Households could now be £30bn less well off by 2020
According to research from the Labour Party due to George Osborne’s Budget built on failure everyone in the country will now be £180 on average worse off by 2020 than previously expected. While at the same time the Chancellor gives a further tax cut to millionaires by cutting capital gains tax, which could be worth at least £3,000 a year on average.
Buried in the Budget last month was a revised forecast by the OBR for Real Household Disposable Income (RHDI), which showed a revision downwards of around 2 per cent (or £33bn between 2015-20) over the forecast period due to George Osborne’s failure to solve the UK’s productivity crisis.
This translates into the forecast for RHDI per head being £18,700 in 2020, when based on the ONS population projections and the OBR’s March 2016 forecasts for RHDI. However, when compared to the OBR’s previous November 2015 forecasts, RHDI per capita was forecast at £18,880 in 2020 – a difference of around £180 per head.
George Osborne said in his Budget last year before the General Election that this measure was an indication of living standards rising and families being “better off”. This forecast a year later will come as an embarrassment for the Chancellor on the back of his boastful outlook at the Autumn Statement.
John McDonnell MP, Labour’s Shadow Chancellor commenting on the findings said:
“The Chancellor tried to sneak this announcement past the British people hoping we wouldn’t notice that because of his failure on the economy we will all now have less money in our pockets by 2020 than he boasted we would back in November.
“George Osborne should be embarrassed that in his unfair, failed budget in which he gave another tax cut to millionaires worth at least £3,000 a year on average, he had no answers to solving our productivity crisis, and as a result his recovery built on sand will now mean the rest of us have £180 less than he said we would.
“It is time we had an economy that worked for everyone not just a wealthy few.”