare system in a decade will give them the opportunity to start work without fear of being reassessed and losing their benefits.

It’s expected that the process will be replaced with one that asks claimants to demonstrate what job they might be able to take, prompting disability equality charity Scope to warn that “disabled people shouldn’t be forced into unsuitable work”.

Jeremy Hunt is also believed to set out plans to encourage over-50s to return to work through an expansion of skills training.

The Resolution Foundation think tank recently said that while three-quarters of the rise in economic inactivity, up by 830,000 between 2019 and 2022, was concentrated among those aged 50 and over, efforts to get pandemic retirees to “unretire” were unlikely to be successful.

It’s also expected that the Chancellor will detail an overhaul of the Universal Credit system aimed at encouraging claimants to move into work or increase the hours they complete.

Jeremy Hunt expected to reveal rise in maximum Universal Credit childcare allowance

Mr Hunt has faced pressure to act on childcare after it was shown to be among the most expensive in the world.

In the upcoming Budget, he is expected to reveal a rise in the maximum Universal Credit childcare allowance by several hundred pounds, the Treasury said, but the exact amount was not provided.

Hunt has faced pressure to act on childcare (Image: PA)

The allowance has been frozen at £646-a-month per child for years.

Rather than paying parents on Universal Credit childcare support in arrears, the Government will start paying them upfront.

This is thought to help those struggling to take on a job or getting into debt under the current system due to the high upfront costs.

Other measures are said to include stricter requirements for claimants who care for children to search for work or complete more hours.

The minimum earnings threshold needed to avoid regular meetings with a work coach from the equivalent of 15 to 18 hours a week is expected to see an increase and the partner of a working person will also need to look for work.

An increase of sanctions is also believed to be on the cards for claimants who don’t look for or begin a job.

What did Hunt say about the Budget?

Mr Hunt said: “For many people, there are barriers preventing them from moving into work – lack of skills, a disability or health condition, or having been out of the jobs market for an extended period of time.

“I want this back-to-work Budget to break down these barriers and help people find jobs that are right for them.

“We need to plug the skills gaps and give people the qualifications, support and incentives they need to get into work. Through this plan, we can address labour shortages, bring down inflation, and put Britain back on a path to growth.”

Rishi Sunak tasked Mel Stride with reviewing issues holding back workforce participation in the autumn (Image: PA)

Work and Pensions Secretary Mel Stride was tasked by Rishi Sunak with reviewing issues holding back workforce participation in the autumn after more than half a million workers vanished from the UK workforce since the outbreak of Covid.

On the day of the Budget, his findings are expected to be published in a white paper.

Syma Cullasy-Aldridge, chief campaigns director at the Confederation of British Industry, said: “As firms struggle to fill more than one million job vacancies in the economy, it’s good to see the Government finding ways to support people back into the workplace.”

She said it was “absolutely right” that childcare support for those on universal credit will be paid upfront, but called for a review into childcare “to ensure it works for everyone”, as well as reform of the apprenticeship levy to help over-50s back into work.

The TUC said changes such as greater childcare support are “long overdue” and welcomed “an end to assessments that cause anxiety instead of helping people achieve their aspirations”.

However, the union’s general secretary Paul Nowak said proposals to increase the use of sanctions are “worrying”.

Scope’s director of strategy James Taylor said scrapping the work capability assessment “is the minimum change needed to even begin improving a welfare system that regularly fails disabled people”.

He added: “To be successful these proposals must lead to a more person-centred system that offers specialist, tailored and flexible back to work support.

“Those that want to work should be supported. But for some, that’s not an option and disabled people shouldn’t be forced into unsuitable work.”

Labour’s shadow work and pension’s secretary Jonathan Ashworth said: “Over recent months, Labour has outlined welfare reforms to get Britain back to work and now the Tories are following our lead.”