Labour’s deputy leader has called for a general election in the wake of Jeremy Hunt’s “nightmare before Christmas” Budget.
“His only plan is to hike the taxes of working people to foot the bill the Tories left behind after 12 weeks of chaos and 12 years of economic failure,” she said.
“Britain simply can’t afford any more Conservative mismanagement. No one voted for this; we need a general election now.”
On Friday the highly respected Institute for Fiscal Studies (IFS) said the economy had been damaged by a series of own goals, including Brexit and Liz Truss’s botched mini-Budget.
The think tank’s chief, Paul Johnson, warned that a forecast drop in living standards was the “biggest fall in living memory” and that middle earners as well as “Middle England [are] set for a shock”.
“The truth is we just got a lot poorer. We are in for a long, hard, unpleasant journey; a journey that has been made more arduous than it might have been by a series of economic own goals,” he said.
Ms Rayner said that, after three prime ministers, four chancellors and four budgets in a single year, “our country is in an even worse place than where we started. No one is to blame for this except the Conservatives.”
Mr Hunt’s budget was dubbed the “nightmare before Christmas” after he unveiled stealth taxes totalling £25bn and £30bn of public service cuts to fill a £55bn gap in the government's finances.
At the same time, interest payments on government debt will soon top £100bn a year, more than spending on any public service except the NHS.
The overall tax burden is due to reach its highest level since the Second World War in 2024, while unemployment will rise by more than 500,000 to a peak of 4.9 per cent.
Public services such as police, transport and local government are now on course for austerity, with no extra cash to offset soaring inflation for the next three years and lower than expected increases in the following three. And the Office for Budget Responsibility said a 7 per cent slump in household incomes would wipe out the gains of the last eight years.
A Tory source said: “The chancellor set out a credible plan to get our public finances back on a stable footing after a once-in-a-generation pandemic and a war in Europe hit our economy, just like other economies around the world.
“We’ve yet to hear what the Labour Party’s plan is to fix the economy. At the moment all they have is a £2bn solution to a £55bn problem.”