Worse off under Burnham: The middle-earners and families struggling with bills who face a fall in living standards under Labour's 'is that it?' Budget

John Healey faced a backlash last night after an underwhelming Budget that left families facing a fall in living standards.The Chancellor pushed up taxes to a record high and poured billions of pounds more into benefits.But he ducked tough decisions on increasing defence spending and curbing the runaway welfare budget.And a package of measures designed to ease the cost of living was so modest it was last night dubbed the 'Gherkin Budget' after Mr Healey boasted of tariff cuts that will shave a few pence off a jar of pickled cucumbers.In a withering assessment, Kemi Badenoch said the Budget 'does not come close to meeting the moment'.The Tory leader said: 'We have overspent, over-borrowed, over-taxed and are drowning in an out-of-control welfare system.'She added: 'Most people listening to this Budget will be thinking to themselves, is that it? Really, is that it? The Prime Minister came in promising to reverse 40 years of neo-liberalism. Instead, we got 4p off gherkins.'The Office for Budget Responsibility (OBR) downgraded its anaemic growth forecast for next year to just 1 per cent.But experts fear that the situation could get worse within days, as speculation mounts that Donald Trump is planning new bombing raids on Iran after next week's midterm elections in the US, which would drive oil prices higher still.In his first Budget as Labour Chancellor, Mr Healey: Raised taxes on savers, landlords and banks as he continued the Labour Government's record of pushing up the tax burden to new highs at every Budget;Offered a £100 rebate to 20million homes in council tax bands A to D to help offset soaring energy bills this winter;Published official forecasts showing that inflation and government borrowing are both on course to rise;Signed off an extra £5billion a year in welfare spending after failing to bring forward reforms;Delayed a planned 6p-a-litre increase in fuel duty until July; Faced criticism after he set a target of spending three per cent of GDP on defence by the end of the decade – but failed to say how it would be funded; Bowed to pressure to scrap Rachel Reeves's plan to cut the tax-free cash Isa limit.Mrs Badenoch accused Labour of kicking difficult decisions into the long grass 'because the Prime Minister wants to keep the option of an early election open – putting his party's interests before the country'.Some Labour MPs were also speculating last night that the PM is preparing a snap election after weak growth forecasts for next year were downgraded again.The Prime Minister said he could 'rule out calling a general election in the next 12 months'.He insisted that the Budget did contain some 'bold' measures, including the council tax rebate to help offset energy bills, even though it is likely to be swallowed up by a jump of several hundred pounds in the energy price cap come January.The PM said the package would make a 'significant' difference 'if you add it all up'. Mr Healey described the package as a 'Budget for working people'.He said the measures would give people 'breathing space' from an energy crisis triggered by a war 'we did not want'. The Chancellor insisted he would 'bring down the welfare bill' in future.But he said it would be done 'in a Labour way'.He said he was committed to 'fiscal discipline' and pencilled in tough spending limits for the final years of the decade. Economists said unprotected departments such as the Home Office and transport could face real terms cuts of 2.6 per cent a year.But he gave no indication of how the savings would be achieved.Economist Paul Johnson, former head of the Institute for Fiscal Studies, said: 'The numbers add up because the numbers were made up. If business and the country need some certainty and stability to help with growth, this Budget did not provide it.'The OBR warned that living standards are set to fall in the next 12 months. The watchdog's forecast for real household disposable income per person is now £420 lower than two years ago and is not predicted to recover until April 2029.OBR economist David Miles said Britain was facing a 'pretty grim picture' for living standards, with real incomes no better than they were before the pandemic.The centre-Left Resolution Foundation think-tank described the outlook for living standards as 'dire'. Chief executive Ruth Curtice said the Chancellor had 'spread the jam thin' and warned that his decision to cut the buffer against breaking his own fiscal rules meant he now 'doesn't have enough to