‘Budget is bold enough’ despite limited ‘room for manoeuvre’, Andy Burnham says

Prime Minister Andy Burnham has defended the Budget against claims it is “not bold enough”.

Mr Burnham insisted there are “strong signs that the economy will improve” but admitted the Government does not have “huge room for manoeuvre”.

Tory leader Kemi Badenoch said the Budget is “not good enough, not strong enough, not bold enough”, while Reform UK’s Treasury spokesman Robert Jenrick described it as a “nothing burger”.

The influential Institute for Fiscal Studies (IFS) think tank said the Budget’s “raft of fiddly measures” would do little to boost growth and warned it delayed tough decisions and the Resolution Foundation think tank said Chancellor John Healey had “spread the jam thin”.

But defending the plans, the Prime Minister told broadcasters: “It’s pretty bold to help 20 million households with energy costs through the council tax cut this winter.

“It’s bold to lift 70,000 businesses out of business rates altogether, and that will give a real lift to high streets up and down the country.

“Of course, we already announced the plan to take VAT off people’s electricity bills. There’s a whole host of other measures. We’re doing what we can to support people in difficult times, recognising that we don’t have huge room for manoeuvre.

“But as you can see in what the Chancellor has announced, there are strong signs that the economy will improve over the coming years. The fiscal rules are met, so we’ve done all of this within a very prudent and stable approach.”

In the IFS initial response to the fiscal statement, director Helen Miller said: “The plan to reduce borrowing has been pushed back.

“This Budget has a raft of fiddly measures but very little that will move the dial on growth.”

She added: “Whether reductions in borrowing can actually be delivered depends heavily on public service spending plans, where growth is set to slow sharply after this year.

“History warns us to be sceptical of tight spending plans in later years of the forecast.”

Former deputy prime minister and Liberal Democrat leader Sir Nick Clegg meanwhile told an audience in Washington: “I just think one of the things that I find most irritating, certainly in politics, in my country, is this odd culture where people think that it makes political sense not to take decisions at all.”

The situation for British living standards is “grim”, with households set to be little better off than before the Covid pandemic even a decade after Covid-19 hit.

Energy shocks from the wars in Ukraine and Iran and the pandemic have all contributed to a dismal period for Britons, with increases in earnings being squeezed by rising costs.

In its latest assessment, the Office for Budget Responsibility (OBR) said real household disposable income (RHDI) per person was set to “fall slightly in the near term”, then partially recover as the energy price shock from the war in Iran eases.

“But, in 2030-31, it is only around 2% above pre-pandemic levels,” the budget watchdog said.

The Budget will face closer scrutiny on Thursday when the OBR and Resolution Foundation researchers host a post-Budget briefing.

The IFS will also give a considered analysis of the Budget.

On Wednesday, it was revealed that millions of households will receive £100 to help with soaring energy bills and high street firms will get a tax break.

Mr Healey said the UK was being battered by a global economic storm, with the Budget watchdog slashing its forecast for gross domestic product growth next year.

But he promised “to steer us through the global economic storms today, to chart a new course for Britain in the years ahead, to give people fresh hope for Britain’s future”.

Mr Healey hiked taxes on banks and gambling firms to provide “breathing space” he promised for households and high street businesses.