LONDON (Parliament Politics Magazine) – A think tank has warned that the mini-budget by Rishi Sunak will not prevent millions of people from falling into poverty due to rising food and energy prices.
The chancellor stated that the initiatives outlined in his Spring Statement would assist “hardworking British families” in navigating the difficult months ahead.
However, according to the Resolution Foundation, 1.3 million more individuals will fall into poverty in the next year.
Boris Johnson intimated that greater assistance for low-income families will be forthcoming.
The cost of living was the single most important item they had to address, and they would, the PM told LBC Radio, adding, “As we move forward, we must do more.”
The Office for Budget Responsibility, which is the government’s own forecaster, has stated that UK households are facing the largest reduction in standards of living since records began in the 1950s.
According to the Resolution Foundation, 1.3 million individuals, including 500,000 children, will be driven into absolute poverty in the coming financial year, defined as earning less than 60% of the median income in 2010-11.
The think tank believes that the increase would be the largest outside of a recession, bringing the total number of people living in absolute poverty to 12.5 million.
In his Spring Statement on Wednesday, Mr Sunak aimed to address growing living costs by slashing fuel duty by 5p and softening the blow of April’s National Insurance hike by raising the point at which workers must begin paying it.
The changes, according to Torsten Bell, chief executive of the Resolution Foundation, will provide some relief to families with higher and intermediate incomes.
However, he added: “It means we’re all going worse off, and those at the bottom are having to cut essentials because they don’t have much in the way of luxury spending to begin with. That, I believe, is really serious.”
Mr Sunak also used Wednesday’s statement to guarantee that by the next general election in 2024, the UK economy would be in better form than it is now, he would lower income tax by 1p in the pound.
Mr Sunak, according to Labour’s shadow chancellor Rachel Reeves, has failed to grasp the magnitude of the cost-of-living crisis.
“I believe most people are looking at their paychecks and taxes right now and saying, ‘These promises in the future aren’t going to help me pay these bills this year,'” she told the BBC.
Shea added, she was astounded that the chancellor did nothing about rising gas and electricity costs yesterday, given the profits earned by North Sea oil and gas firms were at near- record highs.
Mr Sunak said on Wednesday that the action he announced will safeguard the most vulnerable.
He told Today that it was entirely correct that they assist those with the lowest earnings. He was certain that the policies they’ve implemented were doing that.
He emphasised that the recently promised energy bill rebate would assist families deal with rising energy prices when the price cap changes in April.
They would have to assess where they are in the autumn, he responded when asked if he would help with energy bills before October.
Inflation, which measures the rise in the cost of living over time, is expected to approach a 40-year high of 8.7% in the final three months of 2022, according to the OBR’s latest prediction.
Standard of living will not recover to pre-pandemic levels until 2024-25, according to the report, due to rising costs and tax hikes.
