Philip Hammond’s budget, which was billed as marking an end to austerity, will actually benefit rich families 14 times more than the poor, new analysis has revealed.
The Resolution Foundation crunched the numbers on the latest budget finding almost half of the income tax are set to go to the top ten per cent of households.
Households in the top cohort will gain £410 from income tax and benefits changes announced yesterday, whereas those in the poorest ten per cent will gain just £30.
Today the Chancellor admitted higher earners will “get a bit more” after putting much of the focus in parliament on a promise to raise the tax-free personal allowance in Income Tax – which hands £130 a year to any worker earning over £12,500 from April.
But he also followed through on a pledge to hike the 40p tax rate threshold from £46,350 to £50,000, meaning the richest 13 per cent of Brits will be able to earn much more before they start paying higher tax – gaining £860 a year.
Resolution Foundation director Torsten Bell warned the Budget “spelt an easing rather than an end to austerity”.
He added: “Income tax cuts announced yesterday will overwhelmingly benefit richer households, with almost half of the long term gains going to the top ten per cent of households.
“On public services the NHS saw a big spending boost – but unprotected departments still have further cuts penciled in.”