The Chancellor has announced that the universal credit taper rate will be reduced from 63p to 55p.

Calling it a “hidden tax on work”, Rishi Sunak said the policy would be “introduced within weeks, no later than 1st December”.

Hinted at earlier in the day by some reports, the reduction was more than the 60p many thought it would be.

In other announcements, the Chancellor unveiled a £24bn “multi-year housing settlement”, including £11.5bn Affordable Homes Programme and £1.8bn brownfield land building fund.

The Chancellor also announced a £5bn pot of funding to “remove dangerous cladding”, partly made up of the Residential Property Developer Tax for developers with profits over £25m, at a rate of 4%.

There was also “an 85% increase in spending compared to 2019” for rough sleeping and homelessness, with £640m per year being committed.

Katie Schmuecker, Deputy Director of Policy & Partnerships at JRF said: “This is a tale of two Budgets for families on low incomes.

“For those in work, the change to the taper rate and work allowance, alongside the National Living Wage increase, are very positive steps, allowing low-paid workers to keep more of what they earn.

“Together these measures improve our social security system for working families and demonstrate a serious intent to turn the tide on the pre-pandemic trend of rising in-work poverty.

“But the reality is that millions of people who are unable to work or looking for work will not benefit from these changes. The Chancellor’s decision to ignore them today as the cost of living rises risks deepening poverty among this group, who now have the lowest main rate of out-of-work support in real terms since around 1990.

“Among the people in our society who cannot work are cancer patients, people with disabilities and those caring for young children or elderly parents.

“Their energy bills and weekly shop are going up like everyone else’s and they face immediate hardship, hunger and debt in the months ahead. The Chancellor had an opportunity to support families on the lowest incomes to weather the storm ahead, and he did not take it.”

Ben Beadle, Chief Executive of the National Residential Landlords Association, said: “Today’s announcement is welcome news for those private tenants who have struggled to afford their rents throughout the pandemic, despite private rents falling in real terms.

“However it does not undo the damage that previous decisions to freeze housing benefit rates in cash terms will cause. It is simply bizarre to have a system in which support for housing costs will no longer track market rents. The Chancellor needs to undo this unjust policy as matter of urgency.”