- Think tank says measures to help poorest are ‘shockingly
inadequate’ and leave millions still facing hardship
The Chancellor’s spring budget will fail to protect millions of
families from a dramatic fall in people’s standards of living and
leave the economy at growing risk of recession, according to
researchers at the Institute for Public Policy Research (IPPR)
think tank.
Faced with the highest forecast inflation for a generation and
warnings that the poorest families risk being pulled further into
poverty and debt, Rishi Sunak’s refusal to raise social security
benefits faster was a missed opportunity, IPPR said.
Key failures identified by IPPR economists
include:
-
Measures announced today do not protect the poorest
households from the increased cost of
living. The cut in fuel duties will
have little impact on the overall cost of living and will
help the better off more in cash terms than the
poorest.
-
Failing to raise universal credit and other
benefits in line with forecast inflation of 8.1 per
cent means millions of families will be pulled into hardship
as prices soar; merely doubling the discretionary support
fund is insignificant when compared to the scale of the
crisis
-
Raising the point at which people start paying
National Insurance contributions will bring
twice as much benefit to the top 50 per cent of earners than
to those in the lower half – where help is most needed.
-
A missed opportunity to levy a windfall tax on the
profits of oil and gas companies that are making
hugely increased profits from the dramatic increases in
energy prices, to be used to help ordinary families pay their
higher bills.
-
Despite the welcome cut in VAT on retrofit,
the failure to address long-term energy security and the need
for transition to net zero through investment in renewable
energy and building retrofit.
Carys Roberts, IPPR executive director,
said:
“We’re going into the biggest incomes squeeze in a generation
and yet the Chancellor hasn’t offered the help that many
households need.
“His plan is woefully out of touch with the reality facing
millions of families, who face being pulled into poverty and
debt. To prevent the cost of living crisis becoming a living
standards catastrophe, the chancellor needed to find ways to get
targeted support to those with the greatest need - but he has
sadly failed to ‘do what it takes’.”
On cost of living Dr George Dibb, head of the IPPR Centre
for Economic Justice, said:
“The Chancellor’s announcements are shockingly inadequate and
will not help those who will need it most. We’re going into the
biggest incomes squeeze in a generation and once again the
Chancellor hasn’t offered the support that many households need.
Changes to National Insurance thresholds and cuts to fuel duty
will help middle income families more than those in the lowest 20
per cent, and it will help those who are already richest even
more.
“This isn’t only a matter of support for households – if
families are spending a bigger share of their income on gas and
electricity, they’re spending less in the everyday economy. That
fall in spending could tip our economy from stagnation to
recession.”
On investment in energy efficiency, clean heat and
renewables, Luke Murphy, IPPR associate director for energy,
climate, housing and infrastructure, said:
“Today the chancellor has chosen to leave millions of
households in fuel poverty when he should have been providing
them with targeted support paid for by a windfall tax on the
bumper profits of oil and gas companies.
“The chancellor’s decision to cut VAT on renovation is
something IPPR has long called for but once again he failed to
commit the investment needed for a bold energy efficiency and
clean heat programme which would help secure the UK’s energy
security, net zero and more affordable energy bills for
consumers. He remains a roadblock to reform.”
On help for households Rachel Statham, IPPR associate
director for work and the welfare state, said:
“Energy bills and supermarket prices are going through the
roof and low-income families simply have nothing left to cut back
on. Lowering fuel duty will fail to lower costs for those on the
lowest incomes who are already having to make agonising choices
between heating and eating. What’s more, it will do little to
bring down the overall cost of living and will bring most benefit
to the better off.
“The Chancellor’s choices have cut low income families
adrift, meaning millions of people struggling with rising bills
and low incomes will be pulled into debt and destitution. The
announcement of £500 million in local crisis funds is an
admission of failure while families' budgets are pushed beyond
breaking point – a situation that should shame us
all.”
