Will save the average worker about £75. But is that the budget rabbit that conservative backbenchers were after . The answer plainly is no, but the truth is, there was simply not enough money to deliver the cut in income tax they had demanded. After the measures announced today, the Office For Budget Responsibility estimated the chancellor has just £8. 9 billion of headroom left, down from the 13 billion he had in the autumn statement. That the second smallest on record, yet the chancellor gave us a relatively optimistic view of the economy, after covid, a war in europe, and the damage inflicted on the british economy economy this, he said, was a budget for long term growth. Todays obr forecast also shows that we have made Good Progress on the Prime Ministers three economic priorities. Compared to when the three pledges were made, inflation has halved, debt is falling in line with our fiscal rules, and growth is fully 1. 5 Percentage Points higher than predicted. Clamouring. And as growth returns. They dont have a growth plan, so they might as well listen to ours as growth returns, our plan is for economic growth, to improve efficiency. Neither are right. Its not fair to ask taxpayers to pay for more when Public Service productivity has fallen. Nor would it be wise to reduce that funding given the pressures that tax as other uk residents. The chancellor said, all in all, it was a tax cutting budget. That might raise eyebrows. The overall tax burden is as high as it has been since 1948. But the chancellor insists the conservatives will always stick to their broader philosophy. We believe that in a free society, the money you earn doesnt belong to the government. It belongs to you. Hear, hear and if we want to encourage hard work, we should let people keep as much of their own money as possible. Conservatives look around the world at economies in North America and asia and notice that countries with lower taxes generally have higher growth. Economists argue about cause and correlation. But we know that lower taxed economies have more energy, more dynamism and more innovation. We know that is our future too. We will focus on keir starmer� s response shortly. Butjoining us to unpack the chancellors statement is pauljohnson, director of the institute for fiscal studies. Is good to see you. Right now, the economy is not great, we are in a recession, income per has fallen. People can feel it. Theres a 2p cut in National Insurance, on the back of a similar in National Insurance, on the back ofa similar cut in National Insurance, on the back of a similar cut injanuary help people with a squeeze of the feeling . People with a squeeze of the feelin . ,. , people with a squeeze of the feelina . ,. , , people with a squeeze of the feelina . , , ,~ feeling . Yes, it is a pretty chunky tax cut, feeling . Yes, it is a pretty chunky tax cut. Putting feeling . Yes, it is a pretty chunky tax cut, putting those feeling . Yes, it is a pretty chunky tax cut, putting those two feeling . Yes, it is a pretty chunky i tax cut, putting those two together, and if you are a little bit above average earning, may be only 40,000 average earning, may be only 40,000 a year, that is worth rather more than £1000 a year to you, and if you are on a 50,000 a year, it is worth £1500. 1000 are on a 50,000 a year, it is worth £1500. 1000 £500. Theres a £1500. 1000 £500. Theres a pretty £1500. 1000 £500. Theres a pretty chunky tax cut that comes across quite a poor period for living standards, but those cuts by themselves are worth. That is a big tax cut for some people. We shouldnt ignore the threshold phrases which are ahead, fixed for the next three years, so is the Chancellor Taking with one hand while giving with the other . Yes. Chancellor taking with one hand while giving with the other . Yes, he is, while giving with the other . Yes, he is. Absolutely while giving with the other . Yes, he is, absolutely. There while giving with the other . Yes, he is, absolutely. There are while giving with the other . Yes, he is, absolutely. There are some is, absolutely. There are some people already, even with these National Insurance cuts come in april, we will still be they will still be significantly worse off, lower earners, people earning under £25,000 also, they will be worse off, and people earning over £60,000. And if we keep those threshold phrases for another two years, then the number of losers increases. A one off improvement for the National Insurance cuts, but losses, definitely, for the threshold and allowance reasons. Jeremy hunt said today, when it comes to Public Services, is not about how much we are spending on these services, it is about efficiency, what we get out of them. How true is that . Is efficiency, what we get out of them. How true is that . How true is that . Is partly true. Clearl , how true is that . Is partly true. Clearly. You how true is that . Is partly true. Clearly, you want how true is that . Is partly true. Clearly, you want the how true is that . Is partly true. Clearly, you want the public clearly, you want the Public Services to be as efficient as possible, and more than more efficient they are, the better use to get out of public spending, but it is pretty clear that, in some areas of Public Service, there simply isnt enough money to clear backlogs in the justice system, the asylum system, prisons are full, social care is struggling. There is a limited amount more that you can do without additional resources, and some of those areas, and of course, the whole budget is constructed around the assumption that you can actually manage cuts in some of those areas, over the next five years. Something which i think will be, to put it mildly, extremely challenging given how much some of them are struggling already. There was a really them are struggling already. There was a really good them are struggling already. There was a really good points them are struggling already. There was a really good points made in werk times, in that both parties seem to be identifying very small pots of money, you could look at the non dom issue, you know, cutting waste and Public Services, and these amounts in the grand scheme of things, they are pretty tiny. The elephant in the room is the debt. Neither side seems to be engaging with how we will tackle that. I think that is exactly right. There are some very big numbers knocking around. This has been a very, very big tax freezing parliament, so the changes we have seen today are really small compared to the big increases we have seen over the last few years. Debt interest spending is pretty much at Record Levels. The National Debt is at its highest level since the early 1960s. When you compare the money you get from non doms, private schools, so one, with the scale of those issues, not to mention the issues of demographic change, Ageing Population Spending on health and pensions, someone, they are very small numbers. The reality is that whoever is chancellor after the next election, they will have some very Big Decisions about what to make, what they will really implement, these spending cuts, or if they were going to have to find some substantial tax rises, or if they think they can get away with more borrowing. These are Big Decisions that will have to be made. Im afraid a lot of them have been kicked down the road a bit, this time around, but in particular these numbers about public spending. We have learnt nothing more about where the chancellor intends to make cuts. ~. ,. , cuts. The talking about the headroom that i mentioned, cuts. The talking about the headroom that i mentioned, just cuts. The talking about the headroom that i mentioned, just over cuts. The talking about the headroom that i mentioned, just over 8 that i mentioned, just over 8 billion, which is pretty small in a treasury terms, we dont know when the election will be, but some were betting there would be another Financial Statement before they call the election. Does this limit his options . He the election. Does this limit his 0 tions . ,. , the election. Does this limit his otions . ,. , the election. Does this limit his otions . ,. , the election. Does this limit his otions . ,. , , options . He has had his options very limited today options . He has had his options very limited today by options . He has had his options very limited today by the options . He has had his options very limited today by the fiscal options . He has had his options very limited today by the fiscal rules limited today by the fiscal rules that he was following, because of that he was following, because of that very limited so call to headroom against his fiscal targets, that he was made to do more. The very odd way in which these targets are constructed means that arithmetically, if he does another fiscal statement in the autumn, everything gets pushed forward again and by pushing it forward, that probably gives him more apparent in space, he has another year of a very tight Spending Plans, a little bit more growth in the economy, it might give him a chance to have some more tax cuts, because his target is, very oddly, at the moment, that debt should be falling between march 2028 and march 2029, but, come the autumn, his target will be that the debt should be falling between march 2029 and march 2020 umaga 2030. If that sounds a bit mad, that is because it is, that is the set of the targets that the chance physically focusing on. Because the target will change in the autumn, it may mean yet more space against his very specific, odd targets. And may mean yet more space against his very specific, odd targets. Very specific, odd targets. And he has ut very specific, odd targets. And he has put himself very specific, odd targets. And he has put himself in very specific, odd targets. And he has put himself in a very specific, odd targets. And he has put himself in a straitjacket, l has put himself in a straitjacket, thatis has put himself in a straitjacket, that is a percentage of gdp, there are other countries who would say, welcome you need to spend to grow, and the united states, although he talks about them as a low tax economy, they have spent a lot of money, look at the reflation inflation reduction act, they are spending money to grow, why are we not doing the same . We spending money to grow, why are we not doing the same . Not doing the same . We are not like the united states, not doing the same . We are not like the united states, yet not doing the same . We are not like the united states, yet is not doing the same . We are not like the united states, yet is a the united states, yet is a continental size economy, and the worlds reserve, of currency and we dont have the level of freedom that they have. And as i said, we already have debt and Debt Interest Spending at pretty much Record Levels, or certainly Record Levels in recent times. We are having to sell more Government Debt over the next few years, by a factor of two or 2. 