survive one bad roll of the dice'.The Chancellor said it was right to use some of the so-called headroom to help soften the impact of the 'global economic storm' caused by the Iran war.But he faced criticism on all sides for his timid approach. Rain Newton-Smith, CBI chief executive, said: 'This Budget lacks the bold moves that would have made it easier for firms to invest, hire and grow.'Andrea Egan, Left-wing leader of the Unison trade union, said: 'This was the Government's first chance to turn the Prime Minister's historic ambition for a new economic settlement into action. On that count it falls short.'Overall, Mr Healey hiked taxes by £7billion a year, following on from the £66billion levied by Ms Reeves in Labour's first two Budgets. The OBR said the tax to GDP ratio would pass its historic high of 37.2 per cent next year and continue rising for the next five years. The Chancellor maintained the long-running freeze on tax thresholds, which have already dragged millions of people into higher tax bands.Reform UK's Treasury spokesman Robert Jenrick described the Budget as 'an exercise in fiddling while the economy burns'.Below, read the verdicts of the real people affected by the Budget. £100 off our energy bill 'won't help long term' Name Abigail GilesAge: 35Lives: BerkshireJob: Teacher and influencer Teacher Abigail Giles with her electrician husband and their daughter MillieBerkshire mother-of-one Abigail Giles said there was still 'not a lot of help for working families' facing massive energy bills in the new year.Her family – which also includes her daughter Millie, 3, and electrician husband James, 34 – will qualify for the £100 energy bill relief, but she says this 'doesn't really help out long term'She said her 'energy bills through the winter before have been £200 in just a month', and this is likely to rise further as the energy price cap goes up – along with virtually all other costs of living.The removal of the gas standing charge is not much help either as their home is mainly heated electrically.Her husband James's van runs on diesel for his business JG Electrical, and despite the fuel duty freeze, she said, 'costs are really mounting up. We really think it's making everything harder and is just another high cost to consider.'And Mrs Giles added of another increasing essential cost for households: 'I'm just sick of worrying about the mortgage rate. Ours, at the moment, is looking at going up £300 to £400 a month from November.'Mrs Giles works as a teacher but has had to go part time and start a social media 'mumfluencer' page – abigailfinds.uk – to get freebie days out to entertain Millie which they otherwise 'couldn't afford' and help other families in the same position.'It shouldn't be this hard to get by,' Mrs Giles said, 'I'm a teacher, James is an electrician, we're in quite good jobs. It shouldn't be that hard.' Business rates relief will make 'a big difference'Name: Kyle HyamsAge: 33Based: Surbiton, southwest LondonJob: Coffee and gelato shop owner Kyle Hyams, his wife and three daughters pictured together in one of his gelato shopsKyle Hyams welcomes the small business rates relief announced in the Budget.He said the threshold increase from £12,000 to £18,000 giving 70,000 smaller firms a tax break will make 'a big difference'.He will now not be paying any business rates at his premises, which mainly comprise coffee and gelato shops across southwest London named after his daughters Aoife and Orla.But he noted that many business owners won't feel the benefit.He began making gelato in 2024 with the aim of growing it into a national brand, but his ambitions are hindered by high VAT payments and rising National Insurance and minimum wage.'Despite huge calls from the hospitality industry to reduce VAT rates to 10 per cent, there was no mention of this, which I find disappointing,' he said.While the announcement of a 3.9 per cent increase to the national minimum wage is great for employees, he said: 'This is another expense for business owners without the support needed to raise these funds.'He also felt there could be more support with energy bills for businesses.He said: 'Everything we're trying to do to grow is being hindered by the government and by the constant moving of goalposts.''No one wants to invest more when they're not guaranteed a return on it. I feel like they're [the government] sort of crushing the dreams of people who have got high aspirations for what they want to achieve.' 