Laura Kuenssberg grills Rishi Sunak on taxation rise
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The Government today announced a new £500million winter support plan to help ‘the most in need’ households, but this has been met with criticism over a perceived lack of financial support for pensioners. Retirees are still reeling from the announcement that the state pension triple lock will not be honoured next year.
The Department for Work and Pensions (DWP) has said that the funds will be handled and distributed by individual councils, as they give out small grants to help families pay for food, clothing and utilities. Therese Coffey, the Work and Pensions Secretary said the fund is being implemented to support families who may still need help following the COVID-19 pandemic.
However, the announcement has been met with anger and criticism from some, who believe funds should instead be focussed on helping the elderly, who are already disgruntled over various policy changes which could hurt their pockets.
One Express.co.uk user, Mad marion said: “Cut out the middle man and give the money to pensioners on Pension Credit. They deserve it.”
Another user named PGD was unhappy with the amount of support given out to pensioners in comparison to other groups. They said: “£20 per week uplift to Universal Credit, half a billion pounds for ‘Vulnerable Families’, yet nothing again for the elderly.
“Over 17,000 state pensioners died from hypothermia last winter. They froze to death in their own homes unable to afford to ‘Heat and Eat’, and another million were hospitalised with malnutrition.
“Imagine 17,000 children dying from the cold in one year, but old people, no one fights for them, do they?”
A third user, simmo2 said that the Government has “stolen money from OAPs”.
Many pensioners have been angered by the announcement of the state pension triple lock being suspended for the 2022/23 tax year, meaning retirees will receive less state pension than they were originally expecting.
The triple lock is a Government guarantee that ensures the value of the state pension increases each year by the highest of three factors. These are average earnings growth, the rate of inflation and 2.5 percent. This was introduced in order to help pensioners retain their spending power over time as costs rise due to inflation.
However, due to a ballooning average earnings growth figure, the state pension was set to rise by as much as eight percent – a much higher increase than is normal under the triple lock. This is believed to be due to economic factors relating to the COVID-19 pandemic, as more people came off the furlough scheme and saw their income increase.
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Therefore, due to this statistical anomaly, the Government decided to temporarily suspend the triple lock for next year by ignoring the average earnings growth prong, in the process breaking a manifesto commitment from the 2019 election, when they promised to continue to honour the triple lock.
That means the state pension will now increase by the higher of inflation or 2.5 percent, essentially reducing the triple lock to a ‘double lock’ for next year.
Inflation rates are currently high and this is expected to be the figure which ends up being used as the rate of increase for state pension, with inflation for the year to August clocking in at 3.2 percent.
However, even if inflation goes to four percent as some have predicted, this will still represent roughly half of the rate of increase that pensioners were originally expecting.
Pensioners were dealt another blow when it was announced that people working past state retirement age, who had not previously had to pay National Insurance, would have to help pay the 1.25 percent National Insurance hike which is being used to fund a new Health and Social Care Levy.
Announcing the new Household Support Fund, Ms Coffey said that although the Government has helped “millions of people provide for their families” during the COVID-19 pandemic, there are some that still need further support.
She added that the fund is designed to help vulnerable households with essential costs, which is part of the push towards the “last stages of our recovery from the pandemic”.
Rishi Sunak, the Chancellor of the Exchequer said that the Government is “committed” to ensuring that everyone can afford the essentials, and that the new fund will serve as a “lifeline” for people who are struggling to pay the bills throughout the winter.
Mr Sunak added that by keeping Covid-related economic support in place up until September, the Government has helped Britons “well beyond the end of the roadmap, with more generous timelines than other countries in Europe”.
He also said that those in need of support from the new fund should contact their local council to find out how they can get access to the help they need.
While the new fund of £500million should offer some support to families experiencing financial hardship, it will cost the Government much less than the £6billion funding that it cost them to pay for the £20 uplift in Universal Credit, which ends next week.
The announcement comes as the furlough scheme ends on September 30, which may mean more people become unemployed, with an estimated 1.5 million people still reliant on the job retention scheme.
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