The Observer view on Rishi Sunak’s spring statement
Judge a political party by the choices it makes. Rishi Sunak may plead that no chancellor could protect everyone from a cost of living crisis driven by events outside his and the country’s control. But he protests too much. There were two realities as he composed the spring statement that he presented last week. First was the warning from the Office for Budget Responsibility (OBR) that British households faced the most severe drop in living standards for 66 years. Second was the unexpected good news that, far from being in a tight fiscal spot, there was a revenue bonanza that would carry the budget deficit in four years’ time to the lowest for a generation. The chancellor had some £30bn of financial headroom he had not expected in October. Sunak had choices, but he chose not to make them.
Living standards for the poorest in our society are already desperate. Sunak could comfortably have afforded the £6bn to lift universal credit by £20 a week, restoring the valuable increase made during the pandemic. He could have indicated that he would fully index all benefits to reflect the surge in inflation that is so swelling the Treasury’s coffers. His refusal to do so, estimates the Joseph Rowntree Foundation, will pull a further 600,000 people into poverty, of whom around a quarter are children. He could have indicated that he would revisit February’s package to help households with their energy bills, given the OBR forecast of a further 40% rise in energy prices in the wake of the Ukraine war. As a result, the price cap will rise to £2,801 in October, nearly £2,000 higher than 18 months ago, equivalent to a 6p rise in the standard rate of income tax.
He did none of these, contenting himself with raising the fund available to
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