Rachel Reeves has been warned her Budget will lead to "truly dismal" living standards, as economists issue a damning verdict.
The Budget, announced on Wednesday, will leave workers thousands of pounds worse off by stealth taxes, experts have said.
Living standards are expected to stagnate, while average disposable income is to rise by just 0.5 per cent over each other next five years, representing the second-lowest growth in living standards on record.
Average disposable income is the measure of people’s earnings after tax.
The Chancellor announced £30 billion of tax rises, including a three-year freeze in income tax thresholds that will raise £12.7 billion. It means that 10.6 million people will be paying a higher rate of tax by the end of the decade.
And people continue to accuse Ms Reeves of breaking fundamental manifesto pledges.
The Institute for Fiscal Studies (IFS) have said that rises in national insurance, including a further tax on pension contributions, demonstrate a clear breach of Labour’s manifesto pledge not to increase taxes on working people.
Helen Miller, director of the IFS, said: "Before this budget the UK was faced with lacklustre economic growth, stagnating living standards, and a dizzying array of fiscal pressures.The same is still true after this budget."
She also added that stagnating living standards were "truly dismal" when compared with the 1980s and 2000s.
Polling by YouGov also suggested that almost six out of 10 voters thought that the Chancellor has broken the manifesto pledge, including almost half of those who voted Labour at the last election.
Just nine per cent thought that they would be better off as a result of the changes announced on Wednesday, while only one in ten thought Ms Reeves was doing a good job as Chancellor.
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Cabinet minister says 'very real prospect' Employment Rights Bill would have been delayed without U-turn
Cabinet minister Bridget Phillipson said there was a "very real prospect" the implementation of the Employment Rights Bill would have been delayed if the Government had not made a U-turn over day one protections against unfair dismissal.
The Education Secretary told Sky News: "The Employment Rights Bill is the biggest upgrade to workers’ rights in a generation.
"There has been discussion on the point around unfair dismissal and the time period between businesses, the TUC and Government, and following that discussion there’s been agreement about the way forward, which is welcome.
"It means that the time limit will come down from two years to six months, and that runs alongside important day-one rights around sick pay and around parental leave. But the risk here was that if we didn’t make progress, those important rights wouldn’t come into force from April next year."
Ms Phillipson then insisted that it was not an example of a broken manifesto promise.
"In the manifesto, what we said was that we would work with trade unions, with business, with civil society, in consulting on those protections that we’d be bringing forward," she added.
"So, there are both parts to that, within the manifesto, the important rights and the consultation."
Sir Keir Starmer facing pressure after accusations of second manifesto breach
Sir Keir Starmer facing pressure after accusations of second manifesto breach
|PA
Sir Keir Starmer is facing pressure after accusations of two manifesto breaches in as many days as the party abandoned plans to give workers day-one protection against unfair dismissal.
It comes a day after Chancellor Rachel Reeves confirmed an extended freeze on income tax thresholds - something that has been viewed as a clear breach of Labour’s manifesto pledge not to increase taxes on working people.
Ministers have axed the proposal to cut the "qualifying period" for workers to make an unfair dismissal claim from 24 months to the first day in a new job, in a bid to get the legislation through Parliament.
The Government now intends to introduce the right after six months of service instead.
Business Secretary Peter Kyle denied claims on Thursday that it was a breach of Labour's manifesto, rather a compromise instead, adding that "it’s not my job to stand in the way of that compromise".
Labour MP for Middlesbrough and Thornaby East, Andy McDonald, branded the move a "complete betrayal" and vowed to push for its reversal.
He said that "we cannot support that halfway measure" adding that it is "a wrong-headed move" that he will "campaign to have reversed."
Meanwhile ex-employment minister, Justin Madde, said: "It might be a compromise. It might even be necessary to get the Bill passed. But it most definitely is a manifesto breach."
Labour MP tells GB News benefit claimants WON'T be encouraged to have more children after two-child cap axed
Labour MP tells GB News benefit claimants WON'T be encouraged to have more children after two-child cap axed
|GB NEWS
People on benefits will not be incentivised to have more children after Rachel Reeves scrapped the two-child benefits cap, a Labour MP has claimed.
Gordon McKee, MP for South Glasgow, said the Chancellor's decision to lift the cap 16 months after seven of his colleagues were suspended for backing it was part of the Government's "moral mission".
He was speaking to Chopper's Political Podcast after posting a video using custard creams and bourbon biscuits to illustrate the UK's debt crisis, which went viral on social media with millions of views.
Asked by Political Editor Christopher Hope if it would incentivise Britons with two children on benefits "to have a third or fourth or fifth", Mr McKee replied: "I don't think people are having kids because they're getting extra benefits. I just don't believe that. What I do believe is some kids have been kept in poverty. And because of the decision yesterday from Rachel [Reeves], half a million kids are no longer going to be in poverty."
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