“This Parliament is on track to be the first in which real household disposable incomes actually fall"
Analysis of Jeremy Hunt’s autumn statement has found that households will be around £1,900 worse off at the end of this parliament compared with the beginning, once more highlighting just how much of a disaster the Tories have been for the economy.
The findings come from the Resolution Foundation, an independent think-tank focused on improving the living standards of those on low to middle incomes.
Hunt was keen to paint a rosy picture of his autumn statement yesterday, keen to portray himself as a ‘tax cutting’ Tory chancellor, on the side of ordinary families and yet instead his policies will worsen inequality, further cut spending on public services and harm the most vulnerable in society.
The Resolution Foundation said in its analysis: “The biggest inflation shock in four decades, and taxes rising to their highest level in eight decades, means the outlook for living standards remains dire. Real household disposable income per person is expected to fall by 1.5 per cent in 2024 – presenting a bleak economic backdrop to the 2024 election.
The last time RHDI fell in an election year was 50 years ago, in 1974. This helps drive a new grim record on living standards.
“This Parliament is on track to be the first in which real household disposable incomes actually fall (by 3.1 per cent from December 2019 to January 2025): households will, on average, be £1,900 poorer at the end of this Parliament than at its start.”
The think tank said that this government would set a “grim” new record for living standards going down.
Furthermore, almost half the benefit from the National Insurance cuts will go to the richest 20% of households, with most of the gains being seen in London and the South East, according to new analysis by IPPR.
While the chancellor is keen to portray a rosy picture of Tory spending plans, describing himself as a compassionate Conservative, recommitting to 1% a year public spending increases in the latter years of the decade, what that amounts to in reality is a real terms cut in unprotected government departments.
The OBR says the measures will result in a £19bn reduction in spending on public services, after accounting for inflation. So while our public services are stretched and schools are crumbling, the Tories will not be investing in our public services yet again.
Basit Mahmood is editor of Left Foot Forward
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