'We are definitely going to lose customers'Name: Jo Bevilacqua Age: 42Based: Orton Longueville, Peterborough Job: Hair and beauty salon ownerJo Bevilacqua, owner of Serenity Loves, an award-winning hair and beauty salon in Peterborough, said she will lose customers following the announcement of a 3.9 per cent increase to national minimum wage.'It is going to put added pressure on us without a shadow of a doubt,' she said. 'We're going to have to put our prices up which will possibly outprice customers. We're definitely going to lose customers.'Her business, which will turn 15 next March, has survived Covid, energy price shocks and the cost-of-living crisis.Now the 42-year-old, who employs 16 staff including six apprentices, is faced with tackling a further minimum wage increase after a string of extra business taxes under Labour since 2024 including higher National Insurance.'We're trying to invest in the next generation, but it is becoming increasingly difficult,' she said. Jo Bevilacqua in her hair and beauty salon, Serenity Loves, in PeterboroughTraining apprentices costs up to £15,000, and it takes four years before she sees a return on investment.She feels young people are desperate to find meaningful employment, but businesses are not being given the means to help them.'We had a paid six-week internship program last March, we had eight positions open and had 150 applicants.'Young people want to work and get their foot in the door, but businesses cannot afford to take them on.'She added that she was 'very underwhelmed' with the Chancellor's Budget, saying: 'They talk about backing businesses, but I don't see how they're doing that.'They talk about supporting new entrepreneurs but what about the other businesses that are trading right now?''Why are we considering taxing British people for choosing to holiday in Britain?' Name: Amanda Stecker Age: 59Based: London and Oxfordshire Job: Luxury holiday home letterAmanda Stecker owns and lets out six luxury cottages in the Cotswolds, but was dismayed to hear the introduction of the overnight visitors tax.It could mean tourists – including British holidaymakers – would have to pay 5 per cent tax on their overnight accommodation.But it seems like a backwards way to support local economies, Mrs Stecker said: 'Why are we considering taxing British people for choosing to holiday in Britain? At our cottages, 70 per cent of guests are British.'These are precisely the visitors who help keep local economies alive outside the peak tourist season.' Luxury holiday home letter Amanda Stecker in front of one of her cottages in the CotswoldsMrs Stecker began her business, Unique Cotswold Cottages, with one cottage eight years ago – buying cottages, doing them up and then letting them out to tourists.It has been a great success which has allowed her to expand to buy more cottages, but with rising costs, she is now having to postpone these plans.She said: 'I'd love to grow it more, but at the moment, I just can't do so, because the margins are too tight to have enough to pull together to purchase another cottage.'She explained where the extra costs had hit the business following hikes to the minimum wage and National Insurance contributions: 'Our housekeeping and laundry costs are going up by 17 per cent in December alone. That's just one of the many increases we're facing.'We can't keep absorbing these costs, but neither can we endlessly increase prices for our guests.'The renovation side of the business is also feeling the pinch as materials costs have shot up.Mrs Stecker said: 'We're already being squeezed by rising operating costs, and now there's talk of another tax on our guests. At what point do we start supporting British tourism rather than making it more expensive?''It feels incredibly unfair' Name: Charlotte OwenAge: 40Lives: Pudsey, LeedsJob: Freelance journalist Charlotte Owen and her two children Harriet and Sebastian with her husband AlexMother of two Charlotte Owen said middle-income families are 'feeling the squeeze' as income tax thresholds remain frozen.She said it 'feels incredibly unfair' that her husband Alex, 39, has just been 'tipped over' into a higher tax bracket in his new £54,000-a-year social care job he started in September.'You get higher tax, higher student loan payment and you feel like you're back to square one.'While the couple and their children Harriet, 3, and Sebastian, 5, do qualify for the £100 council tax relief, she said 'it will only go so far' while the cost of childcare, groceries and energy bills soar.Meanwhile, the scrapping of the gas standing charge is only due to save her £6 a month, she said.'They're not giving me any more money in my pocket or 'breathing space' as Healey suggested; they're just saying it's not going to be any more expensive until July'.Her experience as a self-employed freelancer has made life that much more difficult too. 