Budget 2023 – live updates: Pension lifetime allowance and childcare changes at a glance

The universal credit sanctions scheme is to be tightened in a new push by Jeremy Hunt to get hundreds of thousands of people into work, prompting concern among campaigners.

The requirement for benefits claimants who are lead carers of children to search for work are also to be strengthened, as part of a raft of measures the chancellor will announce on Wednesday in what he has branded his “back-to-work Budget”.

In an overhaul the government claimed was “the biggest reform to the welfare system in a decade”, the Work Capability Assessment – described as flawed by campaigners – is also to be axed.

But it comes as new Office for National Statistics figures showed the number of people off work in the UK due to long-term sickness is the highest since records began in 1993.

Jeremy Hunt has been urged to invest in public sector pay in the Budget, as new research by the Trades Congress Union (TUC) suggested nearly two in five workers are actively considering leave their profession – with a third citing low pay as a reason.

One in six public sector workers said they were skipping meals and one in 14 is using a food bank, according to the TUC – which warned that public services are facing a “mass exodus” of workers unless the current wave of pay disputes is resolved.

Unison union assistant general secretary Jon Richards said: “Decent public services are the bedrock of any society but they can’t exist without people to run them. It doesn’t take a rocket scientist to fathom that pay is key to keeping and attracting a motivated workforce.

“The government must invest in pay in the Budget so schools, hospitals, town halls and care homes can better compete with wages in the private sector. That would help boost staffing levels for everyone’s benefit.”

Vacancies across the UK have fallen for the eighth month in a row as firms hold back on hiring amid woes in the wider economy, official figures have shown as Jeremy Hunt prepares to unveil his “back-to-work” Budget.

The Office for National Statistics revealed a 51,000 drop in the number of job vacancies to 1.12 million in the three months to February, while the redundancy rate edged higher, which it said “reflects uncertainty across industries, as survey respondents continue to cite economic pressures as a factor in holding back on recruitment”.

Britain’s unemployment rate remained unchanged at 3.7 per cent in the three months to January, but the drop in vacancies signalled cracks in the jobs market as economic uncertainty weighs on companies.

The figures also showed there were 220,000 days lost to strike action in January, down from 822,000 in December, with schools the hardest hit.

Jeremy Hunt earlier vowed to ”go further to bear down on inflation” in Wednesday’s Budget.

“The jobs market remains strong, but inflation remains too high,” the chancellor said this morning. “To help people's wages go further, we need to stick to our plan to halve inflation this year.

“Tomorrow at the Budget, I will set out how we will go further to bear down on inflation, reduce debt and grow the economy, including by helping more people back into work.”

Speaking to Sky’s Sophy Ridge on Sunday show, the chancellor was told that he was running the economy “like Jeremy from accounts”.

He replied that “Jeremy the chancellor will be responsible with public finances, I make absolutely no apology for that”, adding: “What you will also see on Wednesday is that we have a plan to tackle the biggest problems we face as a country.”

Jeremy Hunt is expected to cancel the planned £500 hike in the government’s ceiling for energy bill support which was due to come into force next month.

For the average household that means bills will stay at around £2,500, instead of going up to £3,000 as was previously announced.

On fuel duty, some Tory backbenchers have urged the chancellor to act to support motorists facing a 12p-per-litre hike in fuel duty in March. A 23 per cent increase in the duty is pencilled in for this month, but chancellors have repeatedly frozen the levy in the past. Mr Hunt has so far not said what he will do.

Action is expected on prepayment meters with the Chancellor set to end the so-called “prepayment premium” from July – which the Treasury expects will save more than four million households £45 a year on their energy bills.

Struggling public swimming pools will also be handed assistance to cope with their rising energy bills, with a £63m one-off pot to be created. Most of the money will be earmarked for leisure centres to invest in moving towards renewable energy forms.

Jeremy Hunt is known to be considering raising the £40,000 cap on tax-free annual pensions contributions – and could reportedly hike it to £60,000.

Mr Hunt’s team has also looked at a possible increase in the lifetime allowance (LTA) on pension savings, another tweak Mr Hunt’s team has looked at. The tax-free lifetime amount could rise from £1.07m to as much as £1.8m, according to reports.

Meanwhile, other reports suggest that the UK state pension age could rise to 68 sooner than expected.

Jeremy Hunt will pledge to tackle labour shortages and get people back to work when he delivers his Budget.

The chancellor is also expected to reference the “difficult decisions” taken last November to stabilise the markets, following the short-lived premiership of Liz Truss, as he outlines a plan he hopes can deliver “sustainable” growth.

“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 ... all whilst making our country one of the most prosperous in the world.”

Mr Hunt will promise a growth plan that will remove “the obstacles that stop businesses investing” while also “tackling the labour shortages that stop them recruiting” and “breaking down the barriers that stop people working”.

The chancellor will unveil his Budget today as the country battles a cost-of-living crisis and a stalling economy.

Jeremy Hunt’s fiscal package comes in the wake of the autumn statement last November, which saw the chancellor hike taxes as he and prime minister Rishi Sunak sought to restore UK financial credibility after Liz Truss’s short-lived premiership.

With the UK narrowly avoiding a recession since and the latest economic figures giving reason for optimism, the chancellor is expected to focus his Budget on growth measures as he seeks to reignite the economy and encourage people back to the workforce after the Covid-19 pandemic.

Here is what has been briefed already and what we can likely expect in Mr Hunt’s first Budget since being appointed by Ms Truss last year.

Patrick Daly reports.