This week, a member of the Tory-voting audience in the BBC leadership debate said the following: “I’m really happy the government have basically contributed towards universal credit and people on benefits, but I’m a single parent, I work full-time and I travel and I’m struggling.” It’s true that all but the richest people are struggling with soaring inflation. But the question implied something else: that those on universal credit are managing, that the state looks after them, while those who earn their living have to struggle.
The facts, according to the Resolution Foundation, are these: “The basic level of benefits is now just £77 per week – only 13% of average pay and its lowest level on record.” Inflation, meanwhile, has hit the poorest people hardest because those with least spend the highest proportion of their income on energy and food and these prices have rocketed. And people who are low-earners earn too little to pay much or any income tax, so Liz Truss’s vaunted cuts barely touch them. Here’s the truly staggering tax cut fact that she hasn’t been challenged on. Of Truss’s colossal £30bn cut, £19bn would go to business through the cancelling of the corporation tax rise. And 85% of the £8bn cost of scrapping the national insurance rise would go to the top half of all earners, with the top 5% getting 28% of it; the bottom half of earners would get just 15%.
