Chancellor has made an ‘historic mistake’ and families will suffer, says Labour

Rachel Reeves has accused Rishi Sunak of “making an historic mistake” by failing to scrap a tax hike on jobs, warning families will “endure significant hardship” within days.

The shadow chancellor told MPs about “Alice In Sunak-land” and described it as a place where “nothing is quite as it seems”, as she criticised his spring statement for failing to help workers, pensioners and businesses.

Ms Reeves also branded Mr Sunak “Ted Heath with an Instagram account”, and suggested he had fallen short of meeting the expectations of his Tory predecessor Nigel Lawson, whose portrait is in the Chancellor’s No 11 office.

“It’s the sort of place where a Chancellor celebrates giving people £200 to help them with their spiralling energy bills before explaining he needs it all back.

“In Sunak-land, the Chancellor claims ‘I believe in lower taxes’ while at the same time hiking Alice’s national insurance contributions. So Alice asks the Chancellor ‘when did lower taxes mean higher taxes, has down really become the new up?’

“The Chancellor follows Humpty Dumpty’s advice and says ‘when I use a word, it means just what I choose it to mean – neither more nor less’.

“Alice knows that under the Conservatives, taxes are at their highest level in decades as a result of the policies of this very same Chancellor.”

Ms Reeves added: “As Alice climbs out of the rabbit hole to leave Sunak-land, she recalls the words of the white rabbit and concludes that perhaps the Chancellor’s reality is just different from yours.

“The actual reality is that this Chancellor’s failure to back a windfall tax and his stubborn desire to pursue a national insurance tax rise are the wrong choices.

“His national insurance tax rise was a bad idea last September and he’s admitted it’s an even worse one today.

“The Chancellor is making an historic mistake. Today was the day to scrap the tax rise on jobs, today was the day to bring forward a windfall tax, today was the day for the Chancellor to set out a plan to support British businesses.

“But, on the basis of the statement today and the misguided choices of this Chancellor, families and businesses will from now on endure significant hardship as a result.”

Conservative Mel Stride, who chairs the Treasury Select Committee, broadly welcomed the statement – including the 5p per litre fuel duty cut.

He added: “I, along with many others in this House, would like to have seen the national insurance increases for next year to have been scrapped in their entirety but I have to say the increase in the threshold (Mr Sunak) has announced today has been very significant indeed, and far more significant than I imagined that it would be.”

Labour former shadow chancellor John McDonnell warned “lives will be put at risk” as he urged Mr Sunak to “double the winter fuel allowance”.

Mr Sunak replied: “The doubling in the size of the Household Support Fund is there for his local council and others to support those most in need.”

He went on to highlight further support on energy bills.

Conservative former minister Sir Edward Leigh asked if the Government would consider “some sort of tax relief” on the cost of minor operations if people have been waiting for a long time for the treatment on the NHS.

He told the Commons the economy is facing challenges from “at least two of the four horsemen of the apocalypse, death from plague and war”.

Conservative former Cabinet minister Robert Jenrick said: “I think when the Chancellor gets back to his office, that portrait of Nigel Lawson will be looking admiringly on him. This is a Conservative plan that we can all get behind.”