In futher reaction to the energy price cap announcement this morning, the SNP is calling the government's decision to keep energy bills at the same level "truly pathetic".

In a statement, SNP economy spokesperson Stewart Hosie claims the government has "ample resources" to cut energy bills, and that families are being ripped off.

"With energy companies making record profits, and the wholesale price of gas falling, there is no excuse for this shameful Tory decision, which will hammer household incomes and push even more families into poverty, hardship and debt," Hosie says.

He adds that many families will be "worse off" as a result of the additional £400 energy bill support payment coming to an end.

The Liberal Democrats have criticised the government's extension of the Energy Price Guarantee, stating that it "does not go far enough".

"Instead of a sticking plaster for another three months, we need meaningful action now," the party's Treasury spokesperson Sarah Olney says.

She calls on the government to cut energy bills by £500 per household, making the case that such a move would make a "significant difference" to households.

"The government can afford to do it, they are choosing not to," she states.

"In three months time families will once again be facing a cliff edge of unaffordable heating bills."

Some of you might be wondering what is the Energy Price Guarantee, external we've been talking about.

Let's back track a bit first. Every three months the UK energy industry's regulator, Ofgem, sets a price cap for the maximum price suppliers can charge households per unit of energy on a standard - or default - tariff.

But after energy prices soared following Russia's invasion of Ukraine last year, the government brought in a Energy Price Guarantee which was lower than Ofgem's cap.

The Energy Price Guarantee stands at £2,500 for a typical household, though the amount you pay varies depending on how much energy you use.

Under the scheme, the government compensates energy providers for any extra energy bill costs households incur above the £2,500 average limit.

Robert Cuffe
Head of data

The main reasons for not working vary according to age.

Most of the 2.7 million people under 25 who aren't in the jobs market are students, according to the Office for National Statistics(ONS). The majority of them don't want a job

The main reasons that 3.5 million over-50s are out of the job market are illness and early retirement.

Almost nobody who has retired early says they want to return to work.

Among 25- to 49-year-olds, 1.1 million people don't work because of caring responsibilities (about a million of whom are women).

About 940,000 people in this age group are not working because of illness (more evenly split between men and women).

Read more here.

Expect to hear the phrase “back to work” a lot in Jeremy Hunt’s Budget. He wants to entice people who have left the workforce to rejoin.

There are currently around nine million “economically inactive” people in the UK. These are people aged between 16 and 64 who are not in work and are not seeking a job.

There are a few reasons why this number is so high. Many are students, some are full-time carers, others are suffering from long-term illnesses. And there are some over 50s who have chosen to retire early.

Meanwhile, there are 1.1 million job vacancies in the UK. While that number has been coming down, there are still 328,000 more vacancies than before the Covid pandemic struck in March 2020.

It is this gap that Hunt wants to fill.

Image source, PA Media

Ahead of today's Budget, Labour's shadow chancellor Rachel Reeves says Labour would secure the highest growth in the G7 were it in power, and states that today's Budget must show similar ambition.

"Britain has huge promise and potential. But 13 years of Tory economic mismanagement has left us lagging behind," Reeves writes in a tweet, external.

"Labour’s mission to secure the highest growth in the G7 will make us lead the pack again. This is the ambition we must see from the government in the Budget today."

Kevin Peachey
Cost of living correspondent

The extension of the current Energy Price Guarantee in England, Wales and Scotland had been widely expected and will benefit millions of people.

But there are questions over the thinking behind the policy.

It is universal help. In other words, everyone gets it, irrespective of how big an issue energy bills are in their home.

Critics say the £3bn extra it will cost would be better spent if targeted at those who really need it.

Gas bills expected to fall later in the yearpublished at 07:47 Greenwich Mean Time 15 March 2023

07:47 GMT 15 March 2023

Dharshini David
Economics Correspondent

Energy bills were rising even ahead of Russia’s invasion of Ukraine – but the premium due to that war has been eyewatering.

Analysts at Cornwall Insight monitor the implications of market movements for domestic bills, with a good track record. In early February 2022, it calculated that the dual fuel price cap imposed in the autumn for the average home would be around £2300. In the event, in the midst of war, that price cap nominally rose to £3549 in October – and then £4279 this January. In theory, then, the cap for the average home is almost £2000 higher than estimated prior to the war.

The government schemes sheltered us from much of that spike . But at a considerable cost to the public purse of many billions.

The good news is wholesale gas prices have dropped in such a way that the cost to the Treasury of this latest round has dropped sharply – and homeowners can still expect bills to fall later this year but perhaps not as far as which we’d hope.

More now on the news that the £2,500 average household cap on energy bills is set to continue for another three months, but what about the other support the government has been providing?

The additional £400 winter discount - which households have been receiving since October - will still come to an end in April.

The Treasury points out that while that will effectively see bills rising, it announced some extra support for those most in need in its Autumn Statement in November. The measures included:

• A further £900 cost of living payment for UK households on means-tested benefits
• A £300 cost of living payment for pensioner households across the UK
• A further £150 disability cost of living payment for people across the UK on non-means-tested disability benefits, to help with the additional costs they face.

The short answer is "better than they were".

Ahead of Jeremy Hunt’s Autumn Statement back in November, there was a lot of talk about a £30-50bn "black hole" in the public finances - though not everyone agreed the hole existed.

