Six measures Rishi Sunak could take to combat UK’s cost-of-living crisis
Rishi Sunak is under pressure from Tories and the opposition to make this week’s spring statement into an interventionist mini-budget to tackle the cost of living and impact of the Ukraine war. Here are the key issues:
Labour and Tory backbenchers are pressing for April’s planned rise in national insurance to be delayed or scrapped. Announced by Sunak and Boris Johnson last autumn to raise funds for the NHS and social care, it is expected to bring in £12bn. The pair used a joint letter to a Sunday newspaper to commit to the policy. This could make reopening the issue politically difficult. Calls to scrap it have multiplied given the UK’s worsening cost-of-living crisis and a stronger than expected performance for the economy and government finances in recent months.
Benefits usually increase in April by the previous September’s rate of inflation, which was 3.1%. Experts say that while the system works when inflation is stable, the recent growth in living costs calls for a bigger rise. The Bank of England says inflation could hit 8% this April.
Raising benefits by more than planned could constitute an embarrassing U-turn for the chancellor, who staked his reputation on a £20 a week cut in universal credit last October – despite warnings of mounting pressure on households.
Surging oil prices since the Russian invasion of Ukraine have sent the price of petrol to record highs. Tory backbenchers are pushing for a tax cut. Fuel duty is 57.95p a litre, plus 20% VAT. The Conservatives have frozen fuel duty for 12 years but campaigners say this clashes with net-zero ambitions.
Concerns over energy security have fuelled calls for more domestic production. Some Conservatives want fresh investment in shale gas, or net zero rules relaxed
Read more on theguardian.com
