Budget tax raid on lower earners is right thing to do, says Rishi Sunak


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ishi Sunak has defended his tax raid on lower earners as “the right thing do” amid claims that his Budget will push half a million people into poverty.

Two major think tanks laid into his package of measures with data suggesting the poorest would be hard hit.  The Joseph Rowntree Foundation said his decision to end the temporary £20 per week universal credit uplift in autumn would “pull 500,000 people including 200,000 children into poverty as we head into winter”.

The anti-poverty group said it would coincide with a half-million rise in unemployment, and would “cut the main rate of unemployment support to its lowest level since 1990”.

In a separate report the Resolution Foundation argued the poorest households will see their incomes fall by seven per cent in the second half of the year when the UC uplift ends.

Quizzed during a round of morning interviews on Thursday, the Chancellor defended his decision as “progressive” on the grounds that it only affected those whose incomes were rising in cash terms.

“Freezing personal tax thresholds is a progressive way to raise money,” he told Sky News. “I think crucially what people need to understand is that no one’s take-home pay that they have today is affected or lowered by this policy.”

He said it would take “decades” to pay down the “unimaginable” cost of the Covid pandemic measures, at £407 billion.

“Unbelievably, we got a whopping £30.1 billion cut in day-to-day health spending in future years, when the NHS will be struggling with the post-Covid backlog,” she said.

“This Budget was a test of character for Rishi Sunak. He failed it.”

Labour believed it had unearthed a political hand grenade in the fine print of the Budget Red Book, where figures showed a £30 billion fall in NHS spending to come. The party accused the Chancellor of having “buried” bad news.

However, the reduction appeared to be a result of Covid-19 emergency funding coming to an end as the country exits the pandemic, rather than a drop in core funding. Treasury sources accused Labour being “misleading at best”.

The Chancellor was largely unscathed during his media round, which he carried out wearing a high-vis jacket in front of the docks at Middlesbrough.

Torsten Bell, chief executive of the Resolution Foundation, said Mr Sunak’s plans raised many questions, including about how many low income people would be worse off.

“The Chancellor has gone big on both support for the recovery now and tax rises in future,” he said.

“This is broadly the right approach to take in terms of protecting the economy now, securing a recovery next, and repairing the public finances later.



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