Poverty

Treasury written question – answered on 19th April 2022.

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Photo of Rachel Reeves Rachel Reeves Shadow Chancellor of the Exchequer

To ask the Chancellor of the Exchequer, whether his Department has made an assessment of the potential change in the estimated number of (a) adults and (b) children living in relative poverty after housing costs between 20210-22 and 2022-23.

Photo of Rachel Reeves Rachel Reeves Shadow Chancellor of the Exchequer

To ask the Chancellor of the Exchequer, whether his Department has made an assessment of the potential change in the estimated number of (a) adults and (b) children living in absolute poverty after housing costs between 2021-22 and 2022-23.

Photo of Simon Clarke Simon Clarke The Chief Secretary to the Treasury

HM Treasury distributional analysis published at Spring Statement 2022 shows that in 2024-25, government decisions since Spending Round 2019 will have benefitted the lowest-income households the most, as a proportion of income. Our modelling also shows that:

  • the poorest 60% of households receive more in public spending than they contribute in tax.
  • Households in the lowest income decile will receive more than £4 in public spending for every £1 they pay in tax, on average.
  • The impact of government policy since Spending Round 2019 on the bottom four deciles is expected to be worth more than £1,000 a year, while there will have been a net benefit on average for the poorest 80% of households.
  • On average, the combined impact of personal tax and welfare decisions made since Spending Round 2019 is progressive, placing the largest burden on higher-income households as a proportion of income.

With around 1.3 million vacancies across the UK our focus is firmly on supporting people into and to progress in work as we know that work is the best and most sustainable route out of poverty. The government’s Plan for Jobs, Way to Work campaign and £3.8 billion investment over the parliament in skills by 2024-25 is helping do this.

The government is also providing support worth over £22 billion in 2022-23 to help families with the cost of living. This includes providing millions of households with up to £350 to help with rising energy bills, a reduction in the Universal Credit taper rate and freezes to alcohol duty. The Spring Statement went further, with the government announcing an increase to the annual National insurance Primary Threshold and Lower Profits Limit to £12,570, a cut to fuel duty, and an additional £500 million to help with the cost of essentials through the Household Support Fund. In addition, the National Living Wage has increased to £9.50 an hour from April 2022. This means an increase of over £1,000 to the annual earnings of a full-time worker on the NLW.

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