The Prime Minister says we’ve entered a period of optimism - but for who?
Please sir, can we have some more?
The Prime Minister has said we've entered a period of optimism - but who aims to benefit?
Chancellor Rishi Sunak's budget did little to tackle rising energy bills, recent tax hikes or levelling up Britain's dire transport links.
"Bankers on short haul flights sipping champagne will be cheering this budget today," claimed Labour.
While some commentators have criticised Sunak's Gordon Brown-esque approach to "over-spending", others have pointed out the meagre financial offerings for people on the lower end of the scale.
So, let's dispel some of the myths surrounding the Chancellor's long-awaited budget:
This is the biggest spending increase this century
Sunak was wrong to call his budget’s spending increases the largest in a century.
In fact, according to data from the Institute of Fiscal Studies, it’s not even the most generous this decade.
Some policies indicate a marked shift from Osbourne’s austerity budget, with Sunak announcing social care funding and spend-per-pupil to return to 2010 levels.
However, education unions have described the levels as “inadequate”. Kevin Courtney, joint general secretary of the National Education Union, claimed the meagre £2bn of extra funding proved the Tories were "still determined that education recovery will be done on the cheap".
The allocated funding is still less than a third of the £15bn suggested by the government’s former education catch-up tsar, Sir Kevan Collins.
Similarly, the £6bn allocated to clearing the NHS “backlog” has been deemed insufficient.
Chancellor Sunak reaffirmed the Tory pledge to build 40 new hospitals which NHS chiefs described as having “little chance” on the punitive funding allocation.
The Tories are looking after Universal Credit claimants
The Chancellor unveiled a cut to the Universal Credit Taper, which he claimed would save two million families £1,000 per year.
Those on Universal Credit have their state support cut dependent on the number of hours worked. The reduced rate allows claimants to work more hours without affecting their credit payments.
Sunak will reduce the rate from 63 per cent to 55 per cent, which will provide a desperately needed boost for some households.
However, the change won’t help non-working claimants who recently had their £20-a-week covid uplift withdrawn.
Almost 5.8 million people recently lost £1,040-a-year due to cuts.
With the cost-of-living rapidly rising, campaigners warn many families will be facing a winter of discontent.
Shadow Chancellor Rachel Reeves said: "The arrogance, after taking £6bn out of the pockets of some of the poorest people in this country, expecting them to cheer today for £2bn given to compensate!"
The beer tax is cause for celebration
Duty rates on cigarettes saw a sizable increase thanks to a rocketing rise in RPI (retail price index).
Top-end packs of 20 cigarettes will rise from £13.50 to £14.43, while the cheapest 20-deck will go from £8.80 to £9.41.
Good day for: sparkling wine, champagne, Prosecco and Cava drinkers
Bad day for: fans of Frosty Jacks
Mediocre day for: home drinkers. There’ll be no change in shop-bought price for most beers.
The big announcement seemed to be the falling price of a pint: a whopping 3p off each pint of draught beer.
To celebrate the announcement, Sunak and Prime Minister Boris Johnson pulled pints at the Fourpure Brewery in Bermondsey, South London. A brilliant photo-op, had it not been pointed out the draught tax cut only applies to kegs larger than 40 litres. Johnson’s pint, pulled from a pony keg, would not qualify for the tax cut.
The Tories have an environmental backbone
Ahead of COP26, the Tories have proved themselves incapable of flying the flag for environmentalism, and it’s not just because they recently legislated water companies to dump raw sewage into Britain’s waterways.
The UK government has committed to net-zero carbon emissions by 2050, an ambitious target the Tories are hoping to commit other nations to this weekend.
Net-zero was not mentioned in Sunak’s budget speech until 20 minutes in.
Two days out from the crucial summit, the Chancellor cut air duty for domestic flights. In a bid to boost the aviation sector, Sunak announced a plan to “bring people together across the United Kingdom”.
As a result, nine million short-haul fliers will see their duty cut by half, while passengers flying ultra-long haul will pay an extra £91 tax levy.
Balancing net-zero and the levelling-up agenda is a seemingly impossible task for Sunak: uncertainty continues to hang in the air over the eastern leg of HS2 from Birmingham to Leeds and little has been done to tackle the absurdity of train travel in Wales.
Ultimately, Britons will be able to fly across the country for business or leisure to the detriment of the UK’s carbon emissions targets.
So who benefits?
Shadow Chancellor Reeves said: "In the long story of this Parliament, never has a Chancellor asked the British people to pay so much for so little", claiming the budget does little to benefit low-income earners.
Analysis from thinktank Resolution Foundation revealed Sunak's plan for a high tax, weak wage economy will hit middle income families.
The research found a single parent with one child and housing costs of £140 a week, working 20 hours a week on minimum wage, will be £5 a week worse off overall in April 2022 than they were in September 2021.
Torsten Bell, chief executive of the Resolution Foundation said “The Chancellor has set out plans for a new high tax, big state economy” with the budget revealing “not the high wage economy envisaged by the Prime Minister last month or even the lower tax economy that Rishi Sunak said was his goal yesterday”.
The study showed tax will reach its highest level as a share of the economy since 1950 by 2026-27.
Households will pay a £3,000 increase since Boris Johnson took office as prime minister.
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