By Rebecca Hannant
MANY people will be facing hardship this winter despite a package of measures announced in the mini-budget, a local charity has suggested.
On Friday, September 23, the Government announced a package of the “biggest tax cuts in generations” as part of its Plan for Growth.
In his ﬁrst fiscal statement as the new Chancellor, Kwasi Kwarteng unveiled cuts to income tax, National Insurance, corporation tax, and changes to Universal Credit.
The biggest changes will see a cut in the basic rate of income tax from 20 per cent to 19 per cent in April 2023. Meanwhile, the 45 per cent top rate of tax will be abolished, meaning those earning above £150,000 will have their taxes cut by five per cent to 40 per cent, alongside those who earn between £50,271 and £150,000.
The recent 1.25 percentage-point rise in National Insurance will also be reversed from November. The proposed rise in corporation tax which was due to increase from 19 per cent to 25 per cent in April 2023 will also be scrapped.
The plans also include changes to benefits with rules around Universal Credit being tightened and tougher sanctioning if people do not follow job search commitments.
Around 120,000 more recipients of Universal Credit will also be asked to take more steps to gain more work or risk being sanctioned.
The Chancellor also further explained that the previously announced energy price cap would limit everyone’s energy bills by £1,400 this year by reducing the expected average annual household energy bill to £2,500 until 2024. In addition to this support, energy bills for businesses, hospitals, schools and charities will be kept to less than half expected levels until at least March 2023.
Mr Kwarteng also announced that limits on bankers’ bonuses would be scrapped.
The Government believes that these changes, alongside changes in investment and stamp duty, will ensure that the UK economy grows by 2.5 per cent a year.
In his statement to Parliament, Mr Kwarteng said: “Economic growth isn’t some academic term with no connection to the real world. It means more jobs, higher pay, and more money to fund public services, like schools and the NHS.
“This will not happen overnight but the tax cuts and reforms I’ve announced today – the biggest package in generations – send a clear signal that growth is our priority.”
Beverley and Holderness MP Graham Stuart said that by reducing the basic rate of income tax by one per cent and reversing the rise in National Insurance, residents in Beverley and Holderness would, on average, be £500 better off next year.
He said: “The Government has taken the first step to make the UK an aspiration nation. By giving families and businesses much-needed support with their energy bills, reducing taxes for millions of workers, and making buying a house more affordable, this Government is supporting the residents of Beverley and Holderness.”
But charities including the Shores Community Pantry in Withernsea, which is continuing to see an increase in the number of people using its food bank, said many people were still extremely worried about the coming months.
Shores CEO Jayne Nendick told the Gazette last month that those using the food bank were those who would normally donate, such as teachers, nurses and other key workers, whose salaries are not keeping pace with the increasing cost of living.
In response to the mini-budget, Jayne said: “There are a lot of people expressing concern. Down every street across the UK there are a lot of people in hidden poverty. Even with the caps in place, energy bills are still significantly higher than a year ago. A lot of people are very worried.
“There is not one person that isn’t thinking about the price increases and taking steps to help themselves and make cuts.”
She added that the cost of living will still exceed wages, forcing people into hardship and prompting them to turn to places like the Shores Pantry and the food bank.
However, Jayne added that people among the community were still strong and were continuing to help the pantry and make donations.
She said: “When the cards are down locally, we see that community spirit. These challenges show us what the community is really like.”
As part of the Shores Centre’s activities to help those in need, the pantry will be running a twice-weekly Brew at Two event where people can pop in for a chat and ask for advice about any concerns they have.
The Brew at Two event will also be running on Thursday this week where a Citizen’s Advice adviser will be available to help.
The national TV cameras will also be in Withernsea this week, as Jayne discusses the issue on Good Morning Britain (GMB).