In yesterday’s Spring Statement Chancellor Rachel Reeves claimed UK households will be £500 a year better off under Labour.
The Chancellor told the House of Commons that compared to forecasts in the final budget delivered by the Conservatives, the Office for Budget Responsibility (OBR) predicts people will be, on average, £500 a year better off under the Labour Government.
Reeves stated this would mean “more money in the pockets of working people, higher living standards, promised by this Labour Government, delivered by this Government”.
Martin Lewis
Well, the devil is in the details as they say, and Martin Lewis is the man to seek it out.
Lewis wrote: “So where did the Chancellor’s #SpringStatement “real household disposable income will rise £500″ come from? Below I’ve clipped what seems to be the relevant bit from the OBR, and its not that rosy. The £500 isn’t mentioned but looking at this it’s over the life of parliament not per year. Most of it comes in the last two years, after drops first, and is based on assumptions that some of current tax proposals eg freezing tax thresholds will end. It’s worth a read…”
Also, Blick Rotherberg CEO Nimesh Shah told The Independent: “This is hardly ground breaking and I’m not sure anyone will or should be celebrating this modest increase.
“This, in itself, suggests that the economy is not going to grow to anywhere near the extent that Labour were promising when they came into government and the policies aren’t working – despite Rachel Reeves suggesting otherwise at the start of her Spring Statement.
“Households being £500 a year better off [over the full term] is less than £2 per week. But sticky inflation will wipe that out with some ease.
“When inflation remains high, interest rates aren’t coming down as quickly as expected and the economic growth has been halved, £500 in five years (an awfully long time away) doesn’t touch the sides and I don’t expect provides any encouragement.”
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