Rishi Sunak’s Spring Statement has been branded “desperately disappointing” for Brits hit hardest by the cost-of-living crisis and spiralling energy costs.
The chancellor delivered his 'mini-budget' to parliament on Wednesday amid rocketing costs for basic essentials and growing pressure for financial interventions to help millions of hard-hit households.
Key announcements in the statement included raising the threshold at which National Insurance is paid, cutting 5p off fuel duty, an additional £500m for the Household Support Fund, and a pledge to cut income tax by 1p in 2024.
Sunak unveiled his plans after official figures revealed inflation rose by a 30-year high of 6.2% in February - largely driven by soaring energy bills and more expensive food - meaning it will be a huge struggle for families on the lowest incomes to make ends meet.
On Thursday, the chancellor defended his actions and said helping the country’s poorest people was his “priority”.
Put to him that he did not “create a buffer for the people who need it most” in his Spring Statement, he told BBC Breakfast: “So we did, and actually because they are our priority we started with them, and we did that in October in my budget then.
“And what we did then was make the operation of Universal Credit more generous, we cut something called the taper rate, the tax rate in Universal Credit… you act in advance of things happening where you can.”
However, a growing number of think tanks and charities have criticised the chancellor's plans for not doing enough to help those most vulnerable to the energy crisis.
Fuel poverty charity National Energy Action warned: “The Spring Statement from chancellor Rishi Sunak fails to address the catastrophic impact on the poorest of skyrocketing energy bills, which are set to increase next week by around 54%.
"Desperately disappointing. The government must use spring and summer to come up with a real plan ahead of next winter, if we are to avoid the worst of cold homes, debt and needless deaths.”
The further pain in store for the most vulnerable was laid bare by the Office for Budget Responsibility (OBR), which has warned that energy bills could continue to rise by a further £1,100 in the next year.
"Based on the wholesale gas price futures assumed in our forecast, we assume it would rise by around 40%, taking it from £1,277 last October and £1,971 this April to nearly £2,800 – a near 120% increase on a year earlier," the OBR said.
The IPPR think-tank also warned that Sunak's statement will leave more people drifting into "debt and destitution".
"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," said Rachel Statham, IPPR associate director for work and the welfare state at the think tank.
"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.”
Sunak's efforts to tackled the current crisis have not been well received by the public either.
According to a YouGov poll that makes grim reading for the chancellor, only 6% of Brits think he has done enough to help people with the increasing cost of living, while 69% said he hadn't. Only 13% of those asked felt the changes to fuel duty, national insurance and income tax would benefit them personally
Labour slammed the chancellor's announcements on Wednesday, accusing the government of making the cost-of-living crisis worse.
“Inflation is at its highest level for 30 years and rising," said shadow chancellor Rachel Reeves told the chancellor in parliament.
"Energy prices at record highs. People are worried sick.
“For all his words, it is clear that the chancellor does not understand the scale of the challenge. He talks about providing security for working families, but his choices are making the cost-of-living crisis worse, not better.”
Earlier this year, Sunak unveiled an "Energy Rebate Scheme" worth £350 after Ofgem announced the energy price cap would increase by 54% on 1 April in February - meaning the tyoical UK household's annual energy bill will rise by £693 to £1,971.
However, the £8.9bn scheme has been widely criticised for being partially repayable and confusing - with the OBR saying half "will be clawed back over the subsequent years".
At a glance: How the Spring Statement affects you
Here are the main points from the chancellor's Spring Statement:
By the end of the current parliament in 2024, the government would cut the basic rate of income tax from 20p in the pound to 19p, which he said was “fully costed and fully paid for in the plans announced today”.
Fuel duty would be cut by 5p per litre for a year up until March 2023.
VAT on materials such as solar panels, heat pumps or insulation will be removed to help bring down energy costs, as well as on wind and water turbines.
Household Support Fund doubled to £1bn.
The chancellor said he would publish a “tax plan” as he announced the national insurance contributions threshold would rise by £3,000 “to fully equalise the Nics and income tax thresholds not incrementally over many years but in one go this year”.
Employment allowance for small businesses will rise to £5,000.
Watch: Spring statement: Put in context, this was no big giveaway from Chancellor Rishi Sunak