THE Chancellor’s failure to tackle the cost of living crisis will see more than one million people, including 500,000 children, fall into absolute poverty, a new report has found.
Analysis of Rishi Sunak’s Spring Statement published on Thursday found the Tory Chancellor will preside over the “worst parliament on record for living standards growth”.
READ MORE: Kate Forbes accuses Rishi Sunak of failing to help households
Sunak announced a number of measures in his mini-Budget on Wednesday, including cutting fuel duty by five pence and raising the threshold for National Insurance contributions by £3000.
The Resolution Foundation has found that even despite the UK’s “strong recovery” from the pandemic, poorer households will still feel the pinch as living standards plummet for many.
A typical adult will see their income fall by 4% in 2022-23 but the poorest quarter of households will see their incomes hit by 6% - meaning a further 1.3m people will fall into poverty next year, the think tank found.
It will be the first time Britain has seen such a rise in poverty levels outside of a recession.
Cutting the lowest rate of income tax in April 2024 will save the average earner £243 per year, the Resolution Foundation said. But previously announced taxes mean workers will not feel the impact of this.
READ MORE: Andy Murray slams Tories over claim they can be trusted with taxpayers' money
When the basic rate of income tax is cut to 19%, 27m out of 31m workers in the UK are still set to pay more tax and National Insurance because of tax hikes previously overseen by the Chancellor.
Britons are facing the highest tax burden since the post-war Labour government in the 1940s under Sunak, the Office for Budget Responsibility found.
The Resolution Foundation also found that tax receipts as a share of the economy will reach their highest levels since 1982-83 – a rise of some £3000 per household since the 2019 election.
And poorer households will see less from the measures introduced yesterday than their richer counterparts, the think tank said. Households in the top half of income distribution will gain an average of £475, compared to just £136 for the poorest fifth of households, it said.
While Sunak claimed on Wednesday there would be £45m due to the Scottish Government as a result of his changes, he was accused of providing “nothing” for Scotland in the Spring Statement by his SNP opposite number Alison Thewliss.
Scotland’s Finance Secretary Kate Forbes said the money would “go to the families who actually need it” while accusing the Chancellor of having “chosen not to” help families pay soaring energy bills.
READ MORE: Rishi Sunak grilled on Sky News about wife's alleged ties to Russia
Ofgem’s price cap on energy bills will rise in April by around 54% for the average customer – or around £693 per household a year.
Inflation stood at 6.2% in February – its highest level in 30 years – and is expected to reach 8.7% meaning goods and services will become more expensive even as wages are set to fall 3.6% over this year.
How is the cost of living crisis affecting you?
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