Households across the UK will be £870 worse-off despite Jeremy Hunt’s tax cuts in yesterday’s Spring Budget, the Labour Party has claimed.
The Chancellor announced a wave of new fiscal measures including a reduction in the rate of National Insurance and capital gains tax (CGT).
National Insurance for workers has been slashed once again from 10 per cent to eight per cent which will benefit 27 million people, while the higher rate of CGT will pay 24 per cent.
Despite this, the Conservatives’ Budget has come under fire from the main opposition party which has questioned how the Government is funding these pledges.
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Labour is taking Mr Hunt to task over his Spring Budget
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Later today, the Labour Party is expected to roll out posters accusing the Tories of a “betrayal” when it comes to managing the economy.
Other measures introduced by Mr Hunt in the Budget included the current non-dom tax status system being abolished, fuel duty being extended and a hike to the Child Benefit threshold.
With the most recent and upcoming cut to National Insurance combined, the average worker is forecast to make a saving of around £900 a year.
Despite this latest round of tax cuts, the Labour Party has claimed families will still be £870 poorer this year.
Reacting to the Budget, shadow chancellor Rachel Reeves took aim at Prime Minister Rishi Sunak’s record on the economy.
She said: “For every extra £10 people are paying in tax they are only getting £5 back and the average household will still be £870 worse off under Rishi Sunak's tax plan.
“It's just a cynical gimmick from a weak prime minister who is desperately trying to cling onto power.”
In his Budget statement, Mr Hunt said: "Because Conservatives believe that making work pay is of the most fundamental importance, because we believe that the double taxation of work is unfair, our long-term ambition is to end this unfairness.
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Chancellor Jeremy Hunt outlined his Spring Budget yesterday
PA“When it is responsible, when it can be achieved without increasing borrowing and when it can be delivered without compromising high-quality public services, we will continue to cut national insurance as we have done today so we truly make work pay."
However, the Chancellor has come under fire for introducing tax cuts while keeping bands frozen their current levels.
Experts have cited the impact of fiscal drag when tax allowances remain the same, while wages rise at the same time.
This has led to taxpayers being dragged into higher tax brackets and paying more of their hard-earned cash to HM Revenue and Customs (HMRC).