- Scroll down to meet the families grappling with Burnham's 'is that it?' Budget
John Healey faced a backlash last night after an underwhelming Budget that left families facing a fall in living standards.
The Chancellor pushed up taxes to a record high and poured billions of pounds more into benefits.
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Chancellor → scroll → benefits
But he ducked tough decisions on increasing defence spending and curbing the runaway welfare budget.
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he → duck → budget
And a package of measures designed to ease the cost of living was so modest it was last night dubbed the 'Gherkin Budget' after Mr Healey boasted of tariff cuts that will shave a few pence off a jar of pickled cucumbers.
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that → design → cucumbers
In a withering assessment, Kemi Badenoch said the Budget 'does not come close to meeting the moment'.
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Budget → say → moment
The Tory leader said: 'We have overspent, over-borrowed, over-taxed and are drowning in an out-of-control welfare system.'
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We → say → system
She added: 'Most people listening to this Budget will be thinking to themselves, is that it?
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people → add → themselves
The Prime Minister came in promising to reverse 40 years of neo-liberalism.
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Minister → come → liberalism
Instead, we got 4p off gherkins.'
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we → get → gherkins
The Office for Budget Responsibility (OBR) downgraded its anaemic growth forecast for next year to just 1 per cent.
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Office → downgrade → cent
But experts fear that the situation could get worse within days, as speculation mounts that Donald Trump is planning new bombing raids on Iran after next week's midterm elections in the US, which would drive oil prices higher still.
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which → fear → prices
In his first Budget as Labour Chancellor, Mr Healey:
- Raised taxes on savers, landlords and banks as he continued the Labour Government's record of pushing up the tax burden to new highs at every Budget;
- Offered a £100 rebate to 20million homes in council tax bands A to D to help offset soaring energy bills this winter;
- Published official forecasts showing that inflation and government borrowing are both on course to rise;
- Signed off an extra £5billion a year in welfare spending after failing to bring forward reforms;
- Delayed a planned 6p-a-litre increase in fuel duty until July;
- Faced criticism after he set a target of spending three per cent of GDP on defence by the end of the decade – but failed to say how it would be funded;
- Bowed to pressure to scrap Rachel Reeves's plan to cut the tax-free cash Isa limit.
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it → raise → limit
Mrs Badenoch accused Labour of kicking difficult decisions into the long grass 'because the Prime Minister wants to keep the option of an early election open – putting his party's interests before the country'.
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Minister → accuse → country
Some Labour MPs were also speculating last night that the PM is preparing a snap election after weak growth forecasts for next year were downgraded again.
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forecasts → speculate → year
The Prime Minister said he could 'rule out calling a general election in the next 12 months'.
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he → say → months
He insisted that the Budget did contain some 'bold' measures, including the council tax rebate to help offset energy bills, even though it is likely to be swallowed up by a jump of several hundred pounds in the energy price cap come January.
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it → insist → cap
The PM said the package would make a 'significant' difference 'if you add it all up'.
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you → say → it
Mr Healey described the package as a 'Budget for working people'.
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Healey → describe → people
He said the measures would give people 'breathing space' from an energy crisis triggered by a war 'we did not want'.
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we → say → war
The Chancellor insisted he would 'bring down the welfare bill' in future.
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he → insist → future
But he said it would be done 'in a Labour way'.
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it → say → way
He said he was committed to 'fiscal discipline' and pencilled in tough spending limits for the final years of the decade.
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he → say → decade
Economists said unprotected departments such as the Home Office and transport could face real terms cuts of 2.6 per cent a year.
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departments → say → cent
But he gave no indication of how the savings would be achieved.
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savings → give → indication
Economist Paul Johnson, former head of the Institute for Fiscal Studies, said: 'The numbers add up because the numbers were made up.
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numbers → say → Studies
If business and the country need some certainty and stability to help with growth, this Budget did not provide it.'
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Budget → need → it
The OBR warned that living standards are set to fall in the next 12 months.
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standards → warn → months
The watchdog's forecast for real household disposable income per person is now £420 lower than two years ago and is not predicted to recover until April 2029.
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forecast → predict → April
OBR economist David Miles said Britain was facing a 'pretty grim picture' for living standards, with real incomes no better than they were before the pandemic.
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they → say → pandemic
The centre-Left Resolution Foundation think-tank described the outlook for living standards as 'dire'.
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tank → describe → standards
Chief executive Ruth Curtice said the Chancellor had 'spread the jam thin' and warned that his decision to cut the buffer against breaking his own fiscal rules meant he now 'doesn't have enough to survive one bad roll of the dice'.
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he → say → dice
The Chancellor said it was right to use some of the so-called headroom to help soften the impact of the 'global economic storm' caused by the Iran war.
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it → say → war
But he faced criticism on all sides for his timid approach.
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he → face → approach
Rain Newton-Smith, CBI chief executive, said: 'This Budget lacks the bold moves that would have made it easier for firms to invest, hire and grow.'
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firms → say → moves
Andrea Egan, Left-wing leader of the Unison trade union, said: 'This was the Government's first chance to turn the Prime Minister's historic ambition for a new economic settlement into action.
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This → say → action
On that count it falls short.'
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it → fall → count
Overall, Mr Healey hiked taxes by £7billion a year, following on from the £66billion levied by Ms Reeves in Labour's first two Budgets.
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Healey → hike → Budgets
The OBR said the tax to GDP ratio would pass its historic high of 37.2 per cent next year and continue rising for the next five years.
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ratio → say → years
The Chancellor maintained the long-running freeze on tax thresholds, which have already dragged millions of people into higher tax bands.
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which → maintain → bands
Reform UK's Treasury spokesman Robert Jenrick described the Budget as 'an exercise in fiddling while the economy burns'.
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economy → describe → exercise
£100 off our energy bill 'won't help long term'
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100 → help → bill
…and 137 more, not listed.
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