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Chancellor Rishi Sunak under pressure at next week’s budget to offer help to those finding it hard to pay their bills



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With the cost-of-living crisis hitting struggling householders, the Chancellor Rishi Sunak is under growing pressure at next week’s budget to offer some help to those finding it increasingly hard to pay their bills.

Political editor Paul Francis sets out the key challenges along with the possible options to address them.

Chancellor Rishi Sunak is under growing pressure at next week’s budget to offer some help to those finding it increasingly hard to pay their bills. Stock picture
Chancellor Rishi Sunak is under growing pressure at next week’s budget to offer some help to those finding it increasingly hard to pay their bills. Stock picture

The soaring costs of energy:

The government has already set out proposals it says will ease the burden of rising energy prices but did so before the invasion of Ukraine by Russia.

The key pledges were a £150 rebate on council tax bills, but only for those in bands A to D, along with a £200 loan.

One option might be to increase the rebate but most authorities are already sending out bills with details of the £150 discount and how it will work, so that could be problematic.

Having said that, councils administering the rebate will have established arrangements to process the discounts.

Charities are already warning that hard-pressed families face decisions on whether to eat or heat.

Charities are already warning that hard-pressed families face decisions on whether to eat or heat. Stock picture
Charities are already warning that hard-pressed families face decisions on whether to eat or heat. Stock picture

The Chancellor might choose to wait until the Autumn when the energy regulator’s cap will be reviewed.

The Institute for Fiscal Studies (IFS) suggests the impact of the Russian invasion of Ukraine on energy prices means these measures may now protect consumers from just a fifth of the coming increase.

Fuel costs:

Eye-watering increases at the petrol pump have triggered an understandably angry reaction from motorists and hauliers, with the spectre of a litre of petrol pushing the potential costs up to £2. Proposed increases in fuel duty have now been cut 11 times in succession and in his budget last October said he was cancelling the proposed rise “to keep the cost of living low.”

Expect no change here.

Fuel costs at the pumps have continued to rise. Stock picture
Fuel costs at the pumps have continued to rise. Stock picture

National Insurance:

Could there be scope for changes here? Some believe the plans for National Insurance rates to increase by 1.25% on April 1 could be postponed, a move that many would welcome.

The option of delaying the implementation of a levy for renewable energy might also be considered - at a cost to the Conservative’s green credentials.

There is already disquiet that the increase could have a disproportionate and detrimental impact on the lower-paid.

This is because workers pay 12% National Insurance on earnings between £9,564 (£9,880 from April) and £50,268. However, earnings above this amount attract a rate of just 2%.

Some believe the plans for National Insurance rates to increase by 1.25% on April 1 could be postponed. Stock picture
Some believe the plans for National Insurance rates to increase by 1.25% on April 1 could be postponed. Stock picture

Defence spending:

If the conflict between Ukraine and Russia as showed anything it is the unpredictable nature of international politics.

Few predicted that what is by any name a war would break out and that the UK would be actively arming one side.

If there was ever a case for the defence budget to increase, now may prove the time.

Reports suggest Chancellor may use the budget as a springboard for a fresh look at the defence budget without necessarily any concretes commitment.

If there was ever a case for the defence budget to increase, now may prove the time. Stock picture
If there was ever a case for the defence budget to increase, now may prove the time. Stock picture

As things stand the government spends just under 2% of the UK's GDP on defence.

Hospitality:

There was not much goodwill between the hospitality sector and the Chancellor last year, with Mr Sunak facing criticism for his lack of support for the struggling hotels, bars, restaurants and clubs who were suddenly facing another unexpected and unplanned for lockdown just before Christmas, a key trading time of the year.

The Chancellor responded with a £1bn package of business grants and help with sick pay. One option could be to extend this help for a short period to help small businesses.



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