ANALYSTS have said the Chancellor's statement today will benefit those already earning the most, more than the poorest in society.

Economists at the IPPR think tank said that those earning the least would get around £120 in help from Rishi Sunak's measures, while those earning the most would get around £480.

IPPR economists looked at the shortfall between the cost of living increase for families and the policies put in place to support them, finding that the poorest 20% of people were facing average household costs rising by £550 prior to the Spring Statement.
They said the chancellor's measures would reduce those by £120, however those in the richest 20% would see a saving of £480. 

Meanwhile the Institute for Fiscal Studies (IFS) said the measures announced by the Chancellor would not result in lower taxes for people in the long run.

IFS director Paul Johnson said there were "two paradoxes" in the statement, adding: "The Chancellor has managed to announce tax cuts without reducing the planned tax take from previous plans. And by saying nothing about spending, he is reducing the real-terms generosity of his plans for spending on public services."

He warned: "The cuts to income tax and National Insurance are effectively paid for by increasing revenues as a result of fiscal drag.

"The freezing of the income tax personal allowance and higher rate threshold turn out to be much bigger tax rises than first intended.

"As a result, almost all workers will be paying more tax on their earnings in 2025 than they would have been paying without this parliament’s reforms to income tax and NICs, despite the tax cutting measures announced."

Mr Johnson said that the Chancellor was being "considerably less generous" to public services by failing to announce any new spending, and sticking to previous announcements instead.

He added: "If he wants to be remembered as a tax reforming chancellor, so far he is headed in the wrong direction...In the face of what the OBR calls the biggest hit to household finances since comparable records began in 1956-57 he has done nothing more for those dependent on benefits, the very poorest, besides a small amount of extra cash for local authorities to dispense at their discretion. Their benefits will rise by just 3.1% for the coming financial year. Their cost of living could well rise by 10%.”

The Poverty Alliance said the statement showed the Chancellor had failed to grasp the reality for everyday people. 

Peter Kelly, the organisation's director, said:"By ignoring the tidal wave of rising living costs that is pulling so many people into poverty, the Chancellor has made clear his priorities. 

"His tax cutting agenda will generate positive headlines, but could see another 400,000 people across the UK swept into poverty. Ultimately, the Chancellor’s statement is a failure of courage, a failure of compassion, and a failure of justice."

The IPPR think tank added that the richest would see the most benefit from the new measures, while those already poor would see the least.

An analysis by the think tank found that those earning the least would get around £120 in help, while those earning the most would get £480. 

IPPR economists looked at the shortfall between the cost of living increase for families and the policies put in place to support them, finding that the poorest 20% of people were facing average household costs rising by £550 prior to the Spring Statement.

They said the Chancellor's measures would reduce those by £120, however those in the richest 20% would see a saving of £480. 

The Resolution Foundation think tank said the measures, while "significant" were "poorly targeted" and accused Mr Sunak of putting his "tax cutting credentials over support for the low-to-middle income households hardest hit by this cost of living storm."

Torsten Bell, the chief executive at the Res9olution Foundation, added: "Middle and higher income households will gain most from the rise in the National Insurance threshold, but only £1 in every £3 of additional support announced today will go to the bottom half of the income distribution. 

"“The Chancellor announced a bigger package of measures than expected, but it was a badly designed one with almost no new support for the poorest households. Higher earners will be hardest hit by tax rises, but it makes no sense to raise National Insurance while cutting Income Tax – 21s t Century Britain doesn’t need to do more to make things harder for workers, and easier for landlords.”