Brits have been warned “we just got a lot poorer” with those on middle-incomes “set for a shock” after Jeremy Hunt delivered his brutal Autumn Statement.
The stark warning from the respected Institute for Fiscal Studies think-tank came after the Chancellor was accused of a raid on millions of workers with stealth tax hikes.
After the Office for Budget Responsibility warned that living standards will be down by 7% – the biggest drop since 1956 – the IFS stressed: “This will hit everyone”.
In their post-Budget analysis, director Paul Johnson said: “It will be those on the middling sorts of incomes who feel the biggest hit.
“They won’t benefit from the targeted support to those on means-tested benefits. Their wages are falling and their taxes are rising. Middle England is set for a shock”.
He stressed that he would be “most surprised” if the tax burden gets down long-term pre-Covid average at “any time in the coming decades”.
“Higher taxes look to be here to stay,” he said.
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JESSICA TAYLOR/ UK PARLIAMENT/UNPIXS)
The IFS also warned that public sector workers cannot expect real terms pay rises unless there are large-scale job losses in public services.
Presenting the think tank’s analysis of the autumn statement, Mr Johnson said public pay setting will remain one of the “biggest challenges” facing the Government.
“It remains the case that Government will not be able to fund pay rises that anywhere near match inflation from within planned spending totals unless there is a big loss of jobs.”
In his concluding remarks, Mr Johnson said the country was “reaping the costs of a long-term failure to grow the economy, the effects of population ageing, and high levels of pass borrowing”.
He added: “After years of stagnation household incomes are set to fall and then recover only gradually, while taxes rise and public services continue to struggle.
“The truth is we just got a lot poorer. We are in for a long, hard, unpleasant journey; a journey that has been made more arduous that it might have been by a series of economic own goals.
“Mr Hunt appears to have recognised this. After years of cakeism, his colleagues, the opposition, and we the voters need to take that fact on board too.”