'If I can't work, I don't earn,' she said, 'and I don't feel like there's a lot of help for self-employed people.'Mrs Owen said that for her and many other families in her position, parents often face a disincentive to work as more time on the clock means having to pay for more costly childcare.She explained: 'If I were to be self-employed and freelance for five days a week, could I guarantee that would earn enough to send them both to after-school clubs or nursery for five days a week and have enough money to pay other bills that are my responsibility? I'm not sure.'She said she and Alex had 'seriously thought about' having a third child, but sadly decided they could not afford to – 'We are already at our limit with two kids'. 'I've voted Labour all my life' but they've left me 'absolutely shattered'Name: Carrie CoxAge: 62Lives: Hove, East SussexJob: Florist Carrie Cox is a lifelong Labour voter but now feels 'absolutely shattered' and is reduced to tears by the burden placed on her beloved business.The 62-year-old welcomed a halt in having to pay her business rates, but said: 'There is nothing in that Budget that actually is going to save the high street.'She added: 'We're still squeezed from every direction with rising wages, employment costs, energy bills, rents, and making it increasingly difficult to keep the doors open.'I think they go after small businesses because we're the easy touch, because we, on our own, we can't fight back.'Fighting back tears, she worried for the future of her shop, Florian, in Hove.She said: 'I've voted Labour all my life, and I think for the first time ever, I just feel absolutely shattered by it.'To Mrs Cox, the increase to the minimum wage would not help young people in the working world as 'the cost is so minimally different to the living wage, and there are so many people that are trained who are looking for work. Carrie Cox was in tears worrying over the future of her flower shop Floria in Hove, East Sussex'You are better off employing somebody that's trained.' She said National Insurance contributions increases have meant that employers end up having to pay £16.50 an hour for those on minimum wage.On top of this, Labour-run Brighton and Hove Council has decided to make her shop's street, Western Road, a red route, meaning cars are unable to stop at all.She said this would ruin footfall, potentially removing at least 20 per cent of her shop's income.'They are encouraging active farmers to give up.' Name: James Bowditch Age: 49 Live: Bridport, West Dorset Job: Family dairy farmerWest Dorset dairy farmer James Bowditch said he was 'not overly surprised' the farming industry did not receive a mention in today's budget announcement.'I wasn't expecting anything, I wasn't expecting a golden ticket at all,' he said. 'They are encouraging active farmers to give up.''They weren't trying to poke the bear because they know farmers can cause quite a lot of chaos in a short amount of time.'Mr Bowditch, who owns 1,600 cattle across three farms totalling 1,500 acres alongside his family, added that inheritance tax, which failed to get a mention, is pushing the family away from farming.'In a long-term plan I've got to start saving up for a £200,000 tax bill. I've got to future proof myself and hope they don't change the goal posts again,' he said.'Every mayor gets some money, but every rural area doesn't get anything. We didn't get a mention. There's nothing for the farmer and nothing for the rural area.' James Bowditch and his family pictured on his farm surrounded by cattle and his two dogsFarms larger than 400 acres like his are vulnerable to more IHT due to Agricultural Property Relief.But Mr Bowditch said there are not many viable commercial farms producing the nation's food under that size.'They've gone after completely the wrong person. It feels like farmers actually producing food are getting both hands tied behind their backs. The rural economy is being paralysed.'Although he never previously felt the need to protest, Mr Bowditch drove his tractor to London and took part in the 2024 and 2025 farmers protests. 