Autumn budget shows right instincts, but not the right scale

The New Economics Foundation (NEF) has said the chancellor’s autumn budget was a step in the right direction but needed to go further to protect households from the upcoming surge in prices this winter.

Hannah Peaker, deputy chief executive at NEF, said:

“As households prepare to be hit by a wave of price rises this winter, the chancellor has shown the right instincts but not yet the right scale.

“The £100 support with energy bills will provide some welcome relief, but the chancellor could have been braver in the face of what we are up against. The typical energy bill is set to rise by over £400 in the first six months of next year, and the OBR has significantly downgraded its forecast for average living standards. It now expects no rise in real household disposable income between 2024 – 25 and 2028 – 29. 

“These challenging circumstances mean the chancellor may yet need to come back in the winter with a further package of support for households.

“The chancellor’s decision to tax banks’ bumper profits was the right one, but he should have gone further than an extra 3% for 15 months. This, along with much-needed reforms to capital gains tax, would have allowed them to introduce a National Energy Guarantee, which provides every household with a cheap block of energy to meet their essential needs.

“This budget was an opportunity to lower housing, energy and transport costs, and to reform the taxation of wealth. This would have helped get living standards back on track, and it would also have eased inflation — reducing the likelihood of future rate rises and giving the government space to invest in reviving our NHS and other public services.

“Nobody expected the government to unravel 40 years of neoliberalism in one budget and the prime minister is right to want to make our economy work for the people who keep it afloat. The upcoming ten year plan must now match that ambition with the action this crisis demands.”

Contact 

James Rush — 07929 866591 / james.rush@neweconomics.org

Notes

The New Economics Foundation is a charitable think tank. We are independent of political parties and committed to being transparent about how we are funded.