Resolution Foundation labels Healey's budget 'scattergun' amid rising energy costs

The Resolution Foundation has labeled Chancellor John Healey's first budget as a "scattergun" package that fails to meaningfully lift living standards. The thinktank argues the measures leave the country facing a difficult financial outlook for the remainder of the current parliamentary term. Its analysis, published on Thursday, asserts that the government's approach to energy costs remains flawed despite the introduction of new relief measures.

The foundation calculated that the poorest half of households will receive an average of £158 in support across this year and the next. This amount is only £14 higher than the £144 projected for the richest half of the population. Ruth Curtice, the foundation's chief executive, described this disparity as a "complete failure to target help at those who need it most." She noted that the support is being spread too thinly to make a lasting difference for vulnerable families.

The budget introduces two key energy measures. It scraps standing charges on gas bills and provides a £100 payment to up to 20 million households in council tax bands A to D. The foundation criticized the reliance on these council tax bands, noting that the UK continues to use 35-year-old property valuations to determine eligibility. This method, the thinktank said, results in weak targeting for winter energy discounts.

Despite the new interventions, the foundation predicts that typical household energy bills will remain higher this year than they were during the last major energy price shock. The analysis suggests that the cost of living support will leave even those receiving aid with higher out-of-pocket expenses for utilities compared to the previous crisis period. The Iran war has further exacerbated price rises, making the economic backdrop more volatile.

Looking ahead to the end of the parliamentary term in 2029, the foundation forecasts a £1,050 decline in typical disposable incomes from current levels. This projection limits the total growth in incomes over the five-year parliament to just £600. Curtice stated that the government has not clarified how it will balance public service ambitions against household income protection. She warned that the choices between these competing priorities will become starker next year.

Chancellor Healey defended the package by citing a global economic storm and a recent cut to gross domestic product growth forecasts by the Office for Budget Responsibility. He pledged to steer the country through the turbulence and "rewire the economy" for growth. The budget includes tax breaks for high street businesses and higher taxes on banks and gambling sectors to fund these initiatives.

Andy Burnham supported the measures, telling broadcasters that the council tax cut for 20 million households was a bold move to help with energy costs this winter. He added that lifting 70,000 businesses out of business rates entirely would provide a real lift to high streets across the country. The government views these steps as essential to maintaining economic stability and supporting local commerce during a period of global uncertainty.