'Farmers don't like to be involved in politics, but we feel as though we are being drawn in,' he said.I can't retire at 68 but I still think this is a 'compassionate' BudgetName: Linda SouthallAge: 68Lives: CardiffJob: Building site cleaner WASPI Pensioner Linda Southall said the budget was 'compassionate' but has been unable to retire on her pension Pensioner Linda Southall will continue to face financial struggles but was able to describe John Healey's statement as a 'compassionate Labour budget for the people'.She is unable to retire, picking up a 'brain-dead job' as a cleaner on a building site to make ends meet, and has had to sell her house in Cardiff and move to a cheaper one in Pembrokeshire.She welcomed the income tax relief for the state pension, but a private pension of hers tips her over the edge, meaning she will have to pay £97 in tax.But she will still overall be up £391 a year up after the 3.9 per cent increase to her state allowance starting in April.Her private pension also means she is just £17 over the threshold for Pension Credit.Mrs Southall was happy to hear tariffs on 100 supermarket products would be lifted to ease grocery costs too after having to live on discounted and tinned food.She said: 'If I see a cheap offer, I'll just buy more beans, more peas, more whatever. So, I sort of forward plan that way. You shouldn't have to think of these things, but you do.''Any help from the government is appreciated by first-time buyers' Name: Layla PhilipsAge: 29Lives: Wymondham, NorfolkJob: Works in local government Recent first-time buyer Layla Phillips feels that measures in the Budget will help others like her get their foot on the property ladder.She bought her two-bed semi-detached home in Wymondham, near Norwich, with the help of the now scrapped lifetime Isa (LISA) in 2023.The LISA will be replaced by the First Time Buyer Isa in April 2029 and the Your First Home scheme – an equity loan – announced in the Budget from next year.Ms Phillips, 29, who purchased her property through shared ownership with a housing association, said the new scheme and Isa on offer were very different from the help she received.'It's a completely different scheme they announced. With shared ownership I got a smaller mortgage of £62,000 and I pay rent on the remaining 75 per cent.'She said the 20 per cent government equity loan could potentially work better but questioned whether it would be more affordable once the five-year interest-free period ends. Layla Phillips outside her two bedroom semi detached new build home she bouth through the LISA schemeMs Phillips also welcomed the cut to the 25 per cent penalty on homeowners who purchased their first home through the LISA scheme.'Scrapping the penalty would be a positive that has come out of the budget today,' she said. 'Any help from the government is appreciated by first time buyers.'The cost of living is so high and the property market so competitive, becoming a first-time buyer is incredibly difficult, she added.'There should be more affordable homes. With mine, there were only two properties under shared ownership and after one minute of the email notifying buyers that there was shared ownership they were gone.'The mansion tax is 'lunacy'Name: Francis FulfordAge: 74Lives: Great Fulford, DevonJob: Businessman and TV personalityFrancis Fulford was unhappy to hear no revision of the upcoming mansion tax on £2million homes.He owns and lives in the manor on his family estate at Great Fulford in Devon. His family has lived there for over 800 years across 26 generations, but despite the grandiose appearance, Mr Fulford said: 'I'm not rich, I'm asset rich, but I'm not rich in terms of income.'On hearing of the upcoming mansion tax that would levy an annual surcharge on properties worth £2million or more, he said simply: 'It's all lunacy.'He argued that the tax has added to a plethora of recent policy against wealthy people in Britain – like taxing non-doms, the reduction of stamp duty thresholds and increasing levies on businesses.'The mansion tax is yet another reason for them to f*** off,' Mr Fulford said, adding, 'It's GCSE economics, which, for some reason, nobody in the Labour Party or the Treasury seems to have ever done.' Francis Fulford outside his manor on the Great Fulford estate which has been in his family for more than 800 yearsHis particular situation with Great Fulford also brought light to issues with how the law will be defined and implemented.He said: 'We will argue that this house is valueless on its own.' This is because of the massive expense it takes to maintain – around £150,000 a year for the whole estate.The value lies in the 250 acres of land surrounding it, he said, but questioned whether this would be included in the tax.He added: 'If you put a tax on something, you immediately reduce the value,' further complicating which homes qualify.He suggested that it would cut 'more than half a million' from the value of every property it is levied on 'because people will build into it in