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Jeremy Hunt’s budget leaves household incomes stagnant and people paying higher taxes despite cuts to public services, the Resolution Foundation has said.

The think tank, which aims to improve the standard of low and middle-income families, said the chancellor had announced an “impressively broad suite of policies” to encourage more people into work.

However, it said: “Britain’s economy remains stuck in a deep funk – with people supported into work but getting poorer, and paying more tax but seeing public services cut.”

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Here are the key findings of the Foundation’s budget analysis.

Beating the odds on a recession

The UK is forecast to have gone through “the biggest energy and inflation shock since the 1970s, while avoiding a recession, with unemployment peaking at just 4.4%,” the Foundation said.

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It compared it to the mid-1970s energy shock which saw a recession with a 3.9 peak-to-trough fall in GDP.

A decline in living standards

However, RF pointed to a “disastrous decline in living standards”, with typical real household disposable incomes on track to remain lower by the end of the forecast in 2027-28 than they were before the pandemic.

“If even the slow growth of the past decade had continued, incomes would still be £1,800 higher than currently projected for 2027-28,” it said.

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Key moments from Hunt’s first budget

Taxes on track to hit 70-year high

RF said taxes as a share of GDP are on track to hit 37.7% by the end of the forecast, a 70-year-high and a 4.7% increase since 2019-20, the equivalent to nearly an extra £4,200 for every UK household.

It said despite this the chancellor only has a quarter of the average fiscal headroom of his three predecessors and would not meet the fiscal targets set by Rishi Sunak, Philip Hammond or George Osborne when they were chancellor.

Help for parents

The analysis notes the budget includes the biggest increase in childcare support on record, which it said would encourage more parents to work and make it worthwhile for many to work longer.

RF said under the current childcare system, a single parent of a one-year-old earning the National Living Wage would see their income fall after childcare costs by £370 if they moved from 25 to 35 hours of work a week.

However under the new system the same single parent would receive an income boost of £700.

However, RF said the richest fifth of households are set to gain £180 on average from the extra childcare entitlement, compared to £130 for the middle fifth of households and £20 for the bottom fifth.

More on Budget 2023:
The key points of the budget at a glance

‘An unneeded tax break for wealthy pension savers’

The report was critical of the chancellor raising the annual allowance and scrapping the lifetime allowance for tax-free saving, which it said cost around £1.2bn and were expected to increase employment by 15,000 – a cost of around £80,000 per extra worker.

However, the Foundation said “even those employment gains may be overstated, given that giving very large wealth boosts will actually encourage some people to retire earlier than they otherwise would have done”.

It said someone with a £2m pension pot will have received a tax cut of almost £250,000.

Austerity

RF said the chancellor had chosen to “ignore pressures on public services”, even though unprotected departments face 10% cuts to real day-to-day spending per capita by the end of the budget, raising to 14% if the newly announced aspiration to raise defence spending to 2.5% of GDP is met over the next parliament.

An investment ‘roller-coaster’

The Foundation said the £28bn three-year increase in investment allowances represents the fifth major corporate tax change in two years, which it said illustrated “the lack of certainty that has frustrated businesses”.

It said: “The policy will deliver a temporary 3% boost to investment, when what Britain actually needs is a permanent 30% boost to catch up with our competitors (France, Germany and the US).”

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‘UK’s underlying challenges remain largely unchanged’

Torsten Bell, chief executive of the Resolution Foundation, said: “Jeremy Hunt’s first budget was a much bigger affair than many expected, combining improvements to the dire economic and fiscal outlook with a significant policy package aimed at boosting longer-term growth in general, and the size of the workforce in particular.

“A step change in childcare support stands out.

“But stepping back, the UK’s underlying challenges remain largely unchanged.

“We are investing too little and growing too slowly. Our citizens’ living standards are stagnant. We ask them to pay higher taxes, while cutting public services.

“No one budget could turn that around, but it’s time Britain did.”

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Man charged with 11 counts of attempted murder over mass train stabbing and another attack at station hours earlier

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Man charged with 11 counts of attempted murder over mass train stabbing and another attack at station hours earlier

A 32-year-old man has been charged with 10 counts of attempted murder after a mass stabbing on a high-speed train.

Anthony Williams, 32, from Peterborough, was arrested on Saturday evening following an attack on the Doncaster to London King’s Cross LNER service.

