Sunak under pressure to react to cost of living crisis in spring statement
Rishi Sunak is facing intense pressure from Conservative colleagues to take action in this month’s spring statement to alleviate the cost of living crisis, which has been dramatically exacerbated by the Russian invasion of Ukraine.
Asked about the impact of sanctions on Russia for consumers at home, the business secretary, Kwasi Kwarteng, told MPs on Wednesday he believed the public was “willing to endure hardships” in solidarity with the people of Ukraine.
But many Conservative MPs are privately and publicly urging the chancellor to do more to soften the blow, and one source suggested Treasury officials were already drawing up possible policy options.
Sunak’s February package of a £200 energy bill cut, to be paid back over five years, and a £150 council tax rebate had been criticised already as too meagre to cushion the blow significantly for many households.
New analysis by the Institute for Fiscal Studies (IFS) suggests the impact of the war on energy prices means those measures may now protect consumers from just a fifth of the coming increase. “Living standards will suffer across the board,” they warn.
The IFS calculates that providing the same level of protection as Sunak had planned would now cost an additional £12bn. Its director, Paul Johnson, said the chancellor must make a “huge judgment call”.
“Will he do more to protect households from the effects of energy prices which have risen even further in the last two weeks? If he doesn’t then many on moderate incomes will face the biggest hit to their living standards since at least the financial crisis. If he does, then there will be another big hit to the public finances,” he said.
Treasury sources rejected the idea of ditching the national insurance increase due to come
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