On pensions, Johnson says the Budget makes the case for people to save, but the policy will not make a big difference in getting people back to work.

Scrapping the pensions lifetime allowance was unlikely to play a big part in increasing the numbers of people in work, he says, noting it is a very expensive policy.

"Even on OBR's, in my view optimistic, assumptions this will come in at £100,000 per job," he said.

Johnson goes onto talking about childcare. He says the added support presents a major change in the scope of the welfare state.

But, he said it is "highly uncertain" what impact the extension of free childcare will have on the labour market.

And such a significant move would bring "risks" for the childcare market if it was not properly funded.

Johnson says that taxes continue to rise to their highest ever level, which he says are much higher than in recent decades.

"Yet debt is barely falling", he adds. "A high debt level, high debt interest payments, and additions to debt make it hard to get it on a decisively downward path", he says.

He says tight spending plans and corporation tax being undone appear to meet the rule about debt falling later.

Paul Johnson, director of the IFS, begins his presentation by outlining his overall thoughts on the Budget.

He says the fiscal outlook facing the UK now is "slightly better" than in November but "still much worse than a year ago".

He says the two big ticket items in the Budget were the increased funding for childcare for one and two-year-olds, and the rise in corporation tax.

He says the Office for Budget Responsibility forecast is much more positive than the Bank of England's, noting that it is "slightly odd" that monetary and fiscal polices are based on different forecasts.

The Institute for Fiscal Studies (IFS) think tank's presentation reacting to the government's Budget announcements is about to start.

The politically independent economics-focused think tank publishes an analysis of the chancellor's proposals after the Budget every year.

Hunt says his choices will work - but will they revive growth?published at 10:31 Greenwich Mean Time 16 March 2023

10:31 GMT 16 March 2023

Nick Robinson
Presenter, Radio 4 Today

In our interview this morning, Jeremy Hunt insisted that his choices were all part of a plan that is already working. He defended the pension changes for the very rich – the most politically controversial element of his budget – as the only quick way to stop older, better-paid doctors from retiring early in order to avoid the current tax penalties they face for saving too much.

Taken alongside more help and pressure on those who’ve given up work because they’re sick, and support for childcare for those with the youngest kids, Hunt's plan is meant to ensure that businesses can find the workers they need without increasing immigration.

Yet the stats show that our economy will rely on a lot of workers coming here from abroad if it’s to grow at the rates needed to pay for higher wages, if we're to achieve better public services and even, one day, to cut record high levels of tax.

If there is no growth before the next election Jeremy Hunt will not be smiling

Nick Robinson
Presenter, Radio 4 Today

Every Budget is about choices – what you spend on and what you choose not to spend on. I pressed the chancellor this morning on why he was giving the richest a big pensions tax break; whether he was “betraying Brexit” by allowing more brickies, chippies and tilers to enter the country and keeping immigration at high pre-Brexit levels, and whether those currently considered too sick to work would now be forced into jobs or face a benefits cut.

I also asked whether his promises of more generous child care was more than a mere aspiration and, finally, why he hadn’t found more money to give public sector workers more of a pay rise so as to reduce the fall in their real wages.

After a flurry of interviews about the government's Budget announcements this morning, next we're going to be focusing on the Institute for Fiscal Studies' analysis of the government's plans - which is being streamed live here, external at 10:30 GMT.

We'll be bringing you the top lines on what the IFS - a think tank - makes of the Budget and their impact on the UK's economy, so stay with us.

Andy Verity
BBC Economics correspondent

The Resolution Foundation's analysis says the less gloomy economic forecasts which sees unemployment peak at only 4.4% contrasts with the last energy price shock on this scale in the 1970s, when the economy shrank by nearly 4%.

It finds a single parent of a one-year-old on the national living wage who wanted to boost their working hours from 25 to 35 hours a week would see their income after childcare costs fall under the current system by £370 as benefits are withdrawn. But with the new childcare help, it would rise by £700.

However, more broadly the typical household disposable income four years from now is expected to be lower after inflation than it was before the pandemic.

By then, tax raising measures like freezing the income tax thresholds will mean the government's collecting taxes worth 37.7% of the total value of the economy - a 70-year high and a rise since 2019 of £4,200 per household.

In our last post we heard from parents about what they thought of the changes to free childcare provision announced yesterday, but what exactly is changing?

For a start, there are changes to when working parents start getting 30 hours hours a week of free childcare in England:

• April 2024: Eligible two-year-olds will get 15 hours of free childcare per week
• September 2024: Eligible children between nine months and two years will get 15 hours
• September 2025: Eligible children between nine months and three years will get 30 hours

There is more, and you can get all the details here.

We've been hearing from some parents on their thoughts on yesterday's Budget.

The chancellor announced more funding for childcare in England, but some have expressed reservations about how long it take for the changes to come into effect.

Back to the Today programme now, where we also heard from Richard Hughes, the chair of the independent watchdog the Office for Budget Responsibility.

The BBC's Amol Rajan asked about the scheme which allows companies to offset expenses against tax. Hughes said: "It allows our businesses to invest, you get a 3% boost to investment in the three years it's in effect."

He went on to say that the scheme would mean some businesses bringing forward their investment plans.

The conversation moved on to public sector pay where Hughes explained the government had around £12 billion in reserves that could be used to give public sector workers a 3.5% raise, "but there are a lot of other pressures, so whether they use it for public sector pay or other matters is a choice for them".