5, compared to what we have done in the last 25 years, so there are limits on what we can do in that context. Is that a hangover from the trust budget . Though . The way the markets were spooked . Is the government more careful, we more careful, a result . I dont think anyone will be talking about doing anything quite as radical as liz truss and Kwasi Kwarteng were trying to do. This did give us an indication of the limits of what is possible. I certainly dont think that if the chancellor said that he was wanting to borrow another five, said that he was wanting to borrow anotherfive, ten, 15 billion a year of the next few years, that would massively spook the markets, in fact what he is doing is the reverse, because he is putting in place some really serious Investment Spending cuts, so he has been quite tight on a day to day spending, he has been a much tighter on Investment Spending, which he is looking to cut by tens of billions in the next few years. Paul, really grateful for your time tonight. I know you have had a very long day, so we appreciate you coming on the programme. Thank you. That was pauljohnson. The other side of the break, we will be joined by our Political Panel to discuss the budget. With us tonight, former Communications Director at number 10, guto harri, the conservative former economic secretary to the treasury, justine greening, keir starmer� s former policy director, claire ainsley, and uk economist at deutsche bank, sanjay raja. We will be right back. For our uk viewers, lets have a look at some of the story is making news today. 181 trials that have been delayed, rape cases, when i have to go before a jury. The gesture in charge of the plan said victims have faced unacceptable delays. A fire in the southampton� s stadium has resulted in their match being called off. Smoke plume from industrial units could be seen for miles around. One person has been treated for the effects of breathing in smoke. Junior doctors in Northern Ireland are taking Strike Action over pay for the first time today. The British Medical Association says the deal put to them was the minimum Junior Doctors could have been offered. The department of health in Northern Ireland said the proposal� s amounted to an average pay increase of more than 9 . Youre live with bbc news. Jeremy hunt did what all chancellors do on budget day he accentuated the positives. There was much talk of how the economy has turned a corner, with growth rates revised. He was keen to point out that taxes had been cut by £900 for the average worker, since his autumn Statement Last year, but he forgot to mention that the freeze on tax thresholds, for the next three years, will suck much of the spending power out of the economy. The Ratings Agency moodys said today, the chancellors announcement of pre election tax cuts while maintaining restrained Spending Plans will perpetuate the uks fiscal challenges. The Labour Leader defined in much stronger terms it. For over 14 years, we have seen our fair share of delusion from the party opposite. A Prime Minister who thinks The Cost Of Living crisis is starting to ease. An Education Secretary who thinks concrete crumbling on our children deserves her gratitude. A former Prime Minsister who Still Believes crashing the pound was the right path for britain. Where is she . and today, a new entry in this hall of infamy the chancellor who breezes into this chamber in a recession and tells the working people of this country that everything is on track. Crisis . What crisis . or as the captain of the titanic or the former Prime Minister herself might have said, iceberg . What iceberg . Smiling as the ship goes down, the chuckle brothers of decline, dreaming of santa monica or maybe just a quiet life in surrey and not having to self fund election. That was a keir starmer speaking in the house after the chancellors speech. Justin, it is a very sensible budget, according to some conservative mps, but not a very political budget, is it, for a party thatis political budget, is it, for a party that is 20 points behind in the polls . I that is 20 points behind in the olls . ~. , that is 20 points behind in the olls . ~. ,. , that is 20 points behind in the olls . ~. ,. ,. , polls . I think one might argue that it is not political polls . I think one might argue that it is not political enough. Polls . I think one might argue that it is not political enough. That it is not political enough. That clip, i think, it is not political enough. That clip, ithink, showed it is not political enough. That clip, i think, showed that the government has lost the narrative on what is happening with our economy. The reason for that is because of the election coming up, wanting to see everything is getting better, but that does not match ordinary peoples experiences of The Cost Of Living at this state, and the state of our Public Service at the moment, and the fact for many of them that taxes are significantly higher than they have experienced before. That is because of the impact of covid 19 on our economy, The Cost Of Living challenge, and then having to take action on energy bills. I think what the government has failed to do is really explain the backdrop to the decisions it is taking in the budget today. As a result, as we had, labour will fill in that space, they will set out why they see the decisions, they will of course a point trusss disastrous budget in october 2022. This is the challenges that they face. It is not only narrowly only the narrative of the past, but it is also very difficult winning an election looking ahead. I think the missing piece for the conservatives and the government is what has happened to levelling up . That less rishi sunak has talked about this, the worse the conservatives have done in polls. There was nothing in the budget today about skills, on improving prospects, when its the neck was asked about levelling up today and