Call for Sunak to U-turn on Budget plans
The SNP has called on Chancellor Rishi Sunak to U-turn on his Budget proposals following a warning from the Office for Budget Responsibility (OBR).
Speaking at the Treasury Committee on Monday, OBR officialsircharliebeanpredicted real household disposable incomes would not reach prepandemic levels until the end of 2023 following the Chancellor’s announcement last week.
Treasury officials warned the amount of wiggle room for the Chancellor to cut the deficit in the next three years and reduce national debt was the secondsmallest level on record.
Mr Bean also described UK productivity growth as “modest” and not “anything like the pre-pandemic rates”.
The SNP urged the UK Government to deliver a major financial package to help boost incomesandreverserisingpoverty levels across the UK.
Mr Bean said: “Central to raising living standards going forward will be raising productivity growth. We don’t have real household income getting abovepre-pandemiclevelsuntil the back end of 2023, and then it’sgrowingataprettymediocre rate from there until the end of the forecast period.”
SNP shadow chancellor Alison Thewliss said: “The Chancellor’s Budget has left us in no doubt that, under Westminster control, Scotland will not beabletodeliverafairrecovery from the pandemic.
“Thesnpdemandedaradical and progressive package that would boost incomes and tackle rising poverty levels, which would have included reversing theuniversalcreditcut,deliveringamulti-billion-poundbrexit Recovery Fund, and offering a meaningful pay rise to public sector workers to offset a decade of Tory cuts.
"Noneofthesecallsweredelivered by the Chancellor and it will now be those on the lowest
incomes who will suffer the consequences."
She added: “Today’s comments from Sir Charlie Bean clearly shows that the costof-living crisis we are currently facing is here to stay. Only with an investment-led recovery will the UK be able to tackle this crisis – not by making champagne cheaper and hiking taxes on the countries poorest.
“The Chancellor must listen to these concerns and U-turn on his Spending Review plans – plans that will leave millions of people across the UK thousands of pounds worse off.”
The economic forecasters said they also feared public transport may face a permanent black hole in its finances without service cuts as
passenger numbers remain below pre-pandemic levels.
In a two-hour grilling by MPS on the details of Mr Sunak’s Budget, OBR chairman Richard Hughes also suggested the Treasury may struggle to hit its new deficit targets, especially if interest rates rise, and would be in for a “wild ride”.
He said: “The Chancellor set himself some new fiscal rules in this budget and they are to get debt falling as a share of GDP [gross domestic product] by 2024/25 and balance the current budget.
“The headroom he set aside to reach those targets is the second-lowest headroom that any Chancellor has had when setting fiscal rules.”