A statement of lack of intent from Sunak

Rishi Sunak was always going to have to tackle the cost of living crisis in his Spring Statement and the big questions were how and who would benefit.

Faced with a choice between measures that would benefit the well-off, those on middle incomes and the least well-off, the chancellor did a bit for the first and second groups but more or less ignored the third.

He chose to increase the threshold for National Insurance at a cost of around £25bn over the next five years and followed that up with a 1p cut in the standard rate of income tax at a cost of more than £17bn over the three years from just before the next election in 2024 – though his previous decisions to freeze the tax thresholds and increase NI rates mean these tax ‘cuts’ were really tax rises.

Of the three new measures that he billed as ‘helping families with the cost of living’, the temporary 5p cut in fuel duty (£2.4bn next year) and cut in VAT on energy efficiency materials (£280m over the next five years) are good news if you can afford a car or improvements to your home but not much use otherwise.

The £500m increase in the Household Support Fund in 2022/23 will enable local authorities to help the most vulnerable households with the cost of essentials but it is a drop in the ocean compared to his action (or lack of it) on benefits in general.

To put this in perspective, the Office for Budget Responsibility (OBR) forecasts that average real disposable incomes will fall by 2.2 per cent next year, the most since records began.

However, the squeeze on benefits will be much greater than that.