Good morning. The day after the budget is often the moment when big initiatives announced by the chancellor the day before with a flourish start to unravel as experts pore over the small print. There is not much of that happening this morning – mainly because John Healey did not have any really big initiatives up his sleeve. Compared with a normal budget, his tax and spending initiatives were mostly relatively minor. That means that the opposition parties have been struggling to find things to attack, and so instead they have resorted to criticising Healey for what he did not do: slash welfare (the Tory/Reform UK solution), or join the EU’s single market (the Lib Dems’).
Healey has given interviews to all the main broadcasters, which are playing out this morning, but they were recorded last night and they don’t have any sensational new revelations. As Rowena Mason reports, one of the top lines was Healey saying he would cut welfare spending before the election.
But there were other lines in the interviews too. I will be posting all the highlights this morning.
The two main public spending thinktanks, the Institute for Fiscal Studies and the Resolution Foundation, are both publishing reports assessing the budget this morning. The RF has issued a news release with its main findings and its assessment of the overall economic impact of the budget measures highlights three problems.
The poorest half of households will gain £158 on average from cost of living support this year and next, just £14 more than the £144 received by the richest half – highlighting a complete failure to target help at those who need it most.
Tight spending plans beyond 2028-29 imply departmental budgets will take more of the strain in the future. But if the 3% defence target is met and real health spending continues to grow at 2.6%, pencilled-in spending totals imply that funding for 13 ‘unprotected’ departments will fall to just 4.7% of GDP by 2031-32, close to the post-austerity historic low.
Median real annual disposable incomes for working age households are set to grow by a paltry £600 over the course of the parliament. Worse still, those gains are already behind us. Between now (2026-27) and the end of the parliament (2028-29), typical incomes are forecast to fall in total by £1,050 (3 per cent).
This is one reason why so many people continue to think Andy Burnham will call an election next spring (before the electorate feels the full misery of getting poorer) – despite Burnham yesterday saying he would not hold one within the next 12 months.
Here is the agenda for the day.
9am: Jonathan Haskel, chair of the Office for Budget Responsibility, and Ruth Curtice, head of the Resolution Foundation, speak at an event where the RF is presenting its budget analysis.
9.30am: Heidi Alexander, the transport secretary, takes questions in the Commons.
10.30am: Helen Miller, director of the Institute for Fiscal Studies, presents the IFS’s budget analysis.
11.30am: Downing Street holds a lobby briefing.
After 11.30am: MPs resume the budget debate in the Commons.
Lunchtime: Andy Burnham is on a visit to a Rolls-Royce factory in the Midlands where he is speaking to the media.
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