Yahoo Finance Rishi Sunak defends Spring Statement saying ‘it’s impossible’ to protect everyone
Chancellor Rishi Sunak has defended his spring statement amid criticism that he is failing to help those who are unemployed and on lower incomes.
The Resolution Foundation said 1.3 million people would fall into absolute poverty next year, and not be able to afford basic necessities. The thinktank warned households would be squeezed by rising prices and a lack of support for those on low incomes.
The chancellor said he knows families are struggling with the rising cost of living but admitted that “it is impossible to protect everyone”
Read more: Spring Statement: Rishi Sunak cuts income tax and fuel duty
Sunak told BBC Radio 4’s Today Programme: “Of course I acknowledge that families are struggling with rising inflation. We’re all grappling with global inflation challenges and the response to Putin’s Russia. Those actions are not cost free for us at home and of course that is impacting family budgets.
“I wish I could make sure we protect everyone against all aspects of that but it’s impossible for anyone in my job to do that. What we can do is make a difference where we can.”
On Wednesday, Sunak cut fuel duty by 5p and raised the threshold at which workers start paying National Insurance from £9,600 to £12,570.
The Resolution Foundation said just one in eight workers would see their tax bills fall by the end of this parliament in May 2024, when the rate of income tax will drop by 1 percentage point to 19%.
“In the face of a cost of living crisis that looks set to make this parliament the worst on record for household incomes, the chancellor came to the box yesterday promising support with the cost of living today, and tax cuts tomorrow,” said Torsten Bell, the thinktank’s chief executive.
The Resolution Foundation's new analysis suggests that 1.3 million people, including 500,000 children, will be pushed into absolute poverty in the next financial year
Sunak was ambiguous regarding the possibility of helping families next Autumn, when energy prices are predicted to soar to £2,800.
Read more: Spring Statement: What Rishi Sunak’s national insurance threshold increase will mean for you
“We’ll have to see where we are by the Autumn. I always keep everything under review,” he said, adding that energy prices are very volatile so it would be difficult to anticipate what will happen.
"The government as it has shown over the past few years is always responsive to what’s happening…With energy prices they are very volatile and no one has any certainty about what will happen.”
This despite the Office for Budget Responsibility (OBR) forecast that household energy bills will soar to about £2,800 a year from October when the price cap on standard tariffs is likely to rise again.
The OBR also said living standards in Britain are expected to fall at the fastest annual rate since the mid-1950s and will take until at least 2024 to return to pre-COVID levels.
The government’s independent economic forecaster said real household disposable incomes per person would fall by 2.2% in 2022-23 as earnings from work fail to keep pace with soaring inflation.
Watch: Spring Statement: Key takeaways from Rishi Sunak's speech