He has been charged with 10 counts of attempted murder, one count of actual bodily harm and one count of possession of a bladed article following a knife attack on a train in Cambridgeshire on Saturday, British Transport Police (BTP) said.

BTP said he has also been charged with another count of attempted murder and possession of a bladed article in connection with an incident on a London train in the early hours of 1 November.

Police said a victim suffered facial injuries after being attacked at 12.46am with a knife on a train at Pontoon Dock station on the Docklands Light Railway (DLR) in east London.

In a statement to Sky News, BTP said the suspect had left the location before police arrived and officers subsequently identified Williams as a suspect.

Williams will appear at Peterborough Magistrates on Monday morning, police said.

Armed police were deployed to Huntingdon, Cambridgeshire, where the train was stopped and made the arrest within eight minutes of the first 999 call.

Forensic teams gathering evidence at Huntingdon train station on Sunday, after a mass train stabbing. Pic: PA
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Forensic teams gathering evidence at Huntingdon train station on Sunday, after a mass train stabbing. Pic: PA

Footage of the arrest has emerged, showing a man on the ground surrounded by officers and a barking police dog, with the sound of a Taser being deployed.

Another man, 35, from London, who was also detained, was later released after officers established he was not involved.

On Monday, Transport Secretary Heidi Alexander told Sky News that one man, originally suffering life-threatening injuries, was now in a critical but stable condition in hospital.

She told Mornings with Ridge and Frost programme: “He went in to do his job, and he left work a hero. And there are people who are alive today because of his actions and his bravery.”

On Sunday, British Transport Police (BTP) confirmed he was a member of LNER rail staff who tried to stop the attacker.

“Having viewed the CCTV from the train, the actions of the member of rail staff were nothing short of heroic and undoubtedly saved people’s lives,” said BTP Deputy Chief Constable (DCC) Stuart Cundy.

The train driver, named as Andrew Johnson, has also been hailed as “courageous” for his actions during the stabbings.

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Following the announcement about the charges on Monday, DCC Cundy warned against anyone interfering with their ongoing investigation.

“Our investigation is also looking at other possible linked offences. Following the charges authorised by the Crown Prosecution Service (CPS) I would stress the importance of not saying or publishing anything which might jeopardise or prejudice ongoing criminal proceedings, or the integrity of the investigation.”

Ms Alexander also told Sky News that BTP would be “increasing the visible patrols at stations” over the next few days.

“But generally, our trains are some of the most safest forms of public transport anywhere in the world,” she added.

Armed police officers on patrol at St Pancras International station on Monday morning. Pic: PA
Image:
Armed police officers on patrol at St Pancras International station on Monday morning. Pic: PA

Tracy Easton, chief crown prosecutor for CPS Direct, said: “Our team of out-of-hours prosecutors worked to establish that there is sufficient evidence to bring the case to trial and it is in the public interest to pursue criminal proceedings.

“We worked closely with British Transport Police to review a huge volume of evidence including CCTV. The number of charges will be kept under review as this continues to progress.

“We know the devastating impact the events on Saturday’s train has had and how the incident shocked the entire country. Our thoughts remain with all those affected.”

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Pregnant British teenager held on drugs charges freed from Georgian jail

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Pregnant British teenager held on drugs charges freed from Georgian jail

A pregnant British teenager has been released from jail in Georgia after being held on drug smuggling charges.

Bella May Culley, 19, of Billingham, County Durham, was arrested in May at Tbilisi Airport and accused of attempting to smuggle 12kg of marijuana and 2kg of hashish into the country.

She was found guilty by a Georgian court on Monday and sentenced to five months and 25 days in prison, the total time she had already spent in custody. Her family also paid a 500,000 lari (about £138,000) as part of a plea deal aimed at reducing her sentence.

Culley and her mother, Lyanne Kennedy, both cried as the verdict was read.

Wearing a cream blazer, the teenager looked overwhelmed as she was released from custody on Monday.

Asked how she felt, she said she was “happy” and told reporters she did not expect to be freed.

Bella Culley at an earlier court hearing in May. Pic: RUSTAVI 2/AP
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Bella Culley at an earlier court hearing in May. Pic: RUSTAVI 2/AP

Culley’s mother held her daughter’s hand as she was released.

