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Chancellor's spring statement: Charities let down by lack of action on poverty

This news post is almost 2 years old

Plans to raise the National Insurance threshold have been described as inadequate by campaigners.

Charities have raised numerous concerns about the government’s response to the cost of living crisis as Chancellor Rishi Sunak set out Westminster’s latest spending plans. 

Representatives from anti-poverty campaigns hit out at the Tory minister after he announced details of his spring statement on Wednesday. 

The “mini-budget” set out a number of measures to mitigate the rising cost of living, with inflation widely expected to surpass seven per cent, year-on-year. 

Field duty has been reduced by 5p as of Wednesday evening, while low earners will now be excluded from National Insurance tax increases. 

Mr Sunak raised the threshold by £3,000 to lift some out of the bracket paying the the 1.25 per cent increase in National Insurance contributions. 

The Tory chancellor also promised to cut basic income tax in England by 1p in 2024 to match the current Scottish starter rate for low earners.

However, Mr Sunak and the Tory Government rejected pleas to do more to tackle rising poverty rates, including a scrapping of the benefit cap, which places a limit on the total amount of benefit payments a person can receive.

Peter Kelly, director of the Poverty Alliance, said: “Government should be about compassion and justice, and making sure people are able to live as full a life as they can. The Chancellor said his Spring Statement today was all about security. Yet his plans show a failure to comprehend the situations being faced by households across the country, leaving them with insecure and falling incomes in the face of rising costs.

“Amid a rising tide of poverty, the Chancellor could have thrown a lifeline by increasing benefits in line with inflation and by scrapping the unjust benefit cap. Instead, he has provided additional funding of only £500m to the Household Support Fund which, although welcome, will quickly be consumed by the rising cost of living for families on the lowest incomes. 

“The increase in the National Insurance threshold has also been presented as a support to people living on low incomes. In reality two-thirds of this effective tax cut will go to middle and higher-income households.

“By ignoring the tidal wave of rising living costs that is pulling so many people into poverty, the Chancellor has made clear his priorities. 

“His tax cutting agenda will generate positive headlines, but could see another 400,000 people across the UK swept into poverty. Ultimately, the Chancellor’s statement is a failure of courage, a failure of compassion, and a failure of justice.”

Citizens Advice Scotland chief executive, Derek Mitchell, echoed the criticism, warning many are at breaking point and that the measures outlined by the Tories are inadequate. 

He said: “People are facing a cost of living crisis that will squeeze household budgets to breaking point and beyond.

“It’s vital to understand that this crisis has been brewing for some time, with 1.8 million people in Scotland seeing their finances worsen during the pandemic.

“One in three of us already find energy bills too high even before the record rise in prices due in April, and the knock-on effect of that is almost half a million people cutting back on food to afford energy bills.

“Some of the measures announced today by the Chancellor will provide some respite, however in reality it won’t be enough to halt a rising tide of poverty that could sweep millions across the U.K. into debt and destitution.  Put simply much more needs to be done than has been announced today.

“The CAB network is here to help people during this crisis. We unlocked £147million for people during the pandemic. Our advice is free, impartial and confidential. Our message to people worried about the cost of living is to get advice, and we’ll help however we can.”

John Dickie, director of Child Poverty Action Group (CPAG) in Scotland, said the Chancellor could have helped millions of families in Scotland and across the UK cope with spiralling costs – but instead failed the children who needed him the most. 

He said: “The measures he announced don’t come close to bridging the gap between what the lowest income families have and what they need. It will leave tens of thousands of children stranded in the face of the highest prices in a generation.

“The Chancellor should have increased benefits to match inflation – the most efficient way to help hard-pressed households.  But on current plans he will impose a real terms cut of £663  a year on families on universal credit at the worst possible time. That will leave millions without enough to live on.  Today, the UK government looks increasingly remote from real life families.

“All eyes are now on Holyrood tomorrow for the Scottish government’s new child poverty delivery plan, and what we hope will be a very different approach to supporting children and families.”