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Boris Johnson has warned the government must ‘do more’ to tackle the cost of living crisis as Rishi Sunak hinted at another cost-of-living bailout before October – and denied he is too rich to understand the pain being endured by families.

The PM delivered a message about the importance of ‘fixing’ the problems as the Chancellor suggested the support package will be ‘adjusted’ if energy bills soar again in the Autumn.

In a round of interviews this morning after his mini-Budget, Mr Sunak said he was waiting to see if ‘volatile’ energy costs continue to rise. He struck a similar tone as he was confronted during a phone-in by a single mother-of-two who said she was having to keep the boiler and lights switched off to save money. 

Mr Sunak – reputed to be one of the wealthiest MPs with a billionaire father-in-law – also insisted he is ‘in touch’ with normal people as he faced criticism for not going far enough in the Spring Statement. 

He was told on Sky News there was a suspicion he had only given limited help to the poorest because ‘you’ve never had to worry about making a fiver launch to the end of the week’. 

But the Chancellor pointed to his Covid response, including introducing the massive furlough scheme. 

‘What I would say is judge me by my actions,’ he said. ‘People can see how I have acted over the past couple of years.’ 

He added that the Spring Statement showed he is ‘on the side of hard-working families’. ‘We can’t solve every problem. I wish I could.’ 

In a round of interviews this morning after his mini-Budget, Rishi Sunak - reputed to be one of the wealthiest MPs with a billionaire father-in-law - insisted he is 'in touch' with normal people

In a round of interviews this morning after his mini-Budget, Rishi Sunak - reputed to be one of the wealthiest MPs with a billionaire father-in-law - insisted he is 'in touch' with normal people

In a round of interviews this morning after his mini-Budget, Rishi Sunak – reputed to be one of the wealthiest MPs with a billionaire father-in-law – insisted he is ‘in touch’ with normal people

The Spring Statement documents show that Mr Sunak has not spent all the windfall from higher growth after Covid

The Spring Statement documents show that Mr Sunak has not spent all the windfall from higher growth after Covid

The Spring Statement documents show that Mr Sunak has not spent all the windfall from higher growth after Covid 

Rishi Sunak’s spring statement at a glance: 

  • Fuel duty cut by 5p per litre for a year from 6pm tonight
  • VAT on household green energy equipment like solar panels and heat pumps is scrapped
  • Household Support Fund, a grant for councils to give to most vulnerable households, doubled to £1billion 
  • National Insurance threshold – the salary at which it starts to be paid – increased by £3,000 to £12,570 
  • Sunak says it is £6billion tax cut for 30 million people 
  • Pledge to bring in ‘fully costed’ cut to income tax from 20p to 19p before the next election in 2024. 
  • Office for Budget Responsibility (OBR) has lowered growth forecast to 3.8 per cent this year, falling to 1.8 per cent in 2023 and then 2.1 per cent, 1.8 per cent and 1.7 per cent in 2024-6
  • Inflation expected to average 7.4 per cent this year. 
  • Sunak: ‘People should know we will stand by them as we have in the past two years’
  • Debt interest payments hit £83billion this year due to inflation 
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Asked if the Government would take more action if necessary, Mr Sunak told BBC Radio 4’s Today programme: ‘Yes, of course we’ll have to see where we are by the autumn and it’s right for people to recognise that they are protected between now and the autumn because of the price cap.’

Pressed on whether that meant he will intervene before October, Mr Sunak said: ‘I always keep everything under review, and the Government, as it’s shown over the past two years, is always responsive to what’s happening.

‘But I would say with energy prices, you know, they are very volatile, and I don’t think you, I or anyone else has any certainty about what will happen in October right now.’

Meanwhile, speaking to LBC as he departed for a NATO summit in Brussels, Mr Johnson appeared to turn up the pressure on Mr Sunak.  

‘I think the Chancellor has done a huge amount to try to address the increases in the cost of living, everybody can see that that is the number-one challenge,’ he said.

‘So that’s why he’s put so much into helping people reduce the cost of their energy bills, and what he’s also done is help to cut taxes for working people, by I think the biggest-single amount for the last 25 years.’

Mr Johnson highlighted the decision to raise the national insurance threshold but added ‘as we go forward, we need to do more’.

The Prime Minister said his forthcoming energy strategy would help ‘bring down the costs for consumers over the long term’.

Unveiling his fiscal package yesterday, the Chancellor cut fuel duty by 5p until March next year to help Britons cope with soaring prices.

In a bigger-than-anticipated move, he declared that the threshold for paying NICs will soar to £12,570 from July, bringing it into line with the personal allowance for tax. He said that was equivalent to a £6billion tax cut for 30million workers – half the value of the new social care levy that Labour, many Tories and businesses had been demanding he scrapped before it take effect next month. 

Rishi says family has ‘whole range’ of breads… but it’s getting pricier 

Rishi Sunak has revealed that his family has a ‘whole range’ of bread – as he lamented it is getting pricier. 

The Chancellor – reputedly one of the richest MPs – suggested he his wife and their two children all have different taste in loaves.

