Rishi Sunak has hinted that more support may be on the way to help Britons weather the cost of living crisis.
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Speaking to BBC Look East on a visit to Ipswich, the Chancellor said he had been “very clear” that the Government “was ready to do more” as millions grapple with mounting bills. Sunak said the government would be in a better position to formulate a response once it had “better clarity” on what energy prices will be like in the autumn.
“The forces we are grappling with are global in nature and we are not the only country facing higher energy prices or higher inflation in general,” he said. “You know, there are things we can do to support people and we will do whatever it takes to ease the burden. I wish I could make it go away completely, but I can’t.”
But while the chancellor has yet to spell out what further action the government might take, senior business leaders and politicians have already put forward some ideas of their own.
Reduce energy costs by millions
Scottish Power chief executive Keith Anderson has urged the government to cut the energy bills of 10 million households by £1,000 in October, the UK reported BBC.
Anderson has warned that the next spike in energy bills in October to around £2,500 and £3,000 a year could spell disaster for suppliers and customers alike, leaving energy companies to face huge losses while customers fail to pay their bills. He said the government’s plan to give households a £200 tax refund on their energy bills in October would not be enough to cover the rising costs.
Instead, he had proposed that a “£10 billion tariff-cutting fund. The energy chief said such a fund would “tackle the biggest cause of the cost-of-living crisis — rising energy costs — head on, along with other measures such as the reduction of the heating oil tax, would not do this.
Impose a windfall tax on energy companies
As energy giants report record profits, Labor has called for a one-off windfall tax to fund measures that would ease the UK’s cost of living crisis for families.
BP reported underlying earnings of $6.2bn (£4.9bn) for the first three months of the year. BBCduring Shell’s quarterly earnings were the highest ever, with the energy company earning $9.13bn (£7.3bn) between January and March.
Labor has proposed a 10% rise in corporate tax for oil and gas producers in the North Sea for the year in early April, which could raise up to £1.2bn to help households meet the cost of rising energy bills.
Boris Johnson has criticized the plan, saying it would discourage investment in the UK. But when BP CEO Bernard Looney was asked The times If a windfall tax meant the company canceled all investments, he said, “There isn’t one we wouldn’t do.”
Restore the Universal Credit Boost
Former Conservative leader Iain Duncan Smith has urged Johnson’s government to bolster universal credit to help lower-income people weather the cost-of-living crisis, the reported i news site.
He also urged the government to scrap National Insurance increases to help the government “reset” and “put money in people’s pockets” after the Conservative Party suffered huge losses in local elections last week had to.
“We now have one of the highest tax rates we’ve had in a generation – that can’t happen under Conservative oversight, so the tax rate needs to come down,” Duncan Smith told the newspaper. He added that “in the near term” the government “must use universal credit to help those on the lowest incomes afford some of those bills because many lower incomes aren’t being helped by tax cuts.”
He advised the government to either restore “the £20 (raise) or a further reduction in the taper rate, which is essentially a tax, or more money in the form of work allowances for those on the lowest incomes”.
Pressure was also exerted on Sunak by the government. Police Secretary Kit Malthouse said during a cabinet meeting in April that reducing the tax burden was the best way to help families struggling with the cost of living crisis.
“We are a party and a low-tax government,” Malthouse reportedly told the room, according to a cabinet colleague who spoke to him The Telegraph. “The quickest way to actually regenerate the economy and get retail activity and job creation back on track is to lower the tax burden, not increase it,” he said.
The newspaper reported that his view was “supported by the Hall” and was later supported by former cabinet ministers. But while the prime minister was reportedly “sympathetic” to the proposal, Sunak argued that further tax changes would have to wait until the autumn budget.
Business leaders have argued that Sunak shouldn’t wait until the fall to introduce new measures to lessen the impact of rising costs and should “set up an emergency budget” to help companies dealing with skyrocketing costs of “energy, raw materials and… more “struggling work,” reported the financial times (FT).
The call came from the head of a leading business lobby group, Shevaun Haviland, director general of the British Chamber of Commerce. She has reportedly written to the Government to “request a package of economic measures to bring down the cost of doing business in the UK as demand shows signs of slowing down,” the FT said.
Haviland urged Sunak not to wait until his next budget to step in, as “it’s easier to keep a store open than to get it to reopen once it’s closed,” she said.
The UK Chamber of Commerce has proposed that the government’s increase in social security be postponed to “reduce cost pressures on employers” and recommends that Sunak cut VAT on energy bills from 20% to 5%.
https://www.theweek.co.uk/news/politics/956687/cost-of-living-crisis-five-suggestions-for-rishi-sunak Cost of Living Crisis: Five Suggestions for Rishi Sunak