Georgian prosecutors were considering a two-year sentence, but “decided to consider the time she has already served,” case prosecutor Vakhtang Tsalughelashvili told The Associated Press.

Culley’s lawyer, Malkhaz Salakhaia, said she would be given her passport and would be free to leave the country on Monday.

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Police footage released in May showed Culley in handcuffs as she made an initial court appearance. Pic: AP

The teenager pleaded not guilty to the charges after her arrest, saying she was tortured in Thailand and forced to carry the drugs.

Culley initially pleaded not guilty at a hearing in July to possession and trafficking illegal drugs.

She initially faced a maximum penalty of up to 15 years or life imprisonment, but was in talks with prosecutors about a potential plea bargain.

Bella Culley walks with her mother, Lyanne Kennedy, following her release. Pic: Reuters
Image:
Bella Culley walks with her mother, Lyanne Kennedy, following her release. Pic: Reuters

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In Georgia, a nation of 3.7 million in the South Caucasus, the law allows for financial plea agreements that can be reached to reduce or eliminate a prison sentence in certain cases.

Such plea agreements are often obtained in drug-related cases.

Culley was reported missing in Thailand before her arrest at Tbilisi Airport on May 10.

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Sole survivor of Air India crash tells Sky News the trauma ‘broke’ him

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Only survivor of Air India Flight 171 crash tells Sky News the trauma 'broke' him

The sole survivor of the Air India crash that killed 241 people on board has told Sky News he has been “broke down” by the trauma.

Air India Flight 171 crashed into a building just after take-off in Ahmedabad, Gujarat, on 12 June, with Briton Viswashkumar Ramesh the only passenger who walked away from the wreckage.

In an interview with Sophy Ridge on the new Mornings with Ridge and Frost programme, Mr Ramesh faltered, stumbled and regularly lapsed into long silence as he tried to recall the day.

Warning: This article contains details some may find distressing

Mr Ramesh, 40, was in the now-fabled seat 11a, which was located next to an emergency door that he managed to climb out of after the Boeing 787 Dreamliner crashed.

Smoke rises from the wreckage. Pic: Reuters
Image:
Smoke rises from the wreckage. Pic: Reuters

His younger brother, Ajaykumar, seated in a different row on the plane, could not escape.

Months on, Mr Ramesh wanted to share the impact of that day in an attempt to try to regain control of his life – and to pressure Air India into addressing the catastrophic effect of the crash on him and his family.

But it is clearly traumatic to talk about.

“It’s very painful talking about the plane,” he says softly.

Asked by Ridge if he can speak about what happened on board, he falls silent.

Just after the crash, from his hospital bed, Mr Ramesh told cable news channel DD India “there were bodies all around me” when he stood up after the crash. A further 19 people had been killed on the ground.

In hospital, he was still pleading for help in finding his brother.

“How is your life now?” Ridge asks.

He says the crash has left him feeling “very broke down”, adding it’s much the same for the rest of his family.

He does not leave the house, he says, instead sitting alone in his bedroom, doing “nothing”.

“I just think about my brother,” he adds. “For me, he was everything.”

He says he still cannot believe Ajaykumar is dead – but that’s as much as he can bring himself to say about him.

Ridge acknowledges the contrast between Mr Ramesh’s own survival – “a miracle” – and the “nightmare” of losing his brother.

It echoes the sentiment of Mr Ramesh’s other brother, Nayankumar, who told Sky News in June: “I’ve got no words to describe it. It’s a miracle that he [Viswashkumar] survived – but what about the other miracle for my other brother?”

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Nayankumar speaking to Sky News in June

Mr Ramesh says he is still suffering physical discomfort too, dealing with knee, shoulder and back pain, along with burns to his left arm. His wife, he says, has to help him shower.

He and his wife live in Leicester with their four-year-old son, Divang.

“I have a four-year-old, so I know what four-year-olds are like,” Ridge says. “They’re a handful but they can bring a lot joy as well. How has he been since the tragedy happened?”

Mr Ramesh says Divang is “okay” but, with his eyes lowered, adds: “I’m not talking properly with my son.”

“Does he come to your room?” Ridge asks.

He shakes his head.

Mr Ramesh was joined by Leicester community leader Sanjiv Patel and his adviser and spokesperson Radd Seiger for support as he spoke to Ridge.

