Rishi Sunak faces mounting pressure to help families with rising living costs after pledging to cut corporate taxes, saying “where we can act, we will.”
The Chancellor last night told business leaders “the next few months will be tough” after inflation shot up to 9%.
And in recent days a spate of speculative stories have leaked out of the Treasury about how he might help Britain.
But CBI boss Tony Danker, who hosted last night’s City dinner, exploded: “What are we waiting for?” The business leader today demanded a “sense of urgency” from the Chancellor, telling the BBC: “I’m struggling to understand why we wait longer.”
Keir Starmer said the Prime Minister “chooses to let the people fight” while “vacillating” on how to act.
Money-saving expert Martin Lewis reiterated his warning that “civil unrest” could arise from big bills – and said his big hope was the “populist” Boris Johnson, who would reflect public sentiment.
The problem is that while Treasury Department officials insist all options are on the table, they haven’t yet decided what to do.
Mutinous Tory MPs want tax cuts but these risk missing out on the poorest in a billing emergency. Others are calling on the Treasury to bring forward benefit and pension increases to help the nation’s most vulnerable.
Meanwhile, there are complaints about an unexpected tax on oil and energy giants that have not been ruled out.
It’s all speculation and sources stress nothing is confirmed. But what are the ideas being rolled up at the flagpole? Here’s what you need to know.
Business tax cuts in the fall
It’s looking increasingly likely that there will be tax cuts for businesses in a household this fall.
On Wednesday night, the Treasury issued a statement from the Chancellor to businesses, which said: “In the fall budget we will cut your taxes to encourage you to do all these things.”
Curiously, the reference to an autumn budget was dropped from the closing speech – instead Mr Sunak said: “Our firm plan is to cut your taxes and reform to encourage you to do all these things.”
But insiders insist corporate tax cuts are still on the horizon. The Sun reported that they could get higher R&D allowances and tax breaks for investments.
Another £200 for energy bills – but only this summer
Families in council tax bands AD are due a £150 rebate to help pay energy bills, which were increased by £693 on April 1st.
There were reports that the Chancellor could repeat that ahead of another expected climb on October 1.
Alternatively, he could offer a £200 refundable rebate on energy bills, to be issued in October.
However, critics – including some Tory MPs – are skeptical about the rebate system because it has to be paid back.
Whatever helps with energy bills will likely be announced in late July or early August, when Ofgem could announce the next price cap hike for October.
Mr Johnson’s spokesman previously said: “August and later in the year is about the time when there may be more certainty” and “we may have more to say at that point”.
Warm Home discount quadrupled
The Warm Home Discount Scheme will be raised from £140 to £150 this winter and will be extended to 780,000 more homes, bringing the total to 2.7 million.
It mainly goes to people on low incomes or who receive a guarantee credit element of the pension loan.
It has now emerged that Business Minister Kwasi Kwarteng has put forward an idea to increase this to £500.
According to The Times, Treasury officials are looking at options for a one-off increase in the rebate this winter – £300, £500 or even £600.
But it goes without saying that the ideas have been floating around for some time without a clear plan. A Treasury Department source said the idea is under review.
Get on the winter fuel payment
People born before September 1955 are entitled to a winter fuel payment of between £100 and £300. According to The Times, the extension is an offer on the table – but further details are scant.
Bringing forward a 1p income tax cut
Rishi Sunak has already pledged to cut income tax by 1 pence in sterling terms from 20% to 19% from 2024.
Dubbed a cynical electoral ploy by its critics, it would save a £30,000 earner around £175 a year. Those making less than £12,570 a year see no benefit and with the threshold frozen gains could be wiped out by inflation.
But amid pressure from the Tories to cut the tax – after raising the burden to the highest in decades – there are claims Mr Sunak could bring forward the 1p cut.
And he ran rabbits on Tuesday. Asked by a Tory MP if his “absolute budgetary priority” was a tax cut, he agreed. Mr. Sunak added: “This is our priority… Our priority is to further reduce taxes on the working population, including by cutting personal income taxes, as soon as public finances allow.”
Sources insisted nothing has changed since the chancellor promised a tax cut in 2024, but the pressure is mounting.
Angry argument about a lucky tax
Tory ministers are still arguing over whether to impose a windfall tax on oil and energy giants.
Keir Starmer slammed the ‘Hokey-Cokey’ over the plan put forward by Labor claiming it could save households £600.
Internal government polls showed the levy was “very popular” with voters, but Boris Johnson launched a vehement defense of oil and gas companies on Wednesday.
While the prime minister didn’t rule out an unexpected tax, his staff told the Times he was opposed, with one saying it was an “ideologically unconservative course of action”.
Tax hawks’ hopeful leader Liz Truss also made it clear she was not in favour, saying: “In my view, lower taxes are the best way to attract more investment.”
That has put No10 on a collision course with Treasury Department officials who believe the levy is reportedly “politically unavoidable”. Sources denied No10 blocked a windfall tax.
Still no movement on Universal Credit changes
So far, the chancellor has ignored growing calls to bring forward the increase in benefits for the poorest next year.
He tried to blame technical problems with computer systems – a suggestion rejected by pundits and ex-DWP chief Iain Duncan Smith, who said “I don’t believe a word of it”.
The Mirror understands officials have been discussing changes to the benefits system to help people.
But a DWP insider slammed reports in the Daily Mail that Universal Credit rules are being tweaked to help workers keep more of their pay.
Workers’ pay and the reduction rate – which affect how quickly benefits end when you earn – were already made more generous ahead of Christmas. The source said further changes to these two items are very unlikely.
https://www.mirror.co.uk/news/politics/7-plans-rishi-sunak-your-27006043 7 plans Rishi Sunak might have for your wallet after trembling over the cost of living