Spring Statement: Rishi Sunak accused of not doing enough for poorest households

Rishi Sunak has been accused of not doing enough to help the poorest as the cost of food and energy increases at its fastest rate for 30 years.

The Resolution Foundation and Institute for Fiscal Studies think-tanks said he could have done more to protect those hit hardest by rising costs.

Planned increases in benefits will be much smaller than the rise in the cost of living this year.

Mr Sunak said tax cuts this year would help those on low wages the most.

He said his plans to raise the point at which workers start paying National Insurance would particularly help people on low and middle incomes.

And he said it was impossible for him for "fully compensate" people for spiralling energy costs, a challenge the UK was "not alone" in facing.

Prime Minister Boris Johnson also hinted more help for people struggling was on its way in the coming months.

"The cost of living is the single biggest thing we're having to fix, and we will fix it," the prime minister told LBC Radio, adding: "As we go forward, we need to do more".

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Watch: Sunak defends measures set out in Spring Statement

Mr Sunak sought to address the rising cost of living in his Spring Statement on Wednesday, cutting 5p from fuel duty and taking some of the sting out of April's National Insurance rise by increasing the point at which workers have to start paying it.

But he has faced calls from opposition MPs to do more to help people now, as inflation is predicted to hit more than 8% by end of the year and UK living standards are predicted by the Office for Budget Responsibility to fall faster than at any time since the 1950s.

The Institute for Fiscal Studies' (IFS) director Paul Johnson said that overall the measures set out by Mr Sunak - including council tax and energy bill rebates announced last year - amounted to a "relatively modest giveaway" of around £5bn.

Bur he said it will "not be enough to protect poorer households from a significant hit to their living standards".

And, despite the chancellor's rhetoric about cutting taxes, they were set to rise their highest level as a share of national income since the 1940s, when Britain was emerging from the Second World War.

New analysis from the Resolution Foundation also suggests that 1.3 million more people would be pushed into "absolute poverty" from April - defined as having an income less than 60% of the middle-earner in 2010-11.

But the chancellor said needed to been seen in the context of the "biggest economic shock in over 300 years" due to the Covid.

Speaking to the BBC, he said borrowing had spiralled to its biggest level since the Second World War due to spending to support the economy during pandemic.

"It's unsurprising that dealing with the aftermath of that is also pretty exceptional," he added.

Watch: How the Ford family is coping with the cost of living

Mr Sunak also used Wednesday's statement to promise to cut 1p in the pound from income tax by the next general election in 2024, when he said the UK economy would be in better shape than it is now.

Labour's shadow chancellor Rachel Reeves said Mr Sunak had failed to understand the scale of the cost of living crisis.

"I think most people are looking at their pay packets now and looking at their taxes, and saying these promises in the future are not going to help me pay these bills this year," she told the BBC.

"I was incredibly surprised that the chancellor didn't do anything yesterday with rising gas and electricity bills, when the profits being made by North Sea oil and gas companies are at near-record highs."

Watch: Labour says Sunak is a tax raising chancellor, following the Spring Statement

Mr Sunak insisted the measure he announced on Wednesday would protect the most vulnerable.

"It's absolutely right we support people on the lowest incomes. I'm confident that the policies we put in place are doing that," he told Today.

He insisted that the energy bill rebate announced recently would also "help people meet the rising price of energy", when the price cap changes in April.

Asked if he would provide further help with energy bills before October, he said: "We will have to see where we are in the autumn."