Families will be £1,900 poorer at the end of this parliament compared with the beginning, a leading economics think-tank has said.
Despite Jeremy Hunt claiming that the tax cuts announced in his Autumn Statement would put “more money in people’s pockets”, the Resolution Foundation said that this was not the case.
The chancellor reduced the National Insurance rate paid by workers from 12% to 10%, while also unveiling cuts to business taxes.
Responding to the plans announced in the statement, the Resolution Foundation said this government would set a “grim” new record for decreasing living standards and that Hunt’s plans “failed to end a wider economic stagnation”.
Despite about £20bn of tax cuts announced by the chancellor, there had already been a combined total £90bn of tax rises announced by the government.
This means that taxes are actually rising by the equivalent of £4,300 per household between 2019-20 and 2028-29, the think tank said.
They also note that the plans will hand the next government “implausible” cuts to public sector spending which will greatly impact the UK’s already struggling public services.
The the Institute for Fiscal Studies has also said that Hunt’s headline measures did not make up for the overall increase in taxes.
They explained that taxes will actually reach their “highest ever level” despite JeHunt’s boasts that he has handed out the biggest package of cuts since the 1980s.
“The projected tax burden is still set to reach 37.7 per cent of GDP by the end of the forecast period: its highest ever level in the UK,” the think-tank’s director Paul Johnson said on Thursday.
“The tax cuts are paid for by planned real cuts in public service spending.”