Worse off under Burnham: The middle-earners and families struggling with bills who face a fall in living standards under Labour’s ‘is that it?’ Budget
The Budget left many families facing a fall in living standards, while raising taxes to a record high and increasing benefit spending. Critics said its cost-of-living measures were too small to offset rising bills, and that the Chancellor avoided difficult choices on welfare and defence.
The Office for Budget Responsibility cut its forecast for economic growth next year to 1 per cent and said real household disposable income per person is £420 lower than two years ago, with no recovery expected until April 2029. The Prime Minister defended the energy bill support, while economists warned that spending plans lacked detail and could mean real-terms cuts for some departments.
In short
- Growth forecast cut to 1 per cent.
- Living standards are expected to fall over the next year.
- Household disposable income is £420 below its level two years ago.
Steelman: both sides, in good faith
The strongest fair case each way — we don't pick a winner.
The case for
Supporters could argue that the Budget offers targeted help with energy bills and protects household incomes at a time when many families are under pressure. They may see higher taxes and benefit spending as necessary to fund public services and support people most exposed to rising costs, while judging the growth forecast as a difficult inheritance rather than a reason to abandon those priorities.
The case against
Critics could argue that the support is too modest to prevent families’ living standards falling, especially when real household disposable income per person remains below its level two years ago. With weaker growth forecasts and spending plans lacking detail, they may say the Budget raises taxes without setting out credible choices on welfare, defence or public services, leaving households and departments exposed to further pressure.
Explained simply
A Budget sets the government’s plans for taxes and public spending, including support for households and funding for public services. The Chancellor prepares it, and the Office for Budget Responsibility independently assesses the likely effects on the economy and public finances.
Household living standards depend on how incomes compare with prices and bills. Middle-earners and families can feel pressure when essentials cost more, while changes to taxes and benefits affect different households in different ways.
The government must balance support for households with funding services such as health, education and defence, while managing public borrowing. Forecasts from the OBR help show the expected economic context, but actual growth and household incomes can differ from predictions.