Asked during interviews this morning what food he had noticed getting more expensive, Mr Sunak pointed to his favoured ‘Hovis kind of seeded thing’ had gone up around 20p.    

‘It’s probably, I think bread, probably is the thing,’ he told the BBC.

‘The one we buy I’m sure is now about £1.20 and it was about £1, from memory.’

He added: ‘We all have different breads in my house, a degree of healthiness between my wife, myself and my kids.’ 

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And he pledged that the basic rate of tax will fall by a penny to 19p by 2024 – the first cut in 16 years and worth more than £5billion or an average of £170 a worker. 

Mr Sunak also said he will scrap VAT on energy efficiency measures such as solar panels, heat pumps and insulation installed for five years. The Household Support Fund for struggling families is being doubled to £1billion. 

However, despite the Chancellor trumpeting his tax-cutting credentials, the Office for Budget Responsibility said that the Spring Statement only unwound a sixth of the tax rises imposed since February 2020. The tax burden is on course to be the highest since Clement Attlee was PM after the Second World War.

The decision to go ahead with freezing tax thresholds despite skyrocketing inflation means that over the next three years 2.8million people will be dragged into paying tax, and two million into the higher rate. 

Last March the watchdog had predicted 1.3million and a million more respectively due to the policy. The numbers in the higher rate are due to increase by an astonishing 42 per cent.

Huge amounts of revenue are being generated by making the arrangements for repaying student loans less generous – a policy that was slipped out on the same day Russia invaded Ukraine. 

The measures since October are set to trim a third off the fall in living standards the country faces this year.

However, the OBR still expects real household disposable incomes to tumble by 2.2 per cent per person in 2022-23 – the largest annual fall since ONS records began in 1956. 

This chart shows how Britons will be paying more tax by 2024-25 despite the limited cuts brought in by Mr Sunak yesterday

This chart shows how Britons will be paying more tax by 2024-25 despite the limited cuts brought in by Mr Sunak yesterday

This chart shows how Britons will be paying more tax by 2024-25 despite the limited cuts brought in by Mr Sunak yesterday 

Speaking to LBC as he departed for a NATO summit in Brussels, Boris Johnson (pictured in the Belgian capital) appeared to turn up the pressure on Mr Sunak

Speaking to LBC as he departed for a NATO summit in Brussels, Boris Johnson (pictured in the Belgian capital) appeared to turn up the pressure on Mr Sunak

Speaking to LBC as he departed for a NATO summit in Brussels, Boris Johnson (pictured in the Belgian capital) appeared to turn up the pressure on Mr Sunak

The standoff with Russia is having an impact on the UK’s recovery, with growth now only expected to be 3.8 per cent this year rather than 6 per cent and inflation to average 7.4 per cent. 

During a phone-in on LBC last night, Mr Sunak was challenged by ‘Hzul in Crawley’ about her plight.

‘I am a single parent to two children who on paper has a good job and what’s considered a good salary. But unfortunately, the rising cost of everything, especially energy has now put an intense strain on my ability to provide for my children,’ she said. 

‘A significant increase in our energy bill has meant that we don’t have the boiler on. The lights are always off unless absolutely necessary and when it’s cold, we wear jumpers and coats and sometimes you can see our breaths when we breathe. 

‘Now, despite working a full time job, I’m having to find ways to bridge the gap. I’ve started cleaning houses and I spend every evening riding bike delivering for UberEATS. 

‘I’ve managed to cut my grocery shop down to just £15 a week for an adult and two children and I often go without myself to make sure the kids get what they need and they’re fed. 

‘A £150 grant towards energy bills which have risen by an average of £2,000 a year just isn’t going to cut it. I’ve just about been able to balance things up until this point but I’m now facing paying out more each month that I’m making. 

‘What are you going to do to address the soaring costs of energy and if you’re not doing anything, please tell me what else you suggest I can be doing to help myself?’

Mr Sunak voiced ‘admiration’ for Hzul and said he could not ‘imagine how difficult your job is’. 

‘It sounds like you’re working your socks off to look after them, so tribute to you,’ he said. 

He stressed that there was support already announced – but hinted that he is ready to go further. 

‘What we announced last month was £350 worth of support to help people meet the those bills so £150 I think as you pointed out, you will get as a rebate for your council tax bill in April so many people will be seeing that now and I hope is come through on the leaflet at home and then in October and other £200 off as well,’ he said. 

‘So I think you know that hopefully will make a difference. We’ll have to see what the October price cap is. We don’t know yet and it would be wrong to speculate but obviously we’ll you know, we’ll see what happens then and adjust as necessary.’ 

Chief Secretary to the Treasury Simon Clarke denied last night that the country is heading for ‘austerity 2.0’.

Rishi faces Tory backlash for not going further on tax cuts 

There are signs of a continuing Tory backlash against Mr Sunak despite his claims to have slashed taxes. 

Conservative MP Richard Drax urged the Treasury to ‘go further’, as ‘lower taxes generate more cash’.

The MP for South Dorset told the Commons: ‘I applaud the Chancellor for going as far as he went, and that’s what I said in my statement yesterday. But many of my constituents in South Dorset are impoverished already.

