The Chancellor’s proposed cuts to income tax will “disproportionately benefit” society’s wealthiest, according to an analysis by the Greater London Authority (GLA).
Figures showed that, by introducing a 1p cut, those on a £150,000 per year salary would have a tax relief of £1,950 while those earning the least would not see any benefit.
“Tomorrow’s Fiscal Statement is a chance for the government to introduce a package of measures that will make a tangible difference to millions of Londoners struggling to make ends meet during this cost of living crisis,” said London mayor Sadiq Khan, as he called on Kwasi Kwarteng to deliver a fairer support package.
“Rather than focussing on unfunded tax giveaways for the most wealthy, we need to see immediate and comprehensive help for those who need support the most.”
According to Khan, Kwarteng should focus instead on free school meals as well as uplifting the Universal Credit in line with inflation and introducing a lifeline tariff to ensure everyone gets a basic amount of free energy.
Khan’s words were echoed by Karl Handscomb, senior economist at the Resolution Foundation.
“Now, the Chancellor’s renewed focus on income tax cuts – which will primarily benefit richer households, while providing the least benefit to those who are already struggling – increases the risk that many will miss out on the help they need, both this winter and beyond.”
City A.M. has approached the Treasury for comment.
The mayor’s remarks come at a particularly difficult time for the UK.
Millions of Britons are in fact facing the worst cost-of-living crisis in 40 years, as inflation rates reached 10.1 per cent before going down to the current 9.9 per cent.
To help households and businesses cope with an extremely difficult winter, plagued by soaring energy costs, Prime Minister Liz Truss recently introduced a £2,500 cap for households’ energy bills.
Business also received government support in the form of a six-month emergency package, which will provide a discount on wholesale gas and electricity prices, City A.M. reported.