Tory Rishi Sunak's Budget plans are “nothing like as generous as they appear”, analysts said today.
The rookie Chancellor delivered his first financial statement yesterday, announcing a £30billion giveaway - with £12billion targeted at easing the crisis triggered by the coronavirus.
Supporters said it finally marked the end of decade-long austerity.
But the independent Institute for Fiscal Studies today warned the multibillion pound injection was not all it seemed because so many Whitehall departments' pots of cash were ring-fenced.
Earlier, the Resolution Foundation think tanks said every household will suffer a £575 annual blow due to the slump in the economic growth forecast - even before the impact of the coronavirus is factored in.
It said the GDP markdown from the Office for Budget Responsibility financial watchdog was both "incredibly grim and yet still unbelievably optimistic".
Chief executive Torsten Bell said: "In reality, once we take the economic impact of coronavirus into account, this is the weakest official growth outlook on record. And having finally returned to peak pay this year, real wage growth is set to weaken every year of the forecast period."
So what did the IFS spot in the Budget that the Tories might not want you to know?
Here are 6 things you should know.
1. National Insurance changes will mainly help higher earners
We knew this already - but the IFS has shown just how stark it is.
A big Budget announcement was to scrap national insurance contributions on the first £9,500 of your earnings - up from £8,632 at the moment.
It works out as a saving of up to £85 a year per person, costing the government £2.1billion a year.
But the IFS says only 8% of the gains will go to the poorest fifth of households. That's because many of them already earn under the threshold.
2. Brexit makes the spending look bigger than it is
"The current spending plans are nothing like as generous as they appear," the IFS warned.
That's because the Budget counts the money no longer paid into EU coffers as a gain - despite the fact some of that money used to come back to Britain.
IFS expert Ben Zaranko explained: "Approximately £7bn or £8bn of that spending in 2023/24 won't in fact be new money for departments to spend on the usual set of public services. It will in fact be replacing spending that used to be done by the EU. So including it will overstate somewhat the generosity."
The IFS said average annual increases of 2.8% sound substantial. But much of it is concentrated in health, schools, defence and overseas aid, with "relatively little" for other departments.
3. And we're still not back to where we were in 2010
The Tories have ramped up spending on the state, with money plunged back into key departments.
But because there were so many years of cuts, the amount spent per-person for public services (in real terms, accounting for inflation) will “remain well below 2010-11 levels in 2024-25".
IFS expert Ben Zaranko explained: "There are a broad set of departments that will have spending nowhere near where they were in 2010.
"If you told them in 2010 that's where spending would be, it would be quite remarkable to see a period of such sustained spending constraint."
4. A lot of it is short term
The plans also “look suspiciously front-loaded” to the first two years of the five-year Parliament, he added.
“Spending increases pencilled in for the next two years are much bigger than what follows,” warned Mr Johnson.
“This could suggest top-ups in later Budgets and hence a need for more tax or borrowing.”
5. A coronavirus recession could trigger disaster
The respected think tank also raised fears about spiralling debt to fund the giveaway, amid low growth predictions, uncertainty over an EU trade deal and the global economic turmoil unleashed by the coronavirus.
Mr Johnson said: “Underlying debt is forecast to rise slightly relative to national income.
“If growth turns out less positive than expected as a result of coronavirus, Brexit or any other reason, then debt could easily start moving decisively upwards.”
6. There's nothing for social care
The Budget promised £6bn for the NHS but no extra funding for social care.
IFS director Paul Johnson was pretty scathing. He said: "The big gaping hole in the Budget was any discussion of the future of social care in a more general sense.
"The Prime Minister promised several months ago he was going to sort it out.
"There was a promise I think in the manifesto to have a proper review and sorting out of social care, and I don't think it got really much mention at all unless I missed something in the small print.
"That's going to be a continued worry for anyone over pension age who's worried about whether they're going to end up requiring social care."
IFS expert Ben Zaranko added: "Social care is one of the things they're not 'getting done'."
