ITV News Political Correspondent Shehab Khan on the day after the big announcement
Decisions outlined in the chancellor's spring statement are set to push more than one million people into poverty, a think tank has calculated.
Rishi Sunak's measures, set out in Wednesday's 'mini-budget', represented a "big but poorly targeted policy package” which does not go far enough to help low-income households who have been hit hardest by the cost-of-living crisis, according to the Resolution Foundation.
In his Commons statement on Wednesday, Mr Sunak announced a 5p cut in fuel duty and an increase in the threshold at which people pay national insurance contributions, benefiting around 30 million workers with a tax cut worth more than £330.
He also promised further support in 2024 with a pledge to cut the basic rate of income tax from 20p in the pound to 19p – “a £5 billion tax cut for over 30 million people”.
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But according to the think tank's analysis, the chancellor's measures do not meet the scale of the cost-of-living squeeze, with 1.3 million Britons set to fall below the poverty line next year, including 500,000 children – the first time Britain has seen such a rise outside of a recession.
It also determined that only one-in-eight workers will actually see their tax bills fall by the end of the parliament.
"Considering all income tax changes to thresholds and rates announced by Rishi Sunak, only those earning between £49,100 and £50,300 will actually pay less income tax in 2024-25, and only those earning between £11,000 and £13,500 will pay less tax and national insurance", the analysis says.
“Of the 31 million people in work, around 27 million (seven-in-eight workers) will pay more in income tax and (national insurance) in 2024-25.”
The think tank added that typical working-age household incomes are set to fall by 4% in real terms next year, while incomes in the poorest quarter of households are expected to fall by 6%.
Resolution Foundation chief executive Torsten Bell said Mr Sunak had "prioritised rebuilding his tax-cutting credentials over supporting the low-to-middle-income households who will be hardest hit from the surging cost of living".
Responding on Thursday to the suggestion that he did not create a buffer for the people who need it most in his spring statement, Mr Sunak told ITV News that the government was "on people's side".
"I know things are difficult right now, and I've always been honest with people that it's tough for me to fully protect everyone against the global challenges that we face," he said.
"But I do believe the tax plan we announced will make a significant difference to tens of millions of people across our country - cutting fuel duty, putting more money in people's pockets with the changes to National Insurance and income tax to come, and more money for local councils or all those most in need. This government is on people's side at this difficult time."
"This government is on people's side" - Chancellor Rishi Sunak insists his tax plan will help "tens of millions".
Shadow chancellor Rachel Reeves branded Rishi Sunak a "tax-raising chancellor" on Thursday as she warned of a "disaster" for working people after the spring statement.
The Labour MP for Leeds West said she had already had constituents telling her they were having to skip meals to ensure their children eat.
"People are having to make impossible choices right now and there'll be deep disappointment that there's neither help nor any more help coming, ensuring that people's incomes and benefits are keeping pace with the rising cost of living," she said.
ITV News Business and Economics Editor Joel Hills responds to the analysis by Resolution Foundation.
Boris Johnson admitted "we need to do more", to help people through the cost-of-living squeeze, and has insisted the government will "fix" it.
He told LBC: “I think that the cost of living is the single-biggest thing we’re having to fix and we will fix it.
“But one of the best ways of fixing the cost of living pressures today, is to make sure that people are in a high wage, high skilled jobs and there we’re making a huge amount of progress".
Asked if Rishi Sunak would announce further tax cuts before the election, he said: “I’m not going to anticipate anything the chancellor does".
Senior Welfare Benefits Specialist Anna Stevenson from charity Turn2us offers advice for those who might not be able to afford their bills next month.