anticipation of that tax rising in the future'.He added: 'The real danger with this particular tax is, like all taxes, they start low, but rise up,' and pointed to VAT starting at 10 per cent and now sitting at 20 per cent.The war on landlords is 'marching us to the gates of hell' Name: Paul JarvisAge: 42Lives: StaffordJob: Landlord Paul Jarvis said he is selling up his three properties after Labour levied an extra 2 per cent on his income from lettingPaul Jarvis says Labour's war on landlords is 'marching us to the gates of hell' and will 'cause a housing crisis' after the Budget announced income from properties was to be taxed an extra 2 per cent.Following on from the additional 2 per cent previously levied by Labour, this means he will now have to pay 24 per cent income tax – rather than the standard 20 per cent basic rate – on the rent received from his three properties in Stafford.Mr Jarvis has decided he will sell them all because 'it's too much hassle for what it's worth now'.He said: 'I've had to put one of my rents up £150 a month, which I don't really like doing. Surely they can see that it's just been passed to the tenant. You're not gonna absorb everything.'Mr Jarvis used to fit truck tyres in Birmingham, but after 19 years in the property business, he said he'd now prefer putting his money 'under the sofa'.One of his three tenants has stopped paying rent for two months already, and other recent legislation could mean he loses out on more than a year of payments from the renter if the matter goes to court.'It's literally every six months they're attacking landlords,' he said as he railed against the Renter's Rights Act, the landlord register and now this tax increase, labelling them 'just a money bank for the government'.Mr Jarvis was desperate for these regulatory pressures to be reversed, but said in resignation: 'They ain't gonna help us are they?'However, he was glad to see proposals of increases to capital gains tax dropped ahead of the sale of his houses.A cut, not just a freeze, to fuel duty is 'absolutely necessary'Name: Rhys HacklingAge: 48Lives: Job: Managing Director of Direct Connect Logistics Rhys Hackling, managing director of Direct Connect Logistics, pictured with two lorriesRhys Hackling said an actual cut to fuel duty rather than a mere freeze was 'absolutely necessary' for hauliers like himself.The managing director of Bicester-based firm Direct Connect Logistics explained that following the fuel duty freeze, 'it still feels like we're being penalised'.'We would have liked to see a reduction in the cost of diesel. For the public it's nice to have fuel reductions but for businesses like ours which are paying £24,000 more per month on fuel it's vital,' he said.Since the start of the Ukraine-Russia war, diesel has risen more than 30 per cent at the pumps, having increased from around £1.30 to £1.90 per litre.But Mr Hackling said hauliers don't have a choice about using diesel adding: 'There is no other form of fuel we can use.'He issued a 'thank you' to the Chancellor for not increasing fuel duty, but said it was 'absolutely necessary' to go further.He added: 'I would have also liked to have seen more about infrastructure in the Budget, but it was a little bit of a quiet Budget if I'm honest.'Join the discussionAre rising taxes and tighter budgets making life harder for working families and small businesses?What's your view?Healey has launched yet another spiteful attack on the prudent – why I fear this is just the calm before the storm, says JEFF PRESTRIDGEANDREW NEIL: Labour believes in deficit reduction on the never-never. The more Healey talked of prudence, the more we noticed his profligacy...READ MORE: Benefits? The bill's UP by £5bn a year: As Tories say UK 'addiction to welfare spending is alive and kicking', Healey vows he'll cut cost 'in a Labour way' SARAH VINE: It's obvious Healey's a decent fellow, but Kemi was in full attack mode. This wasn't going to be pretty READ MORE: Healey hammers struggling workers, savers and landlords to fund energy bailouts as tax burden heads to new record high - but benefits escape cuts ALEX BRUMMER: Healey has shrunk in cowardice from the hard but necessary choices. We will all pay a price for his warped priorities READ MORE: Hospitality industry hails 'first positive Budget in years' - but warned other costs are still harming the high streetThis Budget had the cha-cha-cha of siesta hour in a Mexican town. Lower your sombreros - Hombre Healey's a snoozer: QUENTIN LETTS READ MORE: Struggling workers will pay an extra £17billion of income tax by the end of the decade through 'stealth raids'