“Sophy… this is an important question that you’re asking,” says Mr Seiger.

“You’re a parent, I’m a parent, and we all know that being a parent is a privilege, isn’t it? But it takes a lot of energy… you need to be in a good place to be a good parent, to have that from the moment they wake up to the moment they go to bed.

“You need to be in a good place and we can all see… he’s [Mr Ramesh] been robbed of that and I think it’s just a chore for him to just get through the day, let alone be a husband, be a father.”

What’s next for the crash’s sole survivor?

Mr Seiger and Mr Patel say the list of what he needs to get his life back on track is “endless” but that it starts with “practical things” such as financial support.

Mr Ramesh and Ajaykumar used “all their savings” to set up a fishing business in India, which saw them frequently flying there together from the UK.

The business has stopped running since the crash, meaning Mr Ramesh’s extended family in both the UK and India has no income, according to Mr Patel.

For them, it amounts to an “existential threat”, he adds.

Police officer standing in front of Air India aircraft wreckage after crash near Ahmedabad airport. Pic: Reuters
Image:
Police officer standing in front of Air India aircraft wreckage after crash near Ahmedabad airport. Pic: Reuters

They say Air India has offered Mr Ramesh a flat interim payment of £21,500 – a one-off sum given to a claimant in advance of reaching the end of a personal injury claim.

A spokesperson for Tata Group, Air India’s parent company, told Sky News that Mr Ramesh had accepted the payment and that it had been transferred to him.

But Mr Seiger says the sum “doesn’t even touch the sides” when it comes to everything Mr Ramesh needs while he is unable to work or leave his home – from help with transporting his son to school, to food, to medical and psychiatric support.

They are petitioning for more than just cash payments, which they suggest reduces Mr Ramesh to “a number on a spreadsheet”.

Rather, they want Air India’s chief executive Campbell Wilson to meet with him, his family and the families of other victims in the crash, to hear about their struggles and “talk as humans”.

Mr Patel said: “Meet the people. Understand what they’re going through. Relying on bureaucratic machinery to deal with real lives [of people] who are going through real trauma – the pain of that, the financial consequences – that is the day-to-day – how lives have been destroyed, and not just the immediate family, but extended families too.”

A fire officer stands next to the crashed aircraft. Pic: Reuters
Image:
A fire officer stands next to the crashed aircraft. Pic: Reuters

A spokesperson for Air India told Sky News: “We are deeply conscious of our responsibility to provide Mr Ramesh with support through what must have been an unimaginable period. Care for him – and indeed all families affected by the tragedy – remains our absolute priority.

“Senior leaders from across Tata Group continue to visit families to express their deepest condolences. An offer has been made to Mr Ramesh’s representatives to arrange such a meeting, we will continue to reach out and we very much hope to receive a positive response.

“We are keenly aware this continues to be an incredibly difficult time for all affected and continue to offer the support, compassion, and care we can in the circumstances.”

Mr Patel also claims the UK government took away Mr Ramesh’s family’s Universal Credit after they went to India following the disaster.

Read more:
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Plane suffered ‘no mechanical fault’ before crash

According to the government’s website, those receiving Universal Credit can continue to do so if they go abroad for one month. This can be extended to two months if “a close relative dies while you’re abroad and it would not be reasonable for you to come back to the UK”, it states.

They are calling on Prime Minister Keir Starmer to look into the family’s circumstances and pressure Air India into doing more to help.

Mr Patel appeals to him, saying: “Take action today. If this was your family, what would you do? And if you understand that, you’ll know what to do.”

He suggests the UK government can also be doing more directly to help families in Britain who have been “devastated” by the crash.

“So while we wait for Air India to do what’s right, there’s what the UK authorities and the system can do as being right to serve the citizens in support during this tragic time,” he adds.

The Department for Work and Pensions told Sky News: “Our thoughts remain with the loved ones affected by this devastating tragedy.

“Our policy ensures people travelling abroad due to a bereavement can continue receiving Universal Credit for up to two months, rather than the standard one-month limit. Those who are abroad for longer periods would not be able to continue receiving the benefit.

“People can make a new claim once they return to the UK. This approach strikes a balance between our commitment to ensuring people get the support they need and our duty to the taxpayer.”

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