Treasury preparing emergency cost of living options for next prime minister
The Treasury is working on a menu of options to counter Britain’s cost of living crisis in readiness for an emergency mini-budget due to take place within two weeks if Liz Truss replaces Boris Johnson as prime minister.
With opinion polls and bookmakers’ odds showing Truss the clear favourite to move into 10 Downing Street next week, officials are drawing up plans that would allow the new government to move quickly over bills and longer-term reforms of the energy market.
Truss has said she wants to announce a package by the end of September but parliament will go into recess on 22 September for the party conference season. That would leave the chancellor, expected to be Kwasi Kwarteng, with little more than a fortnight to choose from a range of measures.
The Treasury accepts that the £15bn package of support announced by Rishi Sunak in May will be inadequate given the subsequent rise in the cap on average household energy bills and likelihood of a further big increase in January. It has picked up signals from the Truss camp that she intends to do more to help households facing rocketing gas and electricity bills this winter.
The new chancellor will be given a detailed briefing that will include forecasts for the cap, the likely impact on bills, the impact on different groups of households, and ways of targeting support.
The mini package of measures would include cuts in national insurance contributions, the scrapping of planned increases in corporation tax, and temporary removal of green levies from energy bills – all of which have featured prominently in Truss’ campaign – plus additional measures thought necessary in view of the 80% increase in the energy price cap to more than £3,500 expected on 1 October. Truss’ tax
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