‘We have deep pockets of deprivation and poverty, and I fear that despite the generous moves by the Chancellor and the tinkering that he has done haven’t gone far enough.’

Mr Drax added: ‘I just want to say to the Treasury bench, with the cost of living spiralling and taxes at the highest for 70 years, can I urge them to go further? As they know full well, lower taxes generate more cash.

‘It is a proven point. And something that Conservatives on this side of the house have fervently followed for as long as I can recall.’

He said: ‘Low taxes are a force for good both for the individual who is far better placed to decide where to spend their money, and for the private sector, which can better invest in their businesses, employ more staff and sustain a profit… and let’s not forget it is the tax from these profits, which pay for the public sector.’

‘I welcome the Chancellor’s talk of more tax cuts to come, but in my humble opinion, and certainly for my constituents for the reasons I’ve stated, they will come too late,’ he said.

Mr Drax also suggested he wants to see reductions in some areas of public expenditure, such as the NHS.

He said: ‘In the Chancellor’s statement yesterday what I didn’t hear was the good Conservative word savings. The opposition call it cuts, I call it savings. We appear to acquiesce to every demand for more money. This is taxpayers’ money and surely now it is time to review, for example, the big spenders, like the NHS and welfare.

‘Of course they are both needed, but surely it is time to review both to make sure that we are getting value for money.’

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However, he warned public sector workers could not expect pay rises to keep up with rising inflation, which the OBR is predicting will hit a 40-year high before the end of the year.

‘We are not freezing public sector pay,’ Mr Clarke told ITV’s Peston programme.

‘There will be pay increases, but we are not in position where we can start paying out eight, 10, 12%. It would be wildly unrealistic to expect us to do that.’

Mr Clarke also gave a clear signal ministers intend to issue more licences for North Sea oil and gas production as Europe seeks to move away from reliance on supplies from Russia.

‘We are determined to unlock more production in the North Sea,’ he told BBC2’s Newsnight.

There are signs of a continuing Tory backlash against Mr Sunak despite his claims to have slashed taxes.

Conservative MP Richard Drax urged the Treasury to ‘go further’, as ‘lower taxes generate more cash’.

The MP for South Dorset told the Commons: ‘I applaud the Chancellor for going as far as he went, and that’s what I said in my statement yesterday. But many of my constituents in South Dorset are impoverished already.

‘We have deep pockets of deprivation and poverty, and I fear that despite the generous moves by the Chancellor and the tinkering that he has done haven’t gone far enough.’

Mr Drax added: ‘I just want to say to the Treasury bench, with the cost of living spiralling and taxes at the highest for 70 years, can I urge them to go further? As they know full well, lower taxes generate more cash.

‘It is a proven point. And something that Conservatives on this side of the house have fervently followed for as long as I can recall.’

He said: ‘Low taxes are a force for good both for the individual who is far better placed to decide where to spend their money, and for the private sector, which can better invest in their businesses, employ more staff and sustain a profit… and let’s not forget it is the tax from these profits, which pay for the public sector.’

‘I welcome the Chancellor’s talk of more tax cuts to come, but in my humble opinion, and certainly for my constituents for the reasons I’ve stated, they will come too late,’ he said.

Mr Drax also suggested he wants to see reductions in some areas of public expenditure, such as the NHS.

He said: ‘In the Chancellor’s statement yesterday what I didn’t hear was the good Conservative word savings. The opposition call it cuts, I call it savings. We appear to acquiesce to every demand for more money. This is taxpayers’ money and surely now it is time to review, for example, the big spenders, like the NHS and welfare.

‘Of course they are both needed, but surely it is time to review both to make sure that we are getting value for money.’

In his Commons speech yesterday, Mr Sunak said cutting taxes is ‘not easy’. ‘It requires hard work, prioritisation and the willingness to make difficult and often unpopular arguments elsewhere,’ he said.

‘It is only because this government has been prepared to make those difficult but necessary choices to fix our public finances that I can stand here and tell this House that not only are taxes being cut, but that debt is also falling whilst public spending is increasing.

‘We can deliver for the British people today and into the future.’

Mr Sunak fended off renewed calls to spike the £12billion National Insurance hike in the mini-Budget, despite the better-than-anticipated performance of UK plc leaving him with up to £50billion to play with. 

Paul Johnson, director of the respected Institute for Fiscal Studies (IFS), said the £3,000 increase to the national insurance threshold would ‘more than compensate about 70 per cent of workers’.

But he highlighted that overall almost everyone would be paying more tax at the end of the Parliament, while inflation had eroded funding for public services.    

He said the 5p off fuel was ‘not huge’ given pump prices were up 20p per litre or even more.

The package was announced after the pain for families was underlined with inflation hitting a new 30-year high of 6.2 per cent.

The figure for February is more than three times the Bank of England‘s target, and a peak not seen since March 1992. There are fears it will go even higher, possibly to double digits – but the Office for Budget Responsibility watchdog said today that it expected a peak of 8.7 per cent in the fourth quarter. 

Source: Daily Mail

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