Eighteen million families will be worse off by an average of more than £150 a year from tax and benefit changes over the next two years, unless the Government finds the money to extend last week's 'one-off' income tax cut and to continue topping up the winter fuel allowance, according to analysis by IFS researchers.

The increase in the personal income tax allowance announced on May 13 means that (using Treasury costings) the Government is now giving away £5.5 billion this year through the various income tax, National Insurance, tax credit and benefit changes announced in Budget 2007 and subsequently - the largest such package since the general election year of 2001-02. Of this, around £2.6 billion is being financed through increases in other taxes (including green taxes, capital gains tax, business rates on empty properties and anti-avoidance measures) and around £2.9 billion by increased borrowing. The May 13 'mini-Budget' was a bigger giveaway - if maintained - than in any Budget or Pre-Budget Report since 2001, when the outlook for the public finances appeared much stronger.

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