The Observer view on Rishi Sunak’s cost of living package

theguardian.com:

Economists and poverty campaigners have for months been warning that low-income families and disabled people would be left in increasingly dire financial straits as a result of inflation hitting its highest level in 40 years. But for months, a government mired in scandal has chosen to ignore their plight, implementing cuts to universal credit and drawing up packages of financial support that mostly go to better-off households. Labour’s calls for a windfall tax on energy companies to fund more financial relief went unheeded.

At last, the chancellor has given in and corrected course. Last week, Rishi Sunak announced an additional £15bn of one-off financial support for households, funded in part by a £5bn windfall tax on energy companies. It has come much too late, causing unnecessary hardship and stress for low-income families, but it is a more generous package than anything that has preceded it and is better, albeit imperfectly, targeted at people who are most in need of support.

All energy bill payers will now receive a grant of £400 rather than the £200 repayable credit that was originally announced by the chancellor. In addition, there will be a one-off £650 payment for all of the 8 million households who are on means-tested benefits, with an additional £150 and £300 available for disabled individuals and pensioners.

Analysis from the Resolution Foundation has highlighted that six out of 10 pounds of the chancellor’s previous two packages of cost of living support went to households in the top half of the income distribution. This new set of measures helps to redress this: two-thirds of the £15bn goes to households in the bottom half of the distribution. Given the unbearable choices some parents on low incomes now face –