Rishi Sunak was on Wednesday urged to step in to help millions of people on middle as well as low incomes cope with the spiralling cost-of-living crisis.
Bosses called on the Chancellor to intervene “at pace” and not adopt a “wait and see” strategy. His Cabinet colleague Michael Gove ruled out an emergency budget on Wednesday morning.
But business leaders in London piled pressure on the Government to act speedily after the Queen’s Speech.
Richard Burge, chief executive of the London Chamber of Commerce and Industry, told the Standard: “We were disappointed not to see more announced to address the rising cost of living and the rising costs for businesses, the pressures of which are undoubtedly felt most acutely in London, as commercial and residential rental prices skyrocket and energy costs soar.
“While the Government suggests it will not hesitate to support the burden of rising costs for households, the proposals are limited to lower income workers, meaning middle earners in the capital will shoulder the weight of inflation.”
Laura Osborne, of business group London First, added: “Consumer confidence is suffering, and many firms across the capital are worried that rising costs will derail recovery, just as they were starting to get back on their feet.
“The Government must step in sooner rather than later to help millions of people on lower and middle incomes hit by the rising cost of living, sending a clear signal that they will do more than wait and see.”
Mr Gove signalled that more financial support could be on the way for the least-well-off in society later this year as inflation soars towards double digits and energy bills have sky-rocketed.
But asked on LBC Radio whether the Government should call an emergency budget, lower VAT or review the rise in Corporation Tax, he said: “No, no, no,” echoing Margaret Thatcher.
He added: “I don’t think we need an emergency budget. I do think that we need to make sure that we have the right balance between paying down our deficit, keeping the confidence of international markets and keeping interest rates as low as possible, with also targeting help on the very poorest.”
Asked earlier on Sky News where the Government would put “shield” to protect people from the cost-of-living crisis, Levelling-Up Secretary Mr Gove suggested it would benefit the less-well-off in society but did not signal it would necessarily help millions of people on middle incomes. “We try to protect those who are most vulnerable,” he said.
“We have already taken steps for example by reducing Council Tax for people who are in particular Council Tax bands who tend to be at the lower end of the income spectrum.
“But we also keep under review a range of things that we can do both short term and long term to help people, so for example in the Queen’s Speech yesterday there are steps that we are taking to protect people who are renting, both those in the private rented sector and those who are also in social homes, in order to ensure that we can have security for them as well.”
However, Liberal Democrat leader Sir Ed Davey said: “The squeezed middle are drowning in tax hikes and spiralling energy bills. Rishi Sunak can’t just let them sink or swim.
“Now is the time for an emergency budget to slash taxes and save hard-pressed families on the brink.”
Tory MP Kevin Hollinrake, who sits on the Commons Treasury Committee, said much of the £22 billion of support announced already by the Chancellor had helped more than just people on the lowest incomes, adding: “The more widely you spread support, the thinner that support is.”
The Chancellor tweeted on Wednesday morning: “A growing economy is one of the best ways we can help with the cost of living, and support for SMEs is at the centre of this.”
National Insurance changes this year are far more likely to hit London workers than those elsewhere in the country because of higher average earnings in the capital — offset by much higher living costs. This year anyone earning £34,000 will be worse off, rising to £37,000 in the next financial year.
Mr Gove also told how a meeting of Cabinet ministers on Tuesday had discussed a range of issues to ease the crisis, including making MOTs compulsory once every two years rather than annually. He said Boris Johnson told his top team to make sure that they were all doing “everything that we could to review every policy lever at our disposal”.
However, Tony Danker, Director-General of the CBI, called for “more flexibility” from the Government rather than delay any new financial help until an autumn Budget.
