Tories’ triple tax cut boost: Ministers prepare plan to help three million of the lowest paid, relief on energy bills and announce pledge to ease burden on business and stave off recession
- Rishi Sunak is drawing up major package plans to help with energy bills in July
- Last night the Chancellor told business leaders he’ll cut their taxes in autumn
- An option may be with Universal Credit rules, to let workers keep more earnings
A triple tax cut to ease the cost of living crisis is being examined by ministers.
Rishi Sunak is already drawing up plans for a major package to help with energy bills in July, potentially by cutting council tax.
But last night the Chancellor told business leaders he would cut their taxes in the autumn to prompt the investment needed to head off a recession. And a government source also said Boris Johnson was considering an emergency tax cut for poorer families this summer.
One option under examination is a change to Universal Credit rules to let three million workers keep more of their earnings.
The moves came as official figures showed inflation jumped to 9 per cent in April, the highest level in 40 years.
Mr Sunak warned that he could not ‘protect people completely’ from the cost of living squeeze. ‘There is no measure any government could take, no law we could pass, that can make these global forces disappear overnight,’ he told CBI business leaders.
‘The next few months will be tough. But where we can act, we will.’
A triple tax cut to ease the cost of living crisis is being examined by ministers as Rishi Sunak already drawing up plans for a major package to help with energy bills in July. The Chancellor pictured speaking at the Confederation of British Industry’s annual dinner in London on Wednesday
Mr Johnson acknowledged that households were ‘struggling’ with inflation and pledged that ministers would ‘look at all the measures we need to take to get people through to the other side’.
Tory MPs yesterday lined up to call for immediate tax cuts and former Cabinet minister Jake Berry said it was ‘now or never’. He added: ‘It’s all very well to talk about budgetary measures in November but this cost of living crisis isn’t sticking to a neat parliamentary timetable – urgency is required.’
Mr Berry’s warning came as:
- Liz Truss led Cabinet calls for tax cuts, saying a ‘low-tax economy’ was the best way to boost growth;
- The British Chambers of Commerce warned of a ‘real chance’ of recession;
- Ministers prepared to cap interest charges on student loans amid fears rates could hit 12 per cent;
- Mr Johnson again refused to rule out a windfall tax on energy giants, as Labour accused him of sitting on the fence;
- Economists warned that low-income households, including many pensioners, already faced double-digit inflation;
- Average petrol prices hit an all-time record of almost £1.68 a litre.
Tory MPs yesterday lined up to call for immediate tax cuts and former Cabinet minister Jake Berry said it was ‘now or never’. He added: ‘It’s all very well to talk about budgetary measures in November but this cost of living crisis isn’t sticking to a neat parliamentary timetable – urgency is required.’ PM Boris Johnson pictured in the Commons on Wednesday
Treasury sources yesterday confirmed that the Chancellor was drawing up plans for a major package to help families cope with soaring energy bills this summer.
Ministers have been warned that the energy price cap could jump by anything from £500 to £1,000 when the regulator Ofgem makes its next assessment in August.
This could push average bills up from the current £1,971 to almost £2,500 or even £3,000 in the autumn when the new price cap takes effect.
Mr Sunak is expected to pre-empt the rise by unveiling a package of support before MPs break for the summer in July. Options being considered include: a repeat of the £200 ‘rebate’ pledged by the Chancellor in February; a further cut to council tax for people living in homes in bands A to D; an increase in the Winter Fuel Allowance received by pensioners; and a rise in the Warm Home Discount Scheme.
Sources said that ministers had not yet decided which of the options to pursue.
The Treasury has ruled out calls from Labour and some Conservative MPs for a full-blown ‘emergency budget’ this summer.
During clashes in the Commons, Labour leader Sir Keir Starmer said the Prime Minister ‘just doesn’t get it’.
He added: ‘He doesn’t actually understand what working families are going through in this country. They are struggling with how they are going to pay their bills.’
But a government source told the Daily Mail that Mr Johnson was considering announcing a single major tax cut this summer to provide immediate help.
The source added: ‘There is a view that it is just not tenable to leave everything until the autumn. Yes, there’s going to be more help on energy, but it’s probably more likely than not that we will also have to do something on tax this summer.’
But Tory MPs yesterday stepped up pressure on the Chancellor to move faster and further in easing the record tax burden and Scottish Secretary Alister Jack called for immediate action.
He said: ‘What more I’d like to see done is a further tax cut because that’s how you get money into people’s pockets.’
Tory backbencher Sir Bernard Jenkin said the Treasury was still adopting ‘peacetime thinking’ despite the fact the country was facing a crisis.