Pensioners are the big losers from Jeremy Hunt’s Budget amid falling living standards and stagnating growth, according to a think tank.
The Resolution Foundation’s analysis came after Wednesday’s budget left the door open for more pre-election financial giveaways after delivering another 2p cut in national insurance.
Mr Hunt spent around £10 billion on cutting national insurance, described by commentators as a move to “sweeten the Government’s electoral pitch” on top of a similar cut in November.
But the Resolution Foundation said the Budget threw “fiscal caution to the wind”, according to its chief executive Torsten Bell.
“A pre-election Budget produced another round of pre-election tax cuts,” he said. “Who could have seen that coming?
“To deliver them, the Chancellor has continued to throw fiscal caution to the wind, cutting his fiscal headroom to just a third of the average level seen since 2010.
“He would fail to meet three out of the four sets of fiscal rules used by his Conservative predecessors since 2010.”
The think tank said this is the first parliament in modern history set to see a fall in living standards with real household disposable income to fall by 0.9%.
Mr Bell said it has been a “frenetic few years” for tax policy with several rises and cuts in tax with middle earners coming out on top.
“The biggest group of losers are pensioners, who face an £8 billion collective hit,” Mr Bell added.
“Looking at all policy changes announced this parliament reinforces the sense that the Government has reversed course from the approach that dominated during the 2010s.
“This time it is those aged over 65 and on the highest incomes who are set to lose most.”
Mr Bell said while Budgets are a big day for Westminster, the “big picture” for Britain has not changed as it stays a nation where taxes rise and incomes “stagnate”.
“Big tax cuts may or may not affect the outcome of that election, but the task for whoever wins is huge,” he said.
“They will need to both wrestle with implausible spending cuts and also restart sustained economic growth – the only route to end Britain’s stagnation.”