1.3 million, including 500,000 children, will fall into poverty, after Rishi Sunak’s failure to deliver on his promise to support people through the cost of living crisis.
The Resolution Foundation has said that over a million people will be pushed into absolute poverty from next year, after the chancellor Rishi Sunak failed to help low-income families up and down the country with the cost of living crisis.
The think tank says that 1.3 million, including 500,000 children, will fall into poverty, after Rishi Sunak’s failure to deliver on his promise to support people through the cost of living crisis after he delivered the Spring Statement.
While Sunak boasted of tax cuts for 31 million workers, the Resolution Foundation says that after taking all his tax changes into consideration — around 27 million (seven in eight workers) will pay more in income tax and NI in 2024-25.
Families will also face £1,100 income losses thanks to the cost-of-living squeeze.
The think tank says that the chancellor ‘opted for a big but poorly targeted policy package focused on partially offsetting some of the big tax rises he’d previously announced, rather than on supporting those families hit hardest by the cost of living crisis.’
Typical household incomes are forecast to fall by 2 per cent across the parliament as a whole (2019-20 to 2024-25), making this parliament the worst on record for living standards, beating the 1 per cent income fall over the course of the 2005-05 to 2010-11 parliament.
Torsten Bell, Chief Executive of the Resolution Foundation, 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 yesterday promising support with the cost of living today, and tax cuts tomorrow. Significant measures were announced on both counts, but the policies do not measure up to the rhetoric.
“The decision not to target support at those hardest hit by rising prices will leave low-and-middle income households painfully exposed, with 1.3 million people, including half a million children, set to fall below the poverty line this coming year.
“And despite the eye-catching 1p cut to income tax, the reality is that the Chancellor’s tax changes mean that seven-in-eight workers will see their tax bills rise. Those tax rises mean the Chancellor is able to point to a swift fiscal consolidation and significant headroom against his fiscal rules.”
Basit Mahmood is editor of Left Foot Forward
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