Chancellor faces questions on Budget after insisting 'our plan is working'

28 October 2021, 05:33 | Updated: 28 October 2021, 06:35

The Chancellor announced his Budget yesterday
The Chancellor announced his Budget yesterday. Picture: Alamy

By Daisy Stephens

Chancellor Rishi Sunak is facing questions on Thursday morning in a series of broadcast interviews, after an independent Government agency said his plans would leave the overall tax burden at its highest since 1950.

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Despite the Chancellor's promise that his "plan was working", the Office for Budget Responsibility (OBR) said the Budget would leave the overall tax burden at its highest since the final period of Clement Attlee's post-war Labour administration 70 years ago.

The Resolution Foundation warned "that Britain could be set for a flat recovery for household living standards".

The OBR also said the plans will take public spending to the highest share of the economy since the late 1970s, before Margaret Thatcher took power for the Tories.

You can listen to LBC's Nick Ferrari questioning Mr Sunak at 8.20am live on Global Player.

Setting out his plan for the nation's finances in a speech on Wednesday, Mr Sunak warned of "challenging months ahead" as the country continues its recovery from the coronavirus pandemic.

The Chancellor made a number of key announcements, including an increase in the minimum wage, a rise in per-pupil spending in schools and a cut to the taper rate for Universal Credit, meaning claimants can keep more of their money as their wages increase - something Prime Minister Boris Johnson labelled "terrific".

Mr Sunak also announced an overhaul to the UK's system for taxing alcohol, cutting the number of duty rates from 15 to six and employing a simplified model where higher-strength drinks will have a higher tax rate.

Read more: Budget 2021: What were the key announcements?

Addressing a crowded House of Commons, Mr Sunak said: "Employment is up. Investment is growing. Public services are improving. The public finances are stabilising. And wages are rising.

"Today's Budget delivers a stronger economy for the British people: stronger growth, with the UK recovering faster than our major competitors.

"Stronger public finances, with our debt under control. Stronger employment, with fewer people out of work and more people in work. Growth up, jobs up, and debt down.

"Let there be no doubt - our plan is working."

Rishi Sunak's budget was 'very clever politically', says economist

One familiar face was missing amongst the sea of MPs - Keir Starmer was not present after testing positive for Covid-19 moments before PMQs began at midday.

Labour's response to the Budget therefore fell to Shadow Chancellor Rachel Reeves.

She attacked Mr Sunak's spending plans, saying "millions" of people would struggle to pay their bills in winter and that "working people are left out in the cold".

Read more: Sir Keir Starmer misses PMQs after testing positive for Covid

Read more: As it happened: Rishi unveils £150bn spending but warns of ‘challenging months ahead’

"Never has a Chancellor asked the British people to pay so much for so little," she added.

"The highest sustained tax burden in peace time. And who is going to pay for it? It is not international giants like Amazon, no, the Chancellor has found a tax deduction for them.

"It is not property speculators, they already pocketed a stamp duty cut and it is clearly not the banks, even though bankers bonuses are set to reach a record high this year.

"Instead, the Chancellor is loading the burden on working people. A national insurance tax rise on working people, a council tax hike on working people, and no support today for working people with VAT on their gas and electricity bills."

Ed Miliband, who stood in for Keir Starmer at PMQs, said Mr Sunak's Budget was a 'failure'.

"Another Budget from the Chancellor which failed on both the cost of living crisis and the climate crisis," he tweeted.

"No green recovery, no plan to save families £400 on bills, no plan for green steel.

"Working people will pay the price of Tory climate delay."