The Institute for Fiscal Studies has criticised Chancellor John Healey's Budget, describing it as risky and warning that it does too little to tackle what it characterises as the worst decade for UK household income growth on record. The think tank, one of the most influential voices on British public finances, has questioned the government's spending plans and their ability to lift living standards.
According to the IFS, «no amount of temporary cost of living packages» will fix the lack of household income growth. The institute's assessment points to a structural problem rather than a short-term squeeze, meaning that one-off support measures are unlikely to reverse a long-running trend in which incomes have failed to keep pace in the way they historically did. Coverage of the reaction has gone further, with one commentary describing the Budget as «bonkers».
The criticism is significant because the IFS is widely relied upon by politicians of all parties and by financial markets for independent analysis of fiscal policy. Its scepticism about the Budget's spending choices places pressure on the Treasury to explain how the measures announced will translate into higher real incomes for households. The institute's concerns also extend to the wider fiscal position, where it has questioned whether the plans are sustainable.
The Budget has also drawn attention to other tax measures. Reports indicate that a new « green tax » on imported fuels, announced by Mr Healey, could apply to jet fuel, potentially raising the cost of air travel for holidaymakers. Whether and how that measure would be implemented remains a matter for the Treasury to confirm, and no final details on the rate or timing have been set out in the reporting available.
The response from the IFS places the spotlight on a central question for the government: whether a Budget framed around fiscal discipline and targeted support can offer a credible path to rising living standards. For households already feeling the strain of years of sluggish income growth, the institute's verdict suggests that the debate over the Chancellor's approach is likely to continue in the weeks ahead.