‘Scattergun’ budget will still leave Britons facing higher energy bills, says thinktank

A “scattergun budget” is a package that fires support in many directions without concentrating enough help on the people who need it most. The Resolution Foundation uses the phrase because it judged John Healey’s measures poorly targeted and insufficient to meet Britain’s sharp cost-of-living pressures.

The clearest example is the distribution of energy support. The poorest half of households were expected to gain £158 on average this year and next. The richest half would receive £144, only £14 less. The foundation called this a “complete failure to target help at those who need it most”.

The criticism matters because the budget was meant to provide “breathing space” during rising prices and global economic turmoil. Yet typical disposable incomes were predicted to fall by £1,050 by 2028-29. The foundation warned that a more dramatic change of tactics may be needed, with future choices between public services and household incomes becoming starker.

The budget introduced two main measures to reduce household energy costs. First, it planned to scrap standing charges on gas bills. These are fixed charges that households pay regardless of how much gas they use. Second, it offered £100 energy payments to up to 20 million households in council tax bands A to D.

The measures were designed to cushion households from rising inflation and provide what Healey called “breathing space”. The council tax-linked payment means support is distributed according to the property’s band. Andy Burnham described the plan as bold because it would help 20 million households with energy costs this winter.

The Resolution Foundation still criticised the approach. It said the help was spread too widely and relied on 35-year-old property valuations rather than directly identifying households in greatest need. Even families receiving support were expected to face higher energy bills than during the last energy price shock.

The poorest half of households were expected to receive an average gain of £158 from the cost-of-living measures this year and next. The richest half were expected to gain £144. The figures show that the support was not strongly concentrated among households with the least money.

The difference between the two groups is £14. That is calculated by subtracting £144 from £158. In practical terms, the poorest half would receive only slightly more help than the richest half, despite facing greater pressure from rising living costs.

The Resolution Foundation used this small gap to attack the budget’s design. Ruth Curtice called it a “complete failure to target help at those who need it most”. The foundation argued that support was being spread too thinly, leaving families who received assistance facing higher energy bills than during the previous energy price shock.

The “last energy price shock” means the earlier period when energy costs rose sharply, but the article does not identify it by name or give its dates. That omission matters because the comparison is central to the foundation’s criticism of the new support. Readers are told the current measures do not fully restore households’ position.

The Resolution Foundation said energy bills would remain higher this year than during the last energy shock, even after the government’s measures. It also said that families receiving help would still face higher bills than they did during that earlier period. The article gives no precise bill amounts for either period.

The comparison suggests that discounts and payments soften the increase rather than reverse it. Healey presented the budget as protection from rising inflation amid global economic turmoil. The foundation’s assessment was more pessimistic: support would leave households with limited breathing space, while typical disposable incomes were expected to fall by £1,050 by 2028-29.

Government help can reduce what households pay without making energy as cheap as it was before. If the underlying cost of gas and electricity has risen sharply, a discount or fixed payment only covers part of the increase. Bills can therefore remain higher even after assistance is applied.

The article gives two examples: scrapping standing charges on gas bills and providing £100 payments to eligible households. These measures lower costs or add support, but they do not guarantee that the final bill will fall below its earlier level. The foundation said even supported families would face higher bills than during the last energy price shock.

This limits the budget’s effect on living standards. The measures may provide some breathing space, but the Resolution Foundation said support was spread too thinly. It predicted that typical disposable incomes would fall by £1,050 between now and the end of the parliamentary term in 2028-29.

Council tax bands make property category the main test for energy support. That is a blunt measure of need because households in similarly valued homes can have very different incomes, savings, family sizes and energy pressures. A property-based system may therefore include some better-off households while missing others facing serious hardship.

The budget offered £100 energy payments to households in council tax bands A to D. The Resolution Foundation said this left the UK relying on property valuations that are 35 years old. The key mechanism is simple: eligibility follows an old valuation band rather than a current assessment of household resources.

This makes the support broad but poorly targeted. It helps many households, but the foundation said the poorest half gained only £14 more than the richest half on average. The approach could leave support spread too thinly, while energy bills remain higher than during the last energy price shock.

Inflation raises household costs and makes it harder for living standards to improve. Economic growth determines how much the economy and incomes can expand. When growth slows, governments have less room to support households without increasing taxes, borrowing or cutting other priorities. These pressures interact rather than operating separately.

The article says the first half of the parliament brought rising living standards, solid growth and extra public-service funding, but huge tax rises helped fund that progress. The budget watchdog then cut its forecast for GDP growth next year. At the same time, typical disposable incomes were projected to fall by £1,050 by 2028-29.

This creates a difficult trade-off. More public-service spending may require higher taxes or leave less support for household incomes. More help for households could limit room for services or require further revenue. The Resolution Foundation said the government had not shown how it would choose between those ambitions, and that next year’s choices would become unavoidably starker.