John Healey must use the budget to deliver breathing space, not just promise it
Liberal Democrat deputy leader Daisy Cooper MP makes the case for a 'Breathing Space Budget'
Daisy Cooper MP is deputy leader of the Liberal Democrats and the party’s treasury spokesperson
When Andy Burnham became prime minister in July, he said he wanted to give people breathing space. He was right to name the problem.
People are working harder, paying more in tax and getting less in return. For too many families, by the time the bills are paid and the essentials are covered, there is almost nothing left. Nothing for the little things that make life worth living: a pint in the pub with a mate, a takeaway with the kids, a coffee and cake in town, an ice cream on the beach.
None of this is extravagant. It’s normal life, and people who work hard should be able to afford it.
Tomorrow, the government faces its first big test. The budget will show whether that promise of breathing space means something, or whether it was just a good line.
A brutal double whammy
Families are facing rising bills and disappearing support at the same time. Energy costs are going up. So are petrol prices, and so is the cost of eating out.
Between January and March next year, the energy price cap is expected to rise. Fuel duty and rail fares are set to increase, and the Government’s cut to VAT on electricity bills could end.
That is the test. If the chancellor stands by while families are hit with another cost-of-living squeeze, his budget fails, whatever else is in it.
I’m not dismissing the long term. We must get Britain growing again. A stronger economy is how we raise living standards and bring down the cost of essentials like energy, travel, food and rent. But nobody can pay next month’s energy bill with the promise of growth over time. Growth is the long-term answer, but families need a short-term lifeline too.
So our message to the chancellor is simple. Don’t just promise breathing space. Deliver it.
What a ‘Breathing Space Budget’ looks like
The Liberal Democrats are calling for a £14 billion ‘Breathing Space Budget’. Over the next year and a half, it would save households £350 on average. It does three things: it cuts your energy bill, cuts the cost of travel, and cuts the cost of going out.
Energy. We would introduce an Essential Energy Guarantee, cutting average annual electricity and gas bills by £100. There would be additional support for households with children and disabled people, who so often face the toughest choices when the bills land.
Our high streets. We would cut hospitality VAT from 20% to 15% for the same period. That gives pubs, restaurants, and cafés room to keep prices down, protect jobs and stay open. It also makes a meal with the kids, a coffee with a friend, or a pint at the local a little more affordable. Anyone who has watched their local high street decline knows just what’s at stake.
Travel. For an initial three months, we would cut fuel duty by 10p, cut rail fares by 10%, introduce £1 bus fares and cut VAT on kerbside EV charging to 5%. We want public transport to be cheaper and easier to choose. But we also know not everyone has that choice. For millions of people, particularly outside our biggest towns and cities, leaving the car at home simply isn’t an option. They shouldn’t be left out of the help.
Fully funded, and paid for fairly
The Essential Energy Guarantee would be funded by clawing back excess support handed to monopoly energy operators and using that money to cut household bills instead.
The hospitality package would be funded by a one-off, time-limited windfall tax on the unexpected and unearned profits of the big banks.
The emergency travel package would be funded through additional Treasury receipts as petrol prices rise, triggered by Trumpflation.
A choice to act
This budget comes down to a choice. The chancellor can stand by while households and businesses are squeezed again, or the government can act. He can cut energy bills, cut the cost of travel, give our high streets a fighting chance, and give people something to look forward to at the end of the month. We’ve shown that it can be done and how to pay for it.
The prime minister promised breathing space. Tomorrow, the chancellor has the chance to deliver it and we Liberal Democrats have shown him how.
Image credit: Simon Dawson / Number 10 – Creative Commons
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