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THE Chancellor’s Budget Statement ignored climate breakdown, did almost nothing for people in poverty, and introduced tax cuts which largely benefit the rich and will further degrade public services, say social justice and environmental campaigners.
Danny Sriskandarajah, chief executive of the New Economics Foundation (NEF), said: “We live in a country where homelessness has skyrocketed in the past year, families can’t afford their weekly shop, and our public services have been stripped to the bone. Yet today the chancellor chose to offer tax cuts which will benefit the richest fifth of households 12 times more than the poorest. And we will all pay for it through yet more cuts to our public services.
“The public do not want tax cuts, they want their kids to learn in schools which are not falling down. They want their loved ones to be able to get an operation without spending years on an NHS waiting list. It is worrying the so-called ‘headroom’ the chancellor had today was used for tax cuts, rather than investing in vital services.
“To boost prosperity the government needs to change the current fiscal rules, which aren’t a good measure of safe levels of government borrowing. Raising taxes on the very wealthiest and borrowing sensibly would allow us to make smart investments in public services, supporting families and the green industries of the future.”
Lydia Prieg, head of economics at NEF, said: “This is a levelling down tax cut. This government once claimed to want to ‘level up’ the country. Yet today’s tax cuts will tear our regions and nations further apart.
“Combined with last autumn’s cuts to national insurance, the chancellor’s 2p cut today will cost the government £100 billion over the next five years. This is more than double the amount that will be spent on levelling up the UK over 13 years.
“Cutting national insurance will see billions more for the richest households, meaning London and south-east England will, once again be the biggest beneficiaries while regions like north-east England get table scraps.
“If the chancellor decided to spend the money lost to national insurance cuts over the next five years on levelling up, they could treble the entire 13-year levelling up investment programme, focusing on getting the money to the regions who need it most.”
Alex Chapman, senior researcher at NEF, said: “Freezing fuel duty for the 13th year will provide barely any help to households struggling to make ends meet – and instead puts our efforts to cut dangerous carbon emissions in jeopardy.
“Wealthier households, who tend to drive bigger cars and drive further, are the biggest winners from this. The freeze will lose the government vital money which could be spent on easing the cost of living and tackle carbon emissions at the same time – things like home insulations, cheap public transport and wind and solar power.”
Friends of the Earth’s head of policy, Mike Childs, said: “Yet another budget that largely ignores the dangers of climate breakdown, and yet another missed opportunity to properly invest in building a strong, clean and prosperous future. New research published only last week revealed that the UK’s net zero economy grew by nine per cent in 2023, while the rest of the economy continues to stagnate.
“The UK’s failure to match the US and EU, who are leading the charge with billions of pounds of green investment, will cost this country jobs and future prosperity.
“We need a Chancellor for the future, not one stuck in the past. Money spent on renewables, home insulation and better public transport would not only boost the economy; it would also protect health, slash energy bills and help the UK play its part in the fight against the growing climate crisis.”
Commenting on the Chancellor’s decision to extend energy windfall tax by one year, Friends of the Earth’s head of policy, Mike Childs, said: “The Chancellor is right to continue the energy windfall tax – but he should have extended it for more than a year and closed the ridiculous loopholes that allow companies to offset their tax by drilling for more costly and polluting fossil fuels.”
On the budget’s impact on struggling families, Chief Executive of Child Poverty Action Group Alison Garnham said: “For almost fifteen years, the four million kids from poor families have been at the bottom of the pile and today is no different. This was a Budget all but blind to buckling family budgets and broken public services and will leave a legacy of crumbling classrooms, cold homes, and empty tummies.
“Families needed the two child limit and benefit cap to be scrapped along with investment in children’s benefits, in free school meals and in the public services they rely on, from children’s centres to libraries to afterschool clubs to welfare rights advice, but the Chancellor turned away.
“The national insurance cut won’t help those on the lowest incomes, and while the eleventh-hour money for the Household Support Fund will avoid a cliff edge cut, it’s another temporary workaround when struggling families need lasting measures to ensure they have enough to live on.
“There is nothing responsible or good for growth about allowing more and more children to live in poverty, but the Chancellor ignored forecasts of record levels of hardship among children. Support with universal credit advances will give families more space but go nowhere near to making the kind of difference struggling families need. More social security support in childhood means healthier, more educated children, a more productive workforce, higher economic growth and reduced costs for government. Any government concerned about economic growth should be investing in kids, not allowing them to go hungry and leaving it to breaking local authorities to pick up the pieces
On the change to the Higher Income Child Benefit Charge, Garnham added: “The change to child benefit for higher income families is welcome but it turns the spotlight on families getting very much less. Child benefit has lost 20 per cent of its value since 2010 – an unforgiveable real-terms cut that hits kids in the lowest income families hard. Any government concerned with the country’s economic prospects must restore investment in children, starting with a £20 per week increase to child benefit and abolition of the two-child limit in universal credit allowances.”
On the six month reprieve for the Household Support Fund (HSF), which was scheduled to close at the end of March, Sabine Goodwin, Director of the Independent Food Aid Network said: “The Household Support Fund has become indisensable to local communities. It has reduced the need for food bank services and has provided the resources for frontline providers to distribute vouchers and other support. Extending the HSF is far from the solution to the UK’s policy-driven poverty crisis but it will certainly go some way to temporarily help food insecure households as well as food banks to get through the next few months. Its removal in October would be ill-conceived and extremely damaging. We hope this six-month extension is the first step towards ensuring crisis support is permanently in place, well-funded, well-promoted and easily accessible in local authorities across England.”
On the inequality of the measures contianed in the Budget Statement, Paul Kissack, Chief Executive of the Joseph Rowntree Foundation said: “This was a budget for earners and big owners. Prioritising capital gains tax cuts for owners of multiple properties is an insult to almost four million people facing destitution in the UK today. The Chancellor stood up at the despatch box today and announced a short-term patch up of his government’s own failed systems.”
* Sources: New Economics Foundation, Friends of the Earth, Child Poverty Action Group, and Independent Food Aid Network