Rishi Sunak plans 'mean that inequality will worsen'

  • In Business
  • 2021-03-04 09:09:53Z
  • By BBC
A volunteer packs and prepares food parcels at the Tottenham food bank at Tottenham Town Hall on 21 January 2021 in London, England.
A volunteer packs and prepares food parcels at the Tottenham food bank at Tottenham Town Hall on 21 January 2021 in London, England.  

The government has come under fire from campaigners for doing too little in the Budget to address inequality.

The Joseph Rowntree Foundation and the Resolution Foundation criticised the chancellor's decision to cut universal credit in six months' time.

They said it would bring the incomes of benefit recipients down to levels not seen since the early 1990s.

It would also pull half a million people into poverty, just as unemployment was expected to peak.

Rishi Sunak's decision to spend even larger sums to support the economic recovery now and put off raising taxes until later is broadly welcomed in the Resolution Foundation's overnight analysis of Wednesday's Budget.

But it noted that while GDP is set to grow this year by 4%, that might not feed through to better living standards, with wages by the middle of the decade set to remain £1,200 a year - or 4.3% - below where they would have been without the coronavirus pandemic.

Austerity would drag on for some, it added, with day-to-day spending on government departments such as transport and local government set to fall in real terms next year and remain almost a quarter lower than a decade ago.

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The Joseph Rowntree Foundation, an anti-poverty charity, criticised a decision to extend a £20-a-week uplift to universal credit by only six months.

That meant single recipients of it would see their incomes cut by £20 a week, just as the furlough scheme is ended and unemployment was expected to rise to its peak, the foundation said.

It predicts that will pull half a million people into poverty, including 200,000 children, adding that the Budget was silent on helping 700,000 households who have fallen behind on rent because of the pandemic and are now at risk of eviction.

Responding to the Resolution Foundation's analysis, Mr Sunak told the BBC that it had hailed his decision to freeze income tax thresholds as a "progressive measure" and "a fair way to do what we need to do".

On universal credit, the chancellor rejected suggestions that he should have tapered the ending of the £20-a-week increase in order to minimise its effect on families.

"We have extended it generously and in full, but it's important to remember that it's one of many things that we're doing to support people," he said.

These included increases in the National Living Wage and offering help with council tax payments, he added.

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Are you receiving universal credit? Share your experiences by emailing haveyoursay@bbc.co.uk.

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