Liz Truss’s plan to reverse the rise in national insurance tax rise will leave the UK’s poorest families just 76p a month better off while benefiting the wealthiest households to the tune of £93 a month
Research by the Tony Blair Institute shows that the Tory favourite’s key plank policy will hand only a paltry amount to the worst-off households while lining the pockets of the rich.
Truss has pledged she will axe the NI increase, which was introduced by rival, Rishi Sunak, when he was chancellor to raise £12 billion for the NHS and social care in England.
In an increasingly bitter leadership contest, Sunak warned that Truss will leave people at risk of “real destitution” as energy bills are set to top £3,600 a year from October and £4,200 from January.
But the Blair Institute said that Sunak’s own plan to axe VAT on energy bills will have “little to no impact” for low income households.
Sunak spelt out his “three-part” plan to top up cost-of-living payments for the most vulnerable through benefits, for pensioners through Winter Fuel Payments, and some support for everyone via a £200-per-home VAT cut.
The Blair Institute analysis said those on means tested benefits should receive an extra £55 a month from the government to help them cope with rising inflation and soaring energy bills.
Ian Mulheirn, the Tony Blair Institute’s chief economist, said: “The combination of rapidly rising energy bills and the wider inflation squeeze means low income families are facing a bleak winter and a worse spring.
“Ideas floating around in the Conservative leadership contest - including a reversal of the NICs increase or a cut to VAT on fuel - will do almost nothing to help the people who are most exposed this winter."
He added: “A serious response will require the new prime minister to extend and expand chancellor Sunak’s support package. The cost will be in the tens of billions, but there is no alternative.”
At a hustings in Thursday Truss also ruled out imposing a windfall tax on the huge profits being enjoyed by energy firms.
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