At the Spring Budget in March, Rishi Sunak spent roughly £9bn to help with the cost of living and received precious little credit for it. This is partly because at the same time, while inflation was hitting 7 per cent, the Chancellor chose to increase benefits by 3.1 per cent. He also opted to provide support through a convoluted matrix of loans and council tax rebates, seemingly to avoid using Universal Credit.
So today, Sunak returned to the House of Commons for mini-budget statement in which he announced details of a windfall tax temporary targeted energy profits levy that will part-fund a £15bn package of support, including turning £200 loans gifts that had to be paid back into £400 grants, as well as further targeted support for the poorest households. For more on how it’ll all work, Deputy Political Editor David Bond answers all your questions.
Let’s be clear: this is a major intervention by the Chancellor. Eight million low-income households in receipt of Universal Credit and other means-tested benefits are set to obtain a £650 payment. That is a substantial sum and is, critically, reasonably well-targeted.
And as Torsten Bell of the Resolution Foundation points out, today’s measures free the Government of the somewhat ludicrous position of cutting energy bills now by making future bills more expensive, a heck of a hostage to financial and political fortune given that it relied heavily on wholesale prices falling in the near future.
There remains, of course, a rather large gorilla somewhere in the back of the House of Commons chamber. Energy bills are expected to increase by another £800 in October when Ofgem lifts the cap. That is on top of April’s £693 rise. Therefore, despite the Chancellor’s largesse today, people are still getting hammered.
And there’s a broader problem. The other reason why the Chancellor reaped so little reward for his Spring Statement wasn’t just its relative paucity. It’s that this is a Government with no story to tell. It says it hates taxes but raises them anyway. It claims to despise intervening in markets but does so ”before breakfast, before lunch, before tea and before dinner” to go the full Heseltine.
George Osborne, formerly of this parish, was a master of the political dividing line. But what is Sunak and Johnson’s? What do they believe? Until they decide – and craft a convincing narrative around it – the Government will be left exposed to the damaging political and economic consequences of war, Covid and Brexit. And the Conservative Party will struggle to claim credit even when it does the right thing.
In the comment pages, Sarfraz Manzoor believes comedy isn’t cosy or comfortable — don’t try to cancel Ricky Gervais. He is also counting down the days until the Boss, Bruce Springsteen, embarks on his new world tour.
Meanwhile, here we go... Melanie McDonagh says sorry Meghan but charity starts at home, advising her to visit her sick father, Thomas.
And finally, shut up and take my money. A new umbrella renting app, Rentbrella, has placed its stations across London. It operates like bike rental services with a map on your phone pointing you to your closest parasol and doesn’t charge for the first 24 hours.
