Rishi Sunak’s serves up Boris Budget with higher taxes and spending

by Torsten Bell

Torsten Bell
Torsten Bell

The big economic backdrop to today’s Budget was growth and spending up, but living standards are stagnating – yet again.

We heard a lot from the Chancellor on these first two trends as he delivered a ‘Boris Budget’ and spent half of the £141billion borrowing windfall handed down by the Office for Budget Responsibility.

Much of this windfall went on raising public spending, including reversing some of his own decisions like the overseas aid cut.

Health and social care continue to receive the lion’s share of extra spending – hardly surprising given how the NHS has been hit by the pandemic.

We heard a lot less about the terrible outlook for living standards in Britain.

A very welcome extra £3billion for Universal Credit was overshadowed by last month’s £6bn cut to that same benefit: everyone on UC lost from the cut, but fewer than half benefit from yesterday’s increase.

Those out-of-work following the end of the furlough scheme earlier this month are receiving no extra support this winter.

Even once we take into account the welcome 6.6% rise in the National Living Wage, the poorest fifth of households will be an average of £280 worse off overall.

The Chancellor summed up his Budget and Spending Review as ushering in a new age of optimism.

But while he delivered a Boris Budget in terms of higher taxes and spending, his boss’s promises of a new high wage economy remain some way off.

Wages are rising for some – like HGV drivers – but prices are surging for everyone, so household incomes are set to grow by a paltry 0.3% next year.

The Government had some good news on the public finances yesterday, but it’s what happens to household finances that ultimately matters most to families up and down Britain.

And for them higher taxes and higher prices mean there are difficult months ahead.

This article originally appeared in the Daily Mirror