Exact date ‘the pain’ from Rachel Reeves Benefits Street Budget will be felt by Brits | Personal Finance | Finance
A financial expert has warned hard working Brits that the real pain from Rachel Reeves’ “Benefits Street Budget” will not truly hit their wallets for the next four years.
Yesterday the Chancellor delivered what had been dubbed her “make or break” plan for the country’s finances – but not before the ful details of it were leaked ahead of time in an embarassing gaffe by the Office for Budget Responsibility. Reeves’ Red Box was full to the brim with more taxes for working people, taking the tax burden on UK residents to an all time high and massively increasing the state’s welfare spending.
The decade continues to look “really tough” for living standards, as most of the “pain” from Rachel Reeves’ Budget will not be felt until 2028, the chief executive of the Resolution Foundation think tank said.
Ruth Curtice told BBC Radio 4’s Today programme: “On kind of the fiscal repair job, she increased her head room by a lot, but she delayed the pain. So borrowing is actually up every year until 29-30. So interestingly, delaying the pain until just before an election.”
Ms Curtice continued: “Those threshold freezes kick in in 2028. Some of the other measures also not coming in – for example the mansion tax and the salary sacrifice – until 2028, so that’s when most of the pain from this Budget will be felt.”
She also said: “This Parliament is set to be second only to the last parliament for (living) standards… This decade continues to look really, really tough.”
Unemployment is higher than forecast in March, “so for some people who are struggling in the jobs market a particularly tough outlook”.
On welfare, the think tank boss said that while spending on pensioner and health and disability benefits are rising more than expected, “we didn’t hear much yesterday of how they might take action in the future”.
Ms Curtice added: “I think three things the Chancellor had to do – she had to ease the cost of living pressures and there she did quite a big job having quite a big effect on inflation next year, particularly through that support for energy bills and as you were talking about the lifting of the two-child limit also.
“She had to raise a lot of tax and she did, in the end, raise a lot of tax – 26 billion in the crucial year that her fiscal rules bite so clearly a tax raising bit and she did that.
“The biggest measure was this freeze to personal allowance thresholds which is a broad based tax rise hitting a lot of people, but also a series of small reforms to the tax system and then on the kind of the fiscal repair job, she increased her headroom by a lot but she delayed the pain.
“So borrowing is actually up every year until 2030 so, interestingly, delaying the pain until just before an election.”
Of the Chancellor, she added: “So she has pencilled in big tax tax cuts for 2028 so those threshold freezes kick in in 2028, some of the other measures also not coming in, for example, the mansion tax and the salary sacrifice until 2028 so that’s when most of the pain from this budget will be felt.”
