Keir Starmer accused the Conservatives of turning Britain back into the “sick man of Europe” in a budget response that attempted to focus attention on to the Tories’ economic record over the past 13 years.
The Labour leader attacked the government for presiding over more than a decade of economic stagnation and low wages, with the Office of Budget Responsibility still forecasting the biggest drop in living standards since records began.
“Like millions across our country, this budget leaves us stuck in the waiting room, with only a sticking plaster to hand,” said Starmer. “A country set on a path of managed decline, falling behind our competitors; the ‘sick man of Europe’ once again.”
He said the UK had experienced “13 years without wage growth, 13 years no better off, 13 years stuck in a doom-loop of lower growth, higher taxes and broken public services”.
Starmer’s focus on the broader economic outlook reflected the overall tone of the House of Commons response to the budget.
MPs praised or complained about individual items, but there was not the shocked outrage over the entire package that characterised the response to Kwasi Kwarteng’s mini-budget just six months ago.
Some of Starmer’s heaviest criticism was aimed at the budget’s biggest surprise measure – the abolition of the lifetime pension tax allowance, which will benefit anyone who can build a pension pot of more than £1m.
“[The chancellor] made a big spending commitment which will benefit those with the broadest shoulders when many people are struggling to save into their pension,” Starmer said. “We need a fix for doctors but the announcement is a huge giveaway to some of the very wealthiest.”
Other Labour MPs were more upset by what was not in the budget than what was in it. Meg Hillier, chair of the public accounts committee, said: “This doesn’t even go into the issues for ‘generation rent’ in the private rented sector. This government has absolutely ripped up the opportunity for people to have a safe and stable home.”
Seema Malhotra, the shadow business minister, called the measures a “missed opportunity” for not setting out more of an industrial strategy. “We needed to see a strong serious industrial policy framework for the long term,” she said. “But today’s budget did not even come close.”
The most vociferous complaints on the Conservative side came from those who had campaigned publicly for Hunt to reverse the planned rise in corporation tax.
Jacob Rees-Mogg, the former business secretary, said the plans to offer businesses tax relief on their capital investments did not make up for the jump in overall corporation tax from 19% to 25% “What you want is low rates rather than distorting investment to make it go in the way that the government thinks is fashionable,” he told the Commons.
Neither Liz Truss, the former prime minister, nor her chancellor, Kwasi Kwarteng, were in the chamber to see their legacy being further dismantled. But some of their allies were there to defend Truss and Kwarteng’s plans.
Ranil Jayawardena, the founder of the pro-Truss Conservative Growth Group, welcomed the extra money for free childcare but said it would have been better spent giving it straight to parents instead. “Taxes are at a 70-year high and I would contend that choice is a missing part of the equation,” he said. “Instead of the government dictating how many hours of free childcare and who from in the years ahead, what about moving to a system of tax reliefs so that parents can pay for the childcare they want from whom they want?”
Most Tory MPs, however, welcomed the overall package, with many expressing relief that the market chaos sparked by last September’s announcement appeared to have abated.
Harriett Baldwin, the Conservative chair of the Treasury select committee, said: “I want to start by saying how lucky we are to have a lucky chancellor”, pointing out how much the government had saved thanks to lower than expected energy costs.
But she added: “He has made some of his own luck because thanks to the steps that he took, the financial markets have stabilised and he has had to pay less in interest than he was expecting to – about £4bn.”
