Autumn Statement 2011: Children aged two to get free place at nursery - Telegraph
In his long-awaited Autumn Statement, the Chancellor will outline a £650 million scheme to provide free “early education” for about 40 per cent of two year-olds.
At present, all three and four-year-olds are entitled to 15 hours of nursery education for 38 weeks of the year.
The new scheme, which is designed to appeal to women voters who may have felt neglected by the Coalition, will extend the entitlement to about 260,000 two year-olds.
As well as helping mothers to return to work at least part-time, the move is aimed at narrowing Britain’s growing social divide.
The money, which will be distributed by local authorities, will be targeted mainly at disadvantaged families.
Following the summer’s riots, there were official warnings that the Government should intervene with very young children to set them on the right path through school.
Today’s announcement, which represents a doubling in state funding of nursery places for toddlers, amounts to an extension of a pilot scheme begun under Labour. Previously, it was thought that only 140,000 children would benefit from the scheme.
In his statement this afternoon, Mr Osborne will set out the growth strategy that the Coalition hopes will kick-start the beleaguered economy.
The Office of Budget Responsibility, the new independent financial watchdog, will also publish downgraded forecasts for economic growth and the public finances over the next two years, although it is unlikely to forecast a recession.
There may be some good news for Mr Osborne in the reduced cost of government borrowing, which should mean that the Chancellor is spending about £20 billion less on interest than expected. This could give him some flexibility to tackle an expected black hole in the public finances caused by a lack of economic growth and a higher benefits bill.
The centrepiece of the Autumn Statement will be a multi-billion pound package to boost infrastructure and help small and medium-sized businesses. There will also be modest help for consumers.
A 3p rise in fuel duty, due to be levied in January, is expected to be postponed and the threshold at which income tax is payable will rise by £630, a move that will save every basic and higher rate taxpayer about £120 a year.
The basic state pension is expected to rise in line with the 5.2 per cent increase in inflation from £102.15 to £107.46 next year. However, tax credit payments are likely to be frozen to fund a new £1 billion scheme to tackle youth unemployment.
The Daily Telegraph understands that Mr Osborne will extend by six months a “business rates holiday” for small firms at a cost of £210 million to the taxpayer. A new “Seed Enterprise Investment Scheme” will allow individuals investing up to £100,000 in new firms to receive income tax relief. Any profits made during the first year will also be exempted from capital gains tax.
The Exchequer will underwrite at least £20 billion worth of loans made by high street banks to small and medium-sized companies.
The new national infrastructure plan will support 500 projects including roads, railway lines and power stations over the next decade. Mr Osborne will announce £5 billion of new spending cuts to fund the schemes. Pension funds and wealthy foreign governments, including the Chinese, may also invest in the projects.
The Chancellor may also have to admit that his plans to tackle Britain’s debts may take at least a year longer than expected.
Speaking yesterday, Mr Osborne said: “We have to weather the current economic storm and lay foundations for a stronger economic future.”
Autumn Statement 2011: Children aged two to get free place at nursery
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