The chancellor promises to “respond to the situation on the ground” as households face soaring bills.
Image source, Reuters
Rishi Sunak has hinted that he could provide more help for households struggling with soaring living costs, promising: “We will get through this.”
The chancellor has announced a £400 discount on all energy bills, with extra assistance for poor households, pensioners and disabled people.
He told BBC Radio 4’s Today programme he continued to be “prepared to respond to the situation on the ground”.
But Labour said cost-of-living help had to me more targeted towards the poor.
Inflation – the rate at which the cost of goods and services is rising – is currently at 9%, pushed higher by rapidly increasing food and energy prices.
It is expected to hit double digits later this year.
Having been pressured by Labour and the Liberal Democrats for several weeks to provide extra help with bills, the government announced a £15bn package on Thursday.
Part-funded by a 25% windfall tax on gas and oil company profits, all households would get £400 off energy bills this October, and there will be further help for those most in need.
Mr Sunak called the measures “temporary”, but the Institute for Fiscal Studies think tank says calls for help are likely to continue for at least another year, with bills expected to keep rising into 2023.
Asked on Today if he planned another emergency package next year, even it it meant more government borrowing and higher taxes, the chancellor said: “People can judge me by how I’ve acted over the last couple of years.
“I’ve always been prepared to respond to the situation on the ground, what’s happening to the economy, what families are experiencing and making sure we’ve got policies in place to support them through that.”
“In terms of ‘is it one-off?’, what’s happening next year, I’d go back to what I said earlier,” Mr Sunak said. “I do want people to be reassured and confident that we will get through this.
“We will be able to combat and reduce inflation. We have the tools at our disposal and after time it will come down.”
‘Red meat to socialists’
Some Conservative MPs have criticised the use of a windfall tax to help fund assistance with bills.
Richard Drax accused the chancellor of “throwing red meat to socialists”, while Craig Mackinlay described the policy as “tripe”.
But the Mr Sunak insisted he remained a “fiscal conservative” and wanted to manage the UK’s finances “responsibly”.
Labour has welcomed the windfall tax, with shadow chancellor Rachel Reeves telling BBC Breakfast the government had “finally come to their senses”, but asking: “What took them so long?”
Ms Reeves said the measures should have been better targeted, as better-off households, who own more than one property, would be in line for a windfall of their own.
“If you’ve got a second home or a third or a fourth home, you’re likely to get this £400 payment multiple times. I don’t think that is a good use of taxpayers’ money.”
Ms Reeves also said a longer-term plan was needed to keep household energy costs down.
“If you insulate people’s homes you take £400 off their bill not just for one year but for years to come… importing less oil and gas… and it helps the planet,” she added.
But Mr Sunak said second homes accounted for only “one or two per cent of the property stock” across the UK.
He suggested that wealthy individuals donate the £400 they will save on bills to charity, adding that he had done so himself.
“I’m sure you will join me in giving that money to charity,” he said on ITV’s Good Morning Britain.
Earlier this week, UK energy regulator Ofgem said the typical household energy bill was set to rise by £800 in October, bringing it to £2,800 a year. Bills had already risen by £700 on average in April.