Spring statement fails to prioritise those who most need support

Press Release | Chancellor Rishi Sunak’s spring statement fails to prioritise people who will need the most help in our challenging financial climate, campaigners have said.

CARE, a charity that provides social policy analysis from a Christian perspective, says low-income families will benefit least from a £6bn support package announced today.

Around two thirds of the money will benefit the top 50 per cent of the population, CARE warns, whilst one third will go to those in the bottom half of income distribution.

The charity also notes that a planned increase in the National Insurance contributions (NIC) threshold will also benefit the wealthiest in society the most.

Tim Cairns, Senior Policy Officer at CARE, comments:

“Whilst it is welcome that the Chancellor has announced a £6 billion package to help with the cost-of-living crisis, he has failed to target that help to the people who need it most. Raising tax thresholds is a blunt instrument that fails to target support to those feeling financial strain. Around two thirds of the £6 billion will benefit the top 50% of the population with only one third of the money going to those in the bottom half of income distribution.

“A much better way of helping people would be to target those people in poverty with children. The Chancellor could have raised child benefit, which has not been increased in over 10 years. This would target money at families who are struggling most. Any increase in the NIC threshold benefits households without children as much as it does families. This is because of the individualised nature of our tax system, which does not consider how many people live in a household.

“An increase in the NIC threshold does not provide as much benefit for those on tax credits as it does for people on higher incomes. The increase in take home pay will result in a loss of tax credits. For some of the poorest, the increase in the NIC threshold will mean they only keep 45% of the Chancellors NIC dividend, while those who are wealthier will keep it all.

“At a time when creativity was needed to help families, it is disappointing that the Chancellor did not choose to do more to help families in poverty, the current cost of living crisis is hitting families hardest, they deserved better.”

ENDS

Notes to Editors

CARE is a Christian charity providing resources and helping to bring Christian insight and experience to matters of public policy.

For the past ten years, it has produced expert analysis of the income tax system and wider fiscal policy affecting families.

For more information or to arrange an interview, contact Jamie Gillies: jamie.gillies@care.org.uk