Good morning. Bills are mounting, wages are falling in real terms and inflation has hit a 40-year high. Under pressure from the opposition, his own MPs and the public – and in the middle of a terrible week for the government – Rishi Sunak has announced a significant financial package to help alleviate some of the pressure.
The measures have been met with a sigh of relief from just about everyone, but there are concerns that they still don’t go far enough – not to mention worries about the environmental impact of a tax break for companies if they invest in fossil fuel extraction.
To put the package in context, I spoke to Dr Miatta Fahnbulleh, CEO of the New Economics Foundation, about Sunak’s big plans and what they could achieve. You’ll get that right after the headlines.
Five big stories
Ukraine | Officials in Kyiv have admitted that Russia has the “upper hand” in fighting in the country’s east, as Ukrainian forces fell back from some of their positions in the Donbas region.
Conservatives | Four more Tory MPs called for Boris Johnson to resign on Thursday over lockdown parties. With 54 letters of no confidence required to trigger a vote on Johnson’s future, the publicly declared total is 19.
Texas shooting | Law enforcement agencies are facing more criticism over the Uvalde attack after it emerged that the gunman was locked in a classroom for an hour while police were massed outside.
Kevin Spacey | The actor is facing four charges of sexual assault against three men in the UK, the Crown Prosecution Service said. The development follows a review of evidence gathered during a previous investigation.
Television | CBBC, BBC Four and Radio 4 Extra will shut down and become online-only services, the BBC said. The move is part of plans to close television and radio channels in order to focus on streaming services.
In depth: What Sunak has announced, and how it will work
By autumn, the average household could face an annual energy bill of £2,800 – up from £1,971 in April. The Office for National Statistics has estimated that 39% of adults are cutting back on their food shopping because of rising costs. It’s a situation that shows no sign of abating. So, will Rishi Sunak’s measures be enough to offset the impact of the cost of living crisis?
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Lump sum payments
Arguably the most significant announcements were two targeted lump sum payments, worth up to £650 in total and available to eight million of the poorest households who receive means-tested benefits, starting from July. Sunak also changed his policy on the £200 repayable loan going to every household that was designed to ease the pressure of rising bills. Instead, the amount will be doubled to £400 and turned into a non-repayable grant. There will also be direct support for pensioners and disabled people, who will receive £300 and £150 respectively, potentially on top of the original £650. The package, Sunak says, will cost approximately £15bn.
“It’s definitely more than I thought it would be,” says Fahnbulleh, who stresses that this is an improvement from where we were before. However, she also argues that in the context of a £1,500 increase in energy bills, “it won’t really touch the sides”.
“The £650 one-off payment won’t do that much to help these families on the brink,” she says. “Not only because of the scale of the price rises we’re seeing but [because] social security has been hacked up.” Fahnbulleh says the reason why the cost of living crisis feels so painful to the poorest people is because the government has shredded their safety net. While this bump is welcome, she explains, “these families are nowhere near meeting the cost of living anyway, let alone with these extraordinary hikes”. Sunak has done enough to mitigate the crisis from being “completely catastrophic straightaway”, she argues, “but it’s not enough to help people over the course of the next 18 months”.
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Windfall tax
Whatever it may claim, the government has made a U-turn on a windfall tax – or what it prefers to call a “temporary targeted energy profits levy”. Sunak confirmed that there will be a one-off tax on the “extraordinary” profits of oil and gas companies, saying that the levy will raise £5bn over the course of the next year, which will help families with the crisis while avoiding “having to increase the debt burden further”. If you want to read more about the ins and outs of the levy, Nils Pratley, the Guardian’s financial editor, breaks down how this windfall tax has been designed and the way it would work.
But Fahnbulleh says that Sunak has diluted the potential of the levy because of the boosted tax deduction for investment in UK based fossil fuel extraction – which means for every £1 spent, they save 91p in tax. Her worry is that because many of these companies have already said that they have plans in this region, it will be impossible for the government to differentiate between pre-planned investments, and any new spending.
“I’m worried that we’re about to give them a tax reduction for investment that they would have made anyway, that was already baked into their previous profit profiles and investment pipelines,” she explains, “and, essentially, we whittle away the windfall tax because the government didn’t want to do it anyway for ideological reasons.”
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Will this alleviate pressure for the poorest households?
A report was published earlier this week by the Resolution Foundation thinktank which presented damning findings: the disparity between the inflation rates experienced by the richest tenth of households and the poorest tenth in the UK is at a 16-year high. Sunak’s spring statement was widely criticised for not targeting the groups who needed help the most, so the move to specifically target eight million people on means-tested benefits is a big move from the government, Fahnbulleh says. But, ultimately, “this is still a one-off payment. It doesn’t deal with the fact a person on universal credit is now on £79 a week, which is just not enough to live on”.
Sunak resisted any permanent uplift to benefits. Fahnbulleh points to the fact food bank numbers have been spiralling for years, with some parents still forced to choose between heating their homes and feeding their children come winter.
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What’s next?
It’s hard to ignore the timing of the announcement – for the past week Partygate has been dominating headlines. “I think we would still be waiting, but for the fact they wanted to knock the Sue Gray report off the headlines tomorrow,” Fahnbulleh says. And that, to her, is at the centre of the problem. “I don’t think they fully understand the scale of the challenge that has been faced by families and how horrendous this is. If the government did they would have acted in the spring. And they would have acted big.”
The guiding framework that the chancellor laid out in yesterday’s announcement was that the measures have to be “timely, targeted” and, most importantly, “temporary” – because the cost of living crisis itself, in the mind of the government, is temporary.