More recently there has been talk of "headroom" for government spending, as the government has borrowed less than was forecast this financial year

This is partly because wholesale energy prices have dropped faster than expected, meaning the help we've been getting with our energy bills has cost the government less.

Also, January brought another boost, with record receipts from self assessment tax returns.

But the government is still sounding cautious, stressing its target of reducing government debt and warning that "uncertainty and volatility" remain.

Image source, PA Media

A possible increase in fuel duty has been pencilled in for April 2023, and according to the Office for Budget Responsibility (OBR) it would see petrol prices rise by about 12p a litre.

But we don't know if this will happen. It's possible the chancellor could choose to freeze the duty – at the cost of about £6bn – or raise it by a different amount.

In theory, fuel duty should go up every year. However, in March last year Rishi Sunak - who was chancellor at the time - cut the tax by 5p, following concerns about rising prices.

The OBR assumes that 5p cut will end as planned in March, and it has factored in a scheduled rise of 7p on top of that.

Read more here.

Prime Minister Rishi Sunak says the decision to keep the Energy Price Guarantee in place for a further three months will not only "help hardworking families" with the cost of living, but will also help the government reach its target of halving inflation this year.

In a statement, he says: “We know people are worried about their bills rising in April, so to give people some peace of mind, we’re keeping the Energy Price Guarantee at its current level until the summer".

The Chancellor Jeremy Hunt says the extension of energy bills support into the summer "will bridge the gap and ease the pressure on families, while also helping to lower inflation".

Justifying the decision, he says in a statement that high energy bills are "one of the biggest worries for families".

Here's more on the government's decision to extend the Energy Price Guarantee for another three months now.

Over the colder months, the government has been limiting average household bills to £2,500 a year, plus a £400 winter discount.

Typical household energy bills had been due to rise to £3,000 a year from April, but instead the cap will be kept at £2,500 until the end of June.

The government has announced it will extend the Energy Price Guarantee at current levels - £2,500 - for a further three months.

Nick Eardley
Chief political correspondent

Things have changed a lot since the so-called mini-Budget under Kwasi Kwarteng.

The Treasury is hopeful that the economy is in a better place – and that inflation is coming down quickly.

Against that backdrop, the pitch from the chancellor today will be twofold: helping with immediate cost-of-living pressures and developing a plan for economic growth.

The childcare pledge covers both. It’s designed to help new parents with their costs – and encourage them back to work.

On cost of living, the government will also keep energy bill support for an extra three months and extend the fuel duty freeze for another year.

The growth plans will be closely watched. Many Tory MPs think the increase in corporation tax is a bad idea that will stifle growth.

To try and mitigate that, the chancellor will introduce tax breaks for companies investing in the UK.

The government wants to persuade us all its plan to stabilise the economy is working – and will soon deliver growth.

Labour say ministers need to move beyond sticking plasters and show more ambition.

Image source, PA Media

The chancellor is reportedly considering expanding free childcare to under two year olds in England as part of the spring budget.

Currently, three and four year olds get at least 15 hours of free childcare per week, for 38 weeks of the year in England. This increases to 30 hours for working parents, provided their income meets the eligibility criteria.

Two-year-olds in England are also eligible for 15 hours of free childcare for those whose parents claim certain benefits.

But the government is expected to expand the 30-hours a week entitlement to children aged nine months to three years.

Other measures to help families struggling with the cost of childcare include reducing the number of free hours for two-year-olds, an offer of 10 free hours for disadvantaged one-year-olds, and adjusting the ratios for childcare providers to allow adults to look after more children.

Will the government go ahead with a hike in corporation tax?

This is a tax is paid by UK companies and foreign firms with offices here. It is charged as a percentage of the profits they make.

At the moment, the rate is 19% but that will rise to 25% in April.

It was Rishi Sunak who announced the planned increase back in 2021 when he was chancellor and it looks likely that Jeremy Hunt will follow through on the pledge – despite pushback from some Tory MPs who think it will put companies off from investing in the UK.

At 19%, the UK currently has the lowest corporation tax rate among G7 nations. When it rises, it will still be the lowest but only marginally. France is the next lowest at 25.8%.

Recently, Pascal Soriot, the boss of pharmaceutical giant AstraZeneca, said it had switched plans to build a big manufacturing plant in the North West of England to Ireland, because of the rise in corporation tax which he called “discouraging”.

But Hunt is expected to announce tax breaks for businesses who invest in the UK.

Nick Eardley
Chief political correspondent

The chancellor will announce tax breaks for businesses later – in an attempt to mitigate the impact of the corporation tax increase and the end of other support schemes.

It’s expected businesses will be able to offset investments in the UK to reduce their corporation tax bill.

Some Conservative MPs have raised concerns the plans to increase corporation tax will stifle growth. But the chancellor will confirm today that the increase will go ahead.

The chancellor has told Tory MPs in private that the effective rate of corporation tax is key – not just the headline rate.

Annual food inflation hit 16.7% in January, the Office for National Statistics has said.

Basics such as milk, olive oil, cheese and eggs saw the largest increases but costs for sugar, jam, honey, syrups, chocolate and soft drinks and juices also jumped.

Read more here.