Rishi Sunak is considering a further council tax rebate for Brits struggling with the cost of living crisis, after his spring economic statement was met by a very poor response on Wednesday.
The chancellor is reportedly now looking into offering a further multi-billion pound package to help people with soaring energy bills and other household costs, after cutting fuel duty by 5p and cutting National Insurance Contributions for employees on Wednesday.
Average household energy bills will increase by £700 a year next week and could rise by a further £1,000 by October.
Growth in the Consumer Price Index (CPI) hit 6.2 per cent in the year to February, a 30-year high, which is further putting the squeeze on household budgets.
Paul Johnson, director at the influential Institute for Fiscal Studies (IFS) think tank, said the average British worker will still be £400 worse off next year despite Sunak’s interventions last week.
The Sunday Times reports the chancellor could offer a cash giveaway later this year in the form of another council tax rebate, after announcing a £150 rebate in January, in the wake of new polling showing the cost of living crisis is the biggest issue for voters.
Boris Johnson’s deputy chief of staff David Canzini presented the numbers at a briefing of government special advisers on Friday, with one in attendance telling The Times that “the cost-of-living issue is a train about to hit us”.
Whitehall officials have suggested Sunak will step in to cover half of the increase in energy bills later this year.
Sunak in January announced a £150 council tax rebate for all households and a £200 discount on energy bills – which has to be paid back over the next five years – for the majority of households.
He was roundly criticised by think tanks, pundits and opposition politicians for not providing support of a similar magnitude in his Wednesday spring statement in the wake of dire new economic forecasts.
The Office for Budgetary Responsibility (OBR) now predicts the UK will experience its largest fall in living standards since the 1950s, after the economic effects of the Russian invasion of Ukraine take hold domestically.
Torsten Bell, chief executive at the Resolution Foundation think tank, said: “The decision not to target support at those hit by rising prices will leave low-and-middle income households exposed. [This means] 1.3m people, including 500,000 children, are set to fall below the poverty line this year.”