There is no doubt that these measures were necessary and that they will help people. They’re also more than most people expected. But, ultimately, it could turn out that the government has merely put a few plasters on deep wounds.
What else we’ve been reading
The murder of sisters Bibaa Henry and Nicole Smallman was horrific, but the story that followed – of police officers sharing graphic images of their bodies –disgusted the nation. Their mother, Mina Smallman, talks to Simon Hattenstone in this interview about that trauma, but also her memories of the two beautiful daughters she has lost. Toby Moses, head of newsletters
Alfie Packham spoke to people who decided to save the bees (and themselves from another chore) by not mowing their lawn this past month. Their gardens now are brimming with life, filled with new insects and plants. Nimo
Peter Bradshaw’s appreciation of the work of Ray Liotta, who has died at the age of 67, notes many sterling performances - but above all a “staggering” turn in Goodfellas. For that performance alone, says Bradshaw, “he’s a Hall of Famer”. Toby
The need to quantify and measure is an innately human thing - and it says more about us than most of us would initially assume. In this really interesting long read James Vincent examines why we need to turn everything into a statistic. Nimo
Basketball coach Steve Kerr’s press conference following the deaths of 19 children and two teachers in Texas captured the mood of so many who were horrified that this could happen yet again. Etan Thomas has profiled the man dubbed the “moral compass” of the Golden State Warriors. Toby
Sport
Tennis | Wimbledon’s roll of honour will change at the Championships next month, with “Mrs” and “Miss” removed from the names of its female champions in line with the tournament’s presentation of its male winners.
Football | Ahead of Luis Diaz’s likely role in Liverpool’s Champions League final on Saturday, Iñigo Alexander visits his home town of Barrancas in Colombia to learn about his formative years.
Rugby | England’s Maro Itoje has revealed that he will no longer sing Swing Low, Sweet Chariot because of the song’s origins in American slavery. The second-row forward said he had been “naive” to sing the anthem before.
The front pages
Most of the papers lead with Rishi Sunak’s windfall tax U-turn. “Sunak unveils £15bn package of support after windfall tax U-turn”, says the Guardian, while the Mail reckons it’s worth even more: “Rishi’s £21bn splurge” . The Express has “Rishi’s £1,200 boost for 8m”, the Mirror’s headline is “About time, Rishi”, and the i goes with “Every home to get £400 cut in energy bills”. The Metro leads with “Rishi to the rescue at last”, the Yorkshire Post has “£15bn plan to tackle cost of living crisis” and in Scotland the Herald has “Millions get £400 off their energy bills to help with cost-of-living crisis”.
The FT reports on possible backlash in the City, saying “Sunak’s £5bn windfall tax U-turn sparks anger from energy groups”. The pushback is also captured by the Times which says “Tories split on tax and spending bonanza” and the Telegraph has “Tories are now the party of big spending, says Sunak”.
Something for the weekend
Our critics’ roundup of the best things to watch, read and listen to right now
TV
Big Boys (All 4)
Jack Rooke’s comedy – based on his autobiographical stage shows – centres on Jack (Dylan Llewellyn), a teenager dealing with the devastating loss of his father and leaving home. The growing friendship between Jack and lairy lads’ lad Danny (Jon Pointing) is uplifting, and although it is less frenetic, its heart and wit evoke the mighty Sex Education. – Lucy Mangan
Music
Koechlin: The Seven Stars Symphony; Vers la Voûte Etoilée
The Seven Stars Symphony is composed for huge forces, and the score is a dazzling display of Charles Koechlin’s orchestral imagination. The Basel Symphony Orchestra’s performance under Ariane Matiakh has a wonderful lithe elegance; they pair the symphony with the nocturne Vers la voûte étoilée, another gorgeous piece by this ridiculously neglected composer.
– Andrew Clements
Film
Anek
Anubhav Sinha’s new action thriller asks the difficult question of what it means to be Indian, a loaded riddle in a period where Hindutva rhetoric has fostered brutal discrimination. It might be didactic in tone, but it is the kind of didacticism that injects political integrity into the cinematic landscape.
– Phuong Le
Podcast
The Spying Game
How close to real life are spy movies? Rory Bremner finds out as he introduces former agents to the stars who portray them on-screen. The Night Manager star Alistair Petrie meets the CIA’s brilliantly titled chief of disguise, while author Ben Macintyre meets an ex-British intelligence officer in highly informative chats. – Alexi Duggins
Today in Focus
The rightwing coalition that has run Australia for most of the past decade has been ejected from power by voters sick of its inaction on the climate crisis, says Guardian Australia editor Lenore Taylor.
Cartoon of the day | Steve Bell
The Upside
A bit of good news to remind you that the world’s not all bad
A Chilean tree known as the gran abuelo (great-grandfather) could be the world’s oldest, according to a new study. The giant Patagonian cypress – which has a four-metre-thick trunk – is believed to be up to 5,484 years old, 600 years older than the current California record-holder.
The estimate is based on research carried out by Paris-based Chilean scientist Dr Jonathan Barichivich, who visited the tree as a child, and has described it as being like “a family member” whose future he wants to protect. Chile’s environment minister Maisa Rojas described the news as a “marvellous scientific discovery”.
Sign up here for a weekly roundup of The Upside, sent to you every Sunday
Bored at work?
And finally, the Guardian’s crosswords to keep you entertained throughout the day – with plenty more on the Guardian’s Puzzles app for iOS and Android. Until Monday.
