Resolution Foundation Warns UK Budget Will Still Leave Energy Bills Higher Than in Last Crisis

Britain's Chancellor John Healey delivered a "scattergun" budget that did little to boost living standards and left Britain facing "a painful second half" of the parliament, the Resolution Foundation, a leading economic thinktank, has warned.

The foundation said measures to ease household gas and electricity costs would still leave energy bills higher this year than during the last energy shock. Healey had sought to provide "breathing space" for the public amid rising prices exacerbated by the Iran war, but the thinktank said the effort was poorly targeted.

It said the subsidies to ease the rising cost of living handed the poorest half of households a gain of £158 on average this year and next, just £14 more than the £144 received by the richest half — meaning the rich received almost as much as the poor.

The foundation's chief executive, Ruth Curtice, said this highlighted "a complete failure to target help at those who need it most". She said that faced with a tough backdrop amid global economic turmoil, the chancellor delivered a budget that did little to address the sharp challenges facing Britain.

Curtice said cost-of-living support was being spread far too thinly and would leave even those families receiving help facing higher energy bills than they did during the last energy price shock.

In his first budget as chancellor, Healey said he would cushion the blow from rising inflation while also showing how the government plans to "rewire the economy" to boost growth.

Measures aimed at tackling soaring energy costs include the scrapping of standing charges on gas bills and energy payments of £100 for up to 20 million households in council tax bands A to D.

But the foundation said Healey was the latest chancellor to preside over a poorly targeted energy discount scheme that has left the UK reliant on 35-year-old property valuations to determine eligibility for support with energy bills this winter.

Typical disposable incomes would fall by £1,050 between now and the end of the parliamentary term in 2028-29, limiting the increase over the entire five-year parliament to just £600, the foundation predicted.

Healey, for his part, said the UK was being battered by a global economic storm, the backdrop against which his budget was presented.