Raise benefits and pensions to help lower earners, thinktank tells Rishi Sunak

theguardian.com:

Rishi Sunak should consider raising benefits and pensions to keep pace with inflation, research has suggested, as the chancellor faced increasing pressure to tackle the cost-of-living squeeze in this week’s spring budgetary statement.

Increasing benefits by an extra five percentage points, by 8.1% rather than the 3.1% currently planned, would give four times as much help for low-to-middle income households for every pound spent as scrapping the planned national insurance rise, the Resolution Foundation said.

The report by the living standards thinktank came as Sunak made final preparations for Wednesday’s statement, which is expected to include at least some extra measures to deal with a combined shock from energy price rises and inflation, one which Treasury officials say is unprecedented since the 1970s.

One possible measure could be a cut to fuel duty, with Sunak using an interview round on Sunday to stress that he understood the pressure of rising petrol and diesel costs on people who are reliant on cars.

It remains unclear what, if anything, he might do in terms of extra help for domestic energy bills, which are expected to soar in April and most likely again in October. Sunak refused to say how many people could be pushed into fuel poverty, arguing only that people should not be scared.

A number of Conservative MPs have called on Sunak to help people by scrapping the imminent 1.25 percentage point rise in national insurance contributions for employees and employers, saying this would help those in need. Labour also opposes the rise.

But the study by the Resolution Foundation calculated that doing this would see half the gains go to the richest fifth of households, with just £1 in every £6 helping low-to-middle income