Chancellor says he will ‘act if necessary’, as MPs warn of ‘vicious’ rise in cost of living
Mr Sunak is coming under pressure to step up assistance as bills for gas and electricity soar by an average £700 next week, after last week’s spring statement was blasted for failing to do enough for the poorest.
But he today told MPs that it would not be “appropriate” to take further action until it was clear how far the energy price cap will rise in the autumn, and said that even then he would only act “if necessary”.
Appearing before the House of Commons Treasury Committee to answer questions on last week’s mini-budget, the chancellor was accused by Labour’s Angela Eagle of “making a political choice to plunge 1.3m people – including half a million children – into absolute poverty” by failing to upgrade welfare benefits in line with fast-rising inflation.
But he insisted that the tax and benefit changes he has imposed as chancellor have been “progressive”, and said that any spare cash available to him in future will go on tax cuts not additional spending.
Last week’s decision to raise the threshold at which National Insurance becomes payable – on top of an earlier £9bn package targeted directly at energy prices – will help families facing price rises forecast to peak at almost 9 per cent this year, 他坚持.
Mr Sunak agreed with committee chair Mel Stride that his announcement of a 1p cut in income tax for 2024 was effectively a “stake in the ground which you are going to defend at all costs” to prevent cabinet colleagues, including prime minister Boris Johnson, from splashing out more cash on public spending.
Pressed over what he can do to help families facing a “vicious” increase in the 生活成本 over the summer, Mr Sunak replied: “As we said very clearly in the spring statement document, we will continue to monitor the situation and as we know more are prepared to act if necessary.
“Clearly it’s very difficult to sit here today and speculate on what happens to energy prices, therefore the biggest impact on living standards in the autumn. Let’s wait until we get there and then can decide on the most appropriate course of action, but I don’t think anyone today knows what that appropriate course of action ought to be.”
Mr Sunak said that estimates from the Office for Budget Responsibility of a further 40 per cent rise in domestic energy prices at the next review of the energy price cap in the autumn were already outdated, with current figures suggesting that the actual rise could be 10 percentage points lower than that.
Dame Angela told him: “You’ve made a political choice to plunge 1.3m people – including half a million children – into absolute poverty.
“People on fixed rates of income are going to suffer very, very badly in the next period, whatever happens in October. A single person caring for their parent whose main source of income is their carers allowance of £67 a week is not going to be able to accommodate a huge trebled or quadrupled energy bill.”
Mr Sunak said he had opted to spend £6bn on increasing National Insurance thresholds to benefit 30m workers, rather than spending the money on upgrading benefits to keep pace with inflation.
“Someone else sitting here could have said `I’d rather spend that £6bn on the welfare system’,“ 他说. “That’s absolutely a choice that someone else could have made…. I think the mix of policies we’ve got is the right mix.”