More than a million to be pushed into poverty, says think tank

Rishi Sunak’s mini-budget will not prevent millions being pushed into poverty by the soaring cost of food and energy, a think tank has warned.

The chancellor said measures in his Spring Statement would help “hard-working British families” through the “challenging months ahead”.

But the Resolution Foundation said 1.3 million people would not be able to afford basic necessities from April.

Boris Johnson hinted that more help for hard-pressed families was on its way.

“The cost of living is the single biggest thing we’re having to fix, and we will fix it,” the prime minister told LBC Radio, adding: “As we go forward, we need to do more”.

It comes as the government’s own forecasters, the Office for Budget Responsibility, said UK households faced the biggest drop in living standards since records began in the 1950s.

Mr Sunak sought to address the rising cost of living in his Spring Statement on Wednesday, cutting 5p from fuel duty and taking some of the sting out of April’s National Insurance rise by increasing the point at which workers have start paying it.

Torsten Bell, the Resolution Foundation’s chief executive, said the changes would provide “some help” to families on higher and middle-incomes.

But he added: “It means we’re all getting worse off, and at the bottom end you’re having to cut essentials because you don’t have lots of luxury spending to go in the first place. I think that is really serious.”

Mr Sunak also used Wednesday’s statement to promise to cut 1p in the pound from income tax by the next general election in 2024, when he said the UK economy would be in better shape than it is now.

Labour’s shadow chancellor Rachel Reeves said Mr Sunak had failed to understand the scale of the cost of living crisis.

She told BBC Radio 4’s Today programme: “This is a tax-raising chancellor, the tax burden is the highest it’s been since the 1940s.

“And if you take in the round all of the tax cuts and increases this chancellor has announced in the last couple of years, by the end of the parliament seven out of eight working people will be paying more in tax, only one in eight will be paying less.

“We are the only major advanced economy that is increasing taxes on working people during these really difficult times.”

Mr Sunak insisted the measure he announced on Wednesday would protect the most vulnerable.

“It’s absolutely right we support people on the lowest incomes. I’m confident that the policies we put in place are doing that,” he told Today.

He insisted that the energy bill rebate announced recently would also “help people meet the rising price of energy”, when the price cap changes in April.

“We can’t do everything but that is significant help.”

The OBR’s latest forecast predicted that inflation, which measures the change in the cost of living over time, is set to hit a 40-year high of 8.7% in the final three months of 2022.

Rising prices and tax hikes mean living standards will not recover to their pre-pandemic level until 2024-25, it said.

How is the cost of living crisis affecting you? Share your experiences by emailing haveyoursay@bbc.co.uk.

Please include a contact number if you are willing to speak to a BBC journalist. You can also get in touch in the following ways: