UK Treasury boss defends plan to ease cost of living crisis
LONDON (AP) — Britain’s Treasury chief is defending his spending priorities after critics attacked him for not doing enough to help families struggling with the biggest drop in living standards on record.
Chancellor Rishi Sunak said on Thursday he understands families are struggling with rising prices, but his options are limited as he focuses on bolstering public finances after the COVID-19 pandemic. At the same time, the government is increasing spending on health care, law enforcement and schools, he said.
“I think most people will understand that an exceptional experience like (the pandemic) leads to an exceptional response and that’s what we’re dealing with right now,” Sunak told Sky News. “But we also continue to invest in public services…and that, of course, has to be paid for.”
Sunak on Wednesday announced a package of measures aimed at reducing the pressure on consumers, including a reduction in fuel taxes, more money for local government assistance to low-income residents and raising the threshold at which workers start paying social insurance contributions.
But he hasn’t taken bolder steps such as postponing a 1.5% income tax hike that was due to take effect in April or introducing a windfall tax. energy companies benefiting from soaring oil and natural gas prices.
The new spending plans were announced as the Independent Office for Budget Responsibility said inflation would reduce household disposable incomes by 2.2% this year, the biggest drop in living standards since the start of the recordings in 1957.
The Resolution Foundation, a think tank focused on improving living standards, said the lack of support for low-income families could see 1.3 million people fall below the poverty line this year.
“The bigger picture is that Rishi Sunak has prioritized rebuilding his tax-cutting credentials over supporting low-to-middle income households who will be hardest hit by the soaring cost. of life, while allowing budget flexibility in the years to come,” chief executive Torsten Bell said in a statement.
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