Rishi Sunak’s mini-Budget will plunge 1.3million Brits into poverty as the brutal impact of his miserly measures was today laid bare.
And 500,000 children are among the families who will be left worse off by the Chancellor’s Spring Statement, which did little to help the hard-up survive the crippling cost of living crisis.
Millions of people struggling with soaring energy bills, skyrocketing prices and a looming National Insurance payments rise had hoped Mr Sunak would deliver a package of measures that would ease their pain.
But the millionaire Tory dealt them a crushing blow when he offered little in the way of help on Wednesday.
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And today, the Resolution Foundation think tank exposed just how hard households will be hit.
It warned inflation, already soaring to 6.2% in the fastest rise in 30 years and outstripping wages and benefits, could hit 9%.
And its analysis revealed typical working-age household incomes are to fall by 4% in real terms this year, a loss of £1,100, while the largest drops will be among the poorest quarter where incomes are set to plunge by 6%.
Mr Sunak’s £11billion in cuts to National Insurance and fuel duty will mostly benefit people in work.
Even with a 1p drop in income tax from 2024, seven out of eight workers will still be paying more tax overall by 2025, the research found.
Workers are also on course to suffer an £11,500 wage loss.
Resolution Foundation chief executive Torsten Bell said: “In the face of a cost of living crisis that looks set to make this Parliament the worst on record for household incomes, the Chancellor came to the dispatch box promising support with the cost of living today, and tax cuts tomorrow.
“The policies do not measure up to the rhetoric.” He added that Mr Sunak “prioritised rebuilding his tax-cutting credentials over supporting the low to middle income households who will be hardest hit from a surging cost of living”.
Shadow Chancellor Rachel Reeves said of the Spring Statement: “This is a disaster for working people, for the poorest people in society who are struggling with rising food prices, rising petrol prices and most of all the big increases in tax and electricity bills.
"The Chancellor can say as many times as he likes that he’s a tax-cutting Chancellor but it’s a bit like a kid in his bedroom playing air guitar, he’s not a rock star.
“The problem, for this Chancellor, is that by the end of this Parliament seven out of eight people will be paying more taxes. Only one in eight will be paying less taxes.” Shadow chief secretary to the Treasury Pat McFadden added: “The Chancellor’s high tax, low growth Spring Statement is a disaster for living standards.
“He had a choice to make, he could have eased the cost of living crisis by choosing a windfall tax on oil and gas producers to cut bills.” Lib Dem leader Sir Ed Davey branded Mr Sunak’s package a “total swindle”.
He said: “People are drowning in these tax rises and these higher bills. The Chancellor needed to provide a
lifeboat and he didn’t.”
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With real wages in the midst of a third major fall in a little over a decade, the Resolution Foundation revealed average weekly earnings are on course to rise by just £18 a week between 2008 and 2027. It would have been £240 a week had they continued on their pre-financial crisis path.
Mr Sunak claimed the cost of living crisis is global and warned: “I can’t make every problem go away.” And Boris Johnson admitted life for many will “continue to be choppy”.
- French President Emmanuel Macron has warned an “unprecedented food crisis” is looming because of the war in Ukraine as local farmers cannot sow crops.
