THE Government has been criticised for not doing enough to lighten the burden on the poor caused by rapid inflation and a severe drop in living standards.
In the Spring Statement delivered on Wednesday afternoon, the Chancellor of the Exchequer, Rishi Sunak, announced a one-per-cent cut to income tax and a reduction of fuel duty of five pence per litre.
Charities working with disadvantaged people, among them Christians Against Poverty, the Child Action Poverty Group, Christian Aid, and the Children’s Society, were quick to criticise what they saw as the Government’s poor response to the cost-of-living crisis.
The Office for Budget Responsibility (OBR) forecast that the rise in inflation means that real household disposable income will reduce by 2.2 per cent in 2022-23. This, the OBR said, is “the biggest fall in living standards in any single financial year since ONS records began in 1956-57”.
Gareth McNab, director of external affairs for Christians Against Poverty (CAP), which supports people in debt, said: “There was so much the Chancellor could’ve done, but didn’t. The announcements today ignored people in the toughest situations.”
The Child Action Poverty Group joined CAP to say that Mr Sunak should have increased social-support payments in line with rising costs. Inflation is forecast to average 7.4 per cent this year. Predicted economic growth has been downgraded to 3.8 per cent.
The policy director of the Child Action Poverty Group, Sara Ogilvie, said: “Today, the Chancellor could have helped millions of families cope with spiralling costs — but instead he failed the children who needed him the most.”
The Household Support Fund, which gives local authorities money to support the most vulnerable, has been doubled to £1 billion.
A planned National Insurance increase already announced will go ahead in April, although the Chancellor announced that the threshold for payment would be increased by £3000.
The chief executive of the Children’s Society, Mark Russell, said: “We welcome an increase in the household support fund, which will help low-income families who find themselves in severe financial hardship, preventing them from falling into debt, poverty or homelessness.
“However, this is another short-term fix — it's the same drip, drip, drip of funding that leaves councils hanging from one announcement to the next. It’s not sustainable and doesn’t allow councils to be strategic. The Government need to commit to long-term, sustainable funding for crisis support.”
Responding to the statement in the House of Commons, the Shadow Chancellor, Rachel Reeves, said that this increase should have been scrapped, and a windfall tax imposed on fossil-fuel companies.
On Monday, more than 200 church leaders — including more than 30 serving Anglican bishops, as well as the former Archbishop of Canterbury Lord Williams — had argued for a windfall tax, with the proceeds used to support people struggling with increasing costs (News, 21 March).
The Government’s decision to remove five per cent VAT payments on energy-saving household technology was described as a “welcome start” by Greenpeace’s policy director, Dr Doug Parr — but “it can only be a start”.
Christian Aid accused the Government of “failing the world’s poorest” by not reversing last year’s cuts to the international aid budget (News, 14 July 2021).