Budget has little cheer for tight household finances
Beer-drinkers may be happy, campaigners say, but soaring energy bills and food prices are a worry for millions, reports Claire Smith
WHILE the Budget brought cheer to beer-drinkers and relief to drivers, consumer groups say it did not do enough to ease the squeeze on household budgets.
Campaigners say something should have been done about soaring energy bills and food prices – warning that many families are already at breaking-point.
Meanwhile, analysts warn that rising inflation and stagnant wages are already restricting consumer spending and will inevitably put further pressure on the economy.
Research carried out by uSwitch shows more than a third of people (35 per cent) fear the Budget will spark a triple dip recession.
Scots have the lowest level of confidence in the Chancellor, with 87 per cent saying he does not understand the concerns of ordinary people compared to 77 per cent nationwide.
Campaigners say fuel bills are now the biggest financial concern and that they are currently being swelled by “hidden taxes” – with £49 on a typical yearly gas bill and £59 on a typical electricity bill currently going to the government in “green” tax. Axing VAT on fuel bills would save around £60 a year.
Michael Ossei, personal finance expert at uSwitch.com, says: “Homebuyers and small businesses may be jumping for joy following this week’s Budget, but the squeezed middle has been left stuck in the mud. People did not expect much from the Budget but have received even less than they had hoped for. Taking 1p off a pint is not going to cut it for the millions of homes struggling to pay their essential bills every month.
“For many, the Government simply hasn’t done enough to help households cope with spiralling cost of living. What
“People did not expect much from the Budget but have received even less”
is somewhat depressing is that most consumers don’t feel a change in government would make any difference to their finances – leaving them feeling trapped in a financial cul-de-sac. But there are always things you can do to help improve your finances, no matter how small. ”
According to a post-Budget poll carried out by Which? a third of people now feel less confident about the prospects for the economy over the coming year, while nearly a third (28 per cent) say they feel less confident about their personal finances.
Research by the consumer organisation suggests households have reduced their spending by more than £3,000 a year since the beginning of the financial crisis and more than half (55 per cent) say they plan to cut back on their spending significantly in the year ahead.
Six out of ten households predict their finances would be tighter in 2013 than last year.
Which? executive director Richard Lloyd said: “While people welcome all the financial help they can get, the Budget has not only failed to increase consumer confidence but has left people feeling worried about