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Imminent tax and benefit cuts set to hit families hard and benefit the richest

Families will be hardest hit by the new tax cuts. Credit: PA

A raft of tax and benefit cuts come into play this week - several of which are the legacy of George Osborne.

The combined cuts are estimated to cost the government £1 billion this year (the government loses £2bn from tax cuts but gets £1bn from its welfare cuts).

So who benefits?

Chancellor Philip Hammond (l) and predecessor George Osborne Credit: PA

The Resolution Foundation has crunched the numbers, analysing the impact of these combined measures on different income groups given the inflationary environment we now experience.

Now they have shared their findings with me.

Assuming their number crunching is correct (their figures include the National Living Wage) it’s a story of the richest half of society becoming better off and the poorest third worse off.

Those with children will be particularly hard hit.

A number of tax and benefit cuts come into play this week. Credit: Resolution Foundation

The impact of many of these changes will of course be being magnified by higher inflation – currently running at 2.3% - which will hit the poorest in society this year in two ways:

Their benefits in real terms are worth less (because of the freeze) and their cost of living is going up.

In November last year Iain Duncan Smith warned about this and said the government should reconsider the freezes as a result.

As yet they haven’t.