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Chancellor's Budget aimed at hard-pressed families

By Western Morning News  |  Posted: March 20, 2013

By GRAEME DEMIANYK

George Osborne

George Osborne

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More than 55,000 families in Devon and Cornwall could get up to £6,000 of state help to pay for childcare, George Osborne will confirm in a Budget aimed at hard-pressed families today.

The Chancellor is also expected to scrap September's 3p fuel duty rise against warnings motorists in rural areas such as the Westcountry are feeling the squeeze in particular.

And in a bid to kick-start the flagging economy, Mr Osborne is to demand an extra £2.5 billion of Whitehall cuts to invest in big road and building projects.

Business leaders in the region are hoping for a commitment of cash to widen the A303 between London and the South West, where jams undermine business and tourism.

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Some MPs are also expecting the beer duty escalator – which will add 2% above inflation to the cost of alcohol – to be scrapped against warnings it is forcing the closure of pubs, especially in rural areas.

Moves to slash the spiralling cost of childcare will see working parents earning up to £150,000 each get tax breaks worth as much as £1,200 a year per child.

It will only apply to couples where both parents are working, or single parents who are employed. The scheme will be phased in from 2015 – the year of the general election.

Estimates suggest 24,750 families could benefit in Devon, 18,258 in Cornwall and the Isles of Scilly, 9,423 in Plymouth and 4,431 in Torbay.

Stephen Gilbert, Liberal Democrat MP for St Austell and Newquay, said the region has among the highest childcare costs in the country.

He said: "This new scheme will help ensure that all parents can afford to work if they want to, which is essential to creating a stronger economy and a fairer society for the next generation."

Health, schools, overseas aid and HM Revenue and Customs will be protected from the cuts, and councils and police budgets will be protected for the first year.

But other Whitehall departments – such as Defra, the countryside and farming department – will be told to find 1% savings on their day-to-day budgets for each of two years.

MPs also want a 5p fuel duty rebate available to island communities including the Scillies extended to rural areas on the mainland.

Anne McIntosh MP, chairman of the rural affairs select committee of MPs, said she was "confident" that Britain can satisfy state aid rules on fuel subsidies.

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