Tories devastating record set to continue unless Budget delivers 'desperately needed measures’ to recover living standards
In a bleak assessment of the Tories track record, the 2020s are on course to be the ‘second lost decade’ in living standards, a leading charity has warned the Chancellor ahead of his Spring Budget announcement.
Leading anti-poverty charity, Joseph Rowntree Foundation (JRF) published the damning report on Monday, warning that, without political intervention, this Wednesday’s budget risks condemning Britain to another decade of declining living standards.
Based on current government spending plans, working families could be £1,300 a year worse off by 2029 than in 2021. While essentials are predicted to remain less affordable relative to post tax earnings until 2029.
The cutting analysis of the UK’s economic trajectory is a warning to Jeremy Hunt that if he fails to deliver immediate measures to support living standards in the coming budget, then this will be the result.
Decisive intervention from policy makers is what the charity has urged, as it warned that many families will be poorer by the end of the 2020s than at the start. While the Chancellor must prioritise providing long-term economic security for households requiring “the right political will” to turn the situation around.
Currently, post-tax household earnings are £1,900 a year lower for the average working family than they were in 2021, while essential goods and services for the average family are £270 a year more expensive than at the beginning of 2021, the JRF research found.
Polling carried out ahead of the budget found that the general public are currently most concerned about the cost of essentials, NHS funding, housing and public services.
Spring Budget asks
‘The economic outlook is bleak’, the report states, however it also highlights that the challenges are ultimately ‘political in nature’, rather than economic realities.
It stressed two clear priorities for Jeremy Hunt’s budget, the first being the need to ramp up immediate targeted welfare for families through existing channels of support, such as retaining and improving the Household Support Fund, ensuring Local Housing Allowance and Support for Mortgage Interest. Also protecting spending per head on public services is essential.
Second, building solid long-term foundations for a social settlement providing economic security to families. For example, strengthening Universal Credit, reform to the housing market, redesigning the employment services away from monitoring and compliance and towards engagement and supporting people back into the right type of work. Also rethinking the care infrastructure so parents have access to the right kind of childcare.
Jeremy Hunt is predicted to cut national insurance by 2p in his budget and freeze fuel duty for another year.
Note: Data in this article was amended on 6 March after the Joseph Rowntree Foundation issued a correction, caused by a model parameter error and computation error on the findings for post-tax earnings.
(Image credit: Creative Commons)
Hannah Davenport is news reporter at Left Foot Forward, focusing on trade unions and environmental issues
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