Despite a slightly better outlook for the economy than initially expected, people in the UK are arguably facing the biggest decline in their living standards in almost 70 years. This is according to an estimate by the independent budget authority OBR (Office for Budget Responsibility) on Wednesday. Although Britain can escape a recession, per capita disposable household income is expected to shrink by 2024.5 percent over a two-year period to the end of March 7 – the sharpest since 1957.

This is despite the fact that inflation in Great Britain is not expected to be quite as high this year as it was in the previous estimate. Accordingly, the inflation rate, which climbed to 2022.11 percent in 1, is likely to fall faster than previously assumed and amount to 2.9 percent at the end of the current year.

Accompanied by large-scale strikes in numerous industries, British Finance Minister Jeremy Hunt presented the budget plan to Parliament in London on Wednesday. In view of the high cost of living and the sharp rise in inflation, the plan provides for an aid package for the population. With regard to the strikes, Hunt said: "We will continue to work hard to resolve these disputes, but only in a way that does not drive inflation further."

The aid package is to comprise 94 billion pounds (107.7 billion euros) this year and next. Specifically, among other things, electricity and gas bills are to be subsidized for another three months and the state financing of childcare is to be increased. "In the face of a crisis in the cost of living (...) we have proven our values by protecting families in difficulty," Hunt said.

At the same time, hundreds of thousands of teachers, young doctors, BBC journalists, civil servants and drivers of the London Underground went on strike on Wednesday. Near Prime Minister Rishi Sunak's office, hundreds of civil servants chanted chants such as: "What do we want? Ten percent, when do we want that? Now!" Union secretary Mark Serwotka told AFP that it was a scandal that some public sector workers were so poorly paid that they were now dependent on state support themselves.

Also relief for the pubs

In addition to the aid package to reduce energy costs for consumers, Hunt announced a reduction in childcare to help bring parents of young children back into the labour market: Most working parents in England with children between the ages of nine months and five are entitled to 30 hours of free childcare per week through Hunt's budget. The regulation is to apply for 38 weeks per year and will come into force in stages.

The government also wants to help the battered pubs. For this, the levies on draught beer are to be frozen. "From August 1, taxes on draught products in pubs will be up to 11 pence lower than taxes in supermarkets," Hunt told parliament on Wednesday. "British ale may be warm, but taxes on a pint are frozen," Hunt said.

Brexit has hit the industry

However, taxes on all other alcoholic beverages will rise by 10.1 percent as previously planned, in line with inflation. This is another reason why the industry reacted skeptically. The head of the British Beer and Pub Association, Emma McClarkin, spoke of a step in the right direction. Although pubs could now hope for a boost in the summer. However, the measure in no way offsets the "catastrophic impact of rising inflation and unfair energy contracts" on pubs and breweries, she said.

Hunt spoke of a "Brexit pub guarantee". Britain's exit from the EU made such an aid measure possible in the first place, he said. Commentators pointed out, however, that Brexit has hit the industry enormously, for example because cheaper workers from the EU can no longer be employed due to stricter immigration rules.

In Great Britain, the number of pubs has been declining significantly for years. Reasons include the high beer tax as well as the smoking ban, changed drinking behavior and cheap alcohol in the supermarket. The corona pandemic has exacerbated the problems. The exploded energy prices have taken an additional toll on pub owners.