The Resolution Foundation has projected a £1,900 drop in household incomes by the end of this parliamentary term compared to its commencement, setting a distressing precedent for

declining living standards.

According to the independent think tank, Chancellor Jeremy Hunt's revisions in the Autumn Statement, which included a National Insurance reduction, are poised to impose unrealistic reductions in public sector spending in the upcoming parliamentary session.

In response to the Autumn Statement, the Resolution Foundation cautioned that the current parliament is on track to witness a historic decline in real household disposable incomes, marking an unprecedented downturn.

While acknowledging the government's tax cuts intended to bolster individual finances, the Foundation highlighted that despite the £20 billion in tax reductions announced, the government has already introduced tax hikes amounting to £90 billion. This trend, they estimate, will lead to an equivalent of £4,300 per household in increased taxes between 2019-20 and 2028-29.

The think tank emphasized that the Chancellor's tax adjustments were achieved at the expense of curtailed public spending growth, resulting in significant budget reductions projected for departments such as justice, local government, and the Home Office, facing a collective £17 billion cut by 2027-28.

Contrarily, the Office for Budget Responsibility (OBR), the government's economic forecaster, suggested an overall increase in the tax burden for households, foreseeing the tax burden reaching its highest level in the post-war era.

In response, Chancellor Hunt defended the government's stance, citing necessary actions taken during the pandemic and the ongoing impact of global events. He affirmed that tax increases were short-term and that the National Insurance cuts would inject more money into people's pockets.

Highlighting the National Insurance reduction as a catalyst for employment, Hunt underscored its role in addressing job vacancies, indicating the government's focus on stimulating economic growth to alleviate the tax burden in the long run.