Professor Richard Murphy writes that Jeremy Hunt’s Autumn Budget will fail to huge swathes of the UK whilst being yet another Tory gift to the wealthy
This was a terrible budget for most people in the UK. For sure, it protected pensioners and those on benefits and the minimum wage. It was also great for those with wealth – who will enjoy much higher interest rates on their savings. But for everyone else it was dire.
The failure to increase tax bands that say when tax must start to be paid in line with inflation will increase taxes for most people in work by around £250 a year, whilst national insurance might go up by over £150 for the same reason. And it has been announced that these limits won’t change again until 2028, meaning this pain is going to last for years.
On top of that was grim news on energy prices – which will probably increase by over £600 a year from next autumn.
That leaves people out of pocket by £1,000 a year, but things will get much worse than that for many people. Mortgage interest rates are now forecast to be around 5% for the next five or more years – costing a person with an average mortgage over £4,000 a year compared to 2020 rates. Rents will also rise for that reason as they are closely linked to mortgage costs.
And there is no good news on pay either. In the public sector, expect 2%, which will clearly do nothing to cover these costs. It may not be much better elsewhere either as the forecast is for serious increases in unemployment, which always keeps wages down.
The Office for Budget Responsibility thinks households will, on average, be more than £2,000 a year worse off overall for the next couple of years. But that’s an average. For millions things are going to be much worse than that.
For the families impacted by mortgage and rent rises, in particular, life is going to be very tough indeed. A forecast of falling house prices as many give up the struggle and try to sell up is a clear indication of that.
In nearly 50 years of watching the economy, I have never been as worried or angry as I am now about what is about to hit the UK.
And the absurd thing is that none of this is needed. The official forecast is that inflation will be zero by the end of 2023 and maybe even negative after that. So what is all this pain for? Certainly not to defeat the inflation resulting from Putin’s war.
It seems instead it is just about punishing us for wanting to try to survive in modern Britain under a Tory government whose sole aim is to appease bankers in the City of London. What did we do to deserve this?
This article was first published in the Mirror