By Salma El-Sakka
The Resolution Foundation has delivered a scathing verdict on Chancellor John Healey's first budget, warning that his "scattergun" approach does little to boost living standards and leaves Britain facing a painful second half of the parliamentary term. The thinktank said measures to ease household energy costs would still leave bills higher this year than during the last energy price shock.
Thinktank Warns of Poorly Targeted Support
In its analysis published Thursday, the foundation said the budget's cost-of-living subsidies hand the poorest half of households an average gain of £158 this year and next, just £14 more than the £144 received by the richest half. Chief executive Ruth Curtice described it as "a complete failure to target help at those who need it most."
Energy Cost Measures Fall Short
The budget scraps standing charges on gas bills and provides £100 energy payments for up to 20 million households in council tax bands A to D. However, the foundation said the scheme relies on 35-year-old property valuations to determine eligibility, leaving the UK with a poorly targeted discount system.
Disposable Incomes Projected to Fall
The Resolution Foundation predicts typical disposable incomes will fall by £1,050 between now and the end of the parliamentary term in 2028-29, limiting the total increase over the five-year parliament to just £600. Curtice warned that the second half of the parliament could prove tough going against that projected decline.
Chancellor Defends Budget Measures
Healey said the UK is being battered by a global economic storm, with the Office for Budget Responsibility slashing its GDP growth forecast for next year. He promised to steer the country through the turbulence and "rewire the economy" for growth. The budget also includes tax breaks for high street businesses and higher taxes on banks and gambling. Andy Burnham defended the measures, calling the energy support for 20 million households and the lifting of 70,000 businesses out of business rates "bold" steps.