What did we hear from Jeremy Hunt and Rachel Reeves' outings on news programmes this morning?

Chancellor Jeremy Hunt:

• Says taxes will be higher for a while, saying government spending during the pandemic and on the energy crisis are two reasons for this
• Hails the increase in free childcare funding in England, but is pushed on the delay to bringing the measure in
• On the increase in tax-free pension saving allowances for high earners, Hunt says it will boost NHS doctor numbers and reduce dependency on agency workers

Shadow chancellor Rachel Reeves:

• Says Labour welcomes the increase in free childcare, but criticises the delay to bring in the funding
• Vows that a future Labour government will reverse changes to pension savings that benefit high earners, but will keep it in place for doctors
• Says solving the skills shortage problem with migration is not a Labour priority

Energy bills, childcare, pensions, disability benefits, fuel duty - there's a lot to take in from yesterday's Budget, especially if you're trying to figure out what it means for your money.

Well, we've got you covered. Read a full guide here on how Jeremy Hunt's decisions will affect you and your family.

After more? Here are the key points at-a-glance.

Image source, Getty Images

We're still listening back to shadow chancellor Rachel Reeves. She's asked about tax and the rising cost of living.

During her interview, the BBC's Amol Rajan says people "feel skint" and asks Reeves if she supports the government's position on freezing tax thresholds.

She says the Tories "have become a party of high tax because they've become a party of low economic growth".

Rajan presses her to give an answer and asks her to stop talking about growth when he's asking about tax thresholds. Reeves eventually says her party wants taxes to be as low as possible, "but that can only happen with growth".

Pushed on whether it's right or wrong to freeze those thresholds, Reeves says what she wouldn't have done in the Budget is "give a tax cut to the richest 1%" – referring to the government's decision to scrap the abolition of the £1m tax-free cap on pension savings.

And that's it for Reeves' Today appearance, coming up soon we'll bring you that much-needed catch-up post so you know what both sides have said this morning.

We brought you Labour's shadow chancellor Rachel Reeves' comments on BBC Breakfast, but she also made an appearance on the Today programme a little earlier, where she spoke about migration and Labour's policies for economic growth.

She is asked whether she accepts that higher net migration is needed to fill job vacancies and boost growth.

Reeves responds by saying it would not be Labour's priority to "always address" the skills shortage problem in the UK by bringing in migrant workers.

"We would rather there was more support given to train up people who are already in Britain," she says, adding that one way Labour would do this would be by reforming the apprenticeship levy, external to help young people get into jobs.

As we mentioned a bit earlier, pensions changes announced yesterday will mean that the lifetime limit of £1m on tax-free pensions savings will be abolished.

In addition, the annual tax-free pension allowance will rise to £60,000. This policy is primarily directed at keeping doctors and consultants working in a stretched NHS, instead of retiring early.

Reacting to the policy announcements, cardiologist and chair of the British Medical Association (BMA) pensions committee, Dr Vishal Sharma, says that before the Budget announcement, "huge numbers" of doctors were planning on leaving the profession unless things changed, so the "decisive action" is "really welcome".

Speaking on BBC Breakfast, he says doctors were being advised by financial advisers that if they stayed working, they would end up being worse off. That, coupled with the "really big" pressures on the NHS, was making the decision to leave easier, he says.

Finally, Hunt is asked about the NHS pay deal, which we mentioned a bit earlier.

Robinson asks whether the pay offer being negotiated between unions and the government is likely to be more than the 3.5% that was proposed to pay review bodies in February.

Hunt doesn't directly respond, but says that if the government says it wants to do a different deal to that, then it will find a way to pay for it.

He adds, however, that the government must "pilot a very careful course to conclude the disputes but not to fuel inflation, that's the fundamental tight-rope that we have to walk".

Up next it's what seems to be the standout policy announced yesterday: childcare.

Robinson asks Hunt if he accepts that he's essentially laid out an ambition, rather than a plan, to which the chancellor says "not at all".

Hunt, again, talks about the £5bn-a-year investment which we outlined in our earlier reporting of his BBC Breakfast appearance. This time he adds that the plan is "fully costed" but doesn't explain how.

Hunt says the expansion of free childcare is a massive change for parents, but he's again asked about timings.

Robinson says the lengthy wait means a huge number of parents won't get to enjoy this policy, to which Hunt says there's a lot to get done due to how significant the changes are.

Next Hunt is asked about what Today presenter Nick Robinson refers to as the "hidden story of the Budget" - that of immigration being kept at very high, pre-Brexit levels, in the face of the promise that Brexit would cut immigration. Is this a betrayal to Brexit voters? Robinson asks.

Hunt says that there are no measures in the Budget that increase immigration. "In fact, I'm doing the opposite," he says. "We have a million vacancies up and down country, and I want to chart a course where we can fill vacancies without resorting to unlimited migration."

Robinson asks whether Hunt recognises that bricklayers, tilers, and others in similar industries which voted for Brexit will feel betrayed by the immigration levels, to which Hunt responds that people who voted for Brexit voted for "control on immigration, not no immigration".

He insists that people want an economic model that does not depend on unlimited, low-skilled migration, and that's what yesterday's Budget announced, referencing policies aiming to remove barriers to work for older people, the long-term sick and disabled people, among others.