Video report by ITV News Political Correspondent Carl Dinnen
The chancellor has been labelled "Scrooge Sunak" by the Institute for Fiscal Studies (IFS) over his move to cut spending and raise taxes by nearly £50 billion, set out in the Budget.
Paul Johnson, director of the IFS, said that including the recent cuts to planned spending announced in the autumn, the chancellor announced fiscal tightening of almost £50 billion relative to his pre-pandemic plans of March 2020.
He said it was a "tale of two budgets", with £65 billion spent on Covid-19 support but also a fiscal tightening of over £30 billion unveiled relative to previous plans.
"Santa Sunak, purveyor of billions today looks more like Scrooge Sunak," he said.
The economist added that two big tax increases announced in the Budget on Wednesday were "both screeching U-turns on Conservative policy over the last decade" with a rise in corporation tax of "historic proportions".
Mr Sunak said he needed to be "honest" with the public about how "hard" the pandemic had hit the UK economy and in a bid to repair damaged finances he set out how corporation tax would raise corporation tax for big firms from 19% to 25% in 2023.
He also explained that income tax thresholds would be frozen, meaning up to 1.3 million people could be forced into paying tax on their wages when inflation rises, dragging them into the lowest bracket.
More people on higher salaries will be dragged into the highest income tax bracket when thresholds are frozen.
It was described as a "give now, take later" Budget by ITV News Political Editor Robert Peston, due to the financial support provided to see the UK through to the end of lockdown, and the huge tax hikes that will come there after.
Watch Rishi Sunak deliver the Budget in full:
The Office for Budget Responsibility (OBR), a government body set up to provide independent economic forecasts, said the move to freeze income tax thresholds will bring 1.3 million people into the tax system and create one million higher rate taxpayers by 2025-26.It also said the corporation tax rise will raise to 3.2% of GDP in revenue by 2025-26 - its highest since 1989-90.
The chancellor unveiled a three-point plan to support people beyond the end of lockdown, fix the decimated public finances and to rebuild the economy.Among the billions pledged, the most significant commitments are:
Extension of the furlough scheme until September
Extension of self-employment help
More business grants
Universal credit £20 uplift extended
Outlining his plan, Mr Sunak told the Commons: “First, we will continue doing whatever it takes to support the British people and businesses through this moment of crisis.
“Second, once we are on the way to recovery, we will need to begin fixing the public finances – and I want to be honest today about our plans to do that.
“And, third, in today’s Budget we begin the work of building our future economy.”
The IFS said Mr Sunak had done a "decent job" in supporting the UK through the pandemic, but spending plans to help address the battered public finances following the crisis "do not look deliverable, at least not without considerable pain".
"How he is actually going to fix the public finances remains to be seen," Mr Johnson added.
The IFS also criticised Mr Sunak's lack of announcements to tackle the long-term consequences of the pandemic.
Mr Johnson said this was a "hole that needs to be filled and soon".
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