Today is Budget Day in the UK, and Chancellor John Healey is preparing to deliver his first Budget for Andy Burnham\u2019s Labour government. But while politicians and economists focus on government debt, fiscal headroom, and economic growth, I believe they are ignoring the most important question, which is can ordinary people actually afford to live?<\/p>\n
In this video, I examine evidence showing just how financially insecure millions of British households have become.<\/p>\n
Using household income data produced by the Centre for Economics and Business Research for ASDA, I explain why Britain\u2019s cost of living crisis is far worse than headline economic statistics suggest.<\/p>\n
The figures reveal extraordinary inequality. The poorest 20% of UK households have an average gross income of just \u00a3229 a week, compared with \u00a32,715 for the wealthiest 20%.<\/p>\n
But the real problem becomes clear when we examine discretionary income: the money households have left after paying taxes and meeting essential costs such as food, housing, energy and transport.<\/p>\n
The poorest fifth of households have an average discretionary income of minus \u00a375 a week. They cannot even afford their basic necessities. They must go without.<\/p>\n
The next 20% have just \u00a311 a week remaining after essential expenditure. That leaves almost nothing for holidays, Christmas presents, leisure activities or unexpected costs.<\/p>\n
Even households in the middle of the income distribution have relatively little financial security, with average discretionary income of just \u00a392 a week.<\/p>\n
I argue that these figures demonstrate why so many people feel abandoned by Britain\u2019s political and economic system.<\/p>\n
Around 60% of households have limited financial flexibility, and the poorest 20% cannot cover their essential costs. Meanwhile, the wealthiest households have many hundreds of pounds available every week after meeting their basic needs.<\/p>\n
This is the reality that John Healey must confront in today\u2019s Budget.<\/p>\n
I am not interested in whether he meets arbitrary fiscal rules or produces optimistic economic forecasts. I want to know what he will do to protect people who are struggling to survive.<\/p>\n
Britain\u2019s economic problems cannot be solved by reassuring financial markets while millions of households remain financially insecure.<\/p>\n
A successful Budget should be judged by whether it improves people\u2019s lives, reduces poverty and provides greater economic security.<\/p>\n
That is the standard I will use when analysing John Healey\u2019s Budget later today.<\/p>\n