Statement backlash

Sunak pressed to offer more help amid Tory unrest

Rishi Sunak: ‘I can’t make every problem go away’

Rishi Sunak is under pressure from Conservative backbenchers to offer further support to hard-pressed families after Boris Johnson conceded that the government needed to do more to help households cope with the rising cost of living.

Unrest among Tory MPs follows widespread criticism of the Chancellor’s Spring Statement which was regarded as a missed opportunity to tackle rising energy and food bills.

New data from the Resolution Foundation think tank shows wealthier families will be £3,000 worse off this year and a million people will be pushed into poverty.

Only one in eight households will see their tax bills cut during this parliament while the average family faces a £1,100 hit in real incomes in the next financial year rising to £3,200 for those in the top 10% of working-age households.

Torsten Bell, the foundation’s director, said Mr Sunak had not done enough and this parliament is poised to be “the worst on record for household incomes”.

Richard Hughes, chairman of the Office for Budget Responsibility, said two-thirds of the drop in real incomes was caused by inflation and the other third by higher taxes.

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Mr Sunak has defended his Spring Statement, claiming that it is“impossible to fully protect people against” rising inflation.

His backers accept that the public finances have taken a battering after the emergency support provided during the pandemic and that the Russia-Ukraine conflict was now adding to the rise in energy costs, including the price of petrol and diesel. Borrowing levels were now at levels not seen since World War Two.

“That is all pretty exceptional so it is not surprising that dealing with the aftermath of that is also pretty exceptional,” he said. “The plan going forward is to reduce taxes for people so we can put more money in their pockets to reward their hard work and that is what yesterday’s statement was about.”

He countered claims that taxes were rising by pointing to the fuel duty cut, the reduction in VAT on energy saving measures, and raising the national insurance threshold, as well as cuts in the cost of employing staff.

“I have always been honest in that these are global challenges we are facing,” he said.”The hardest part of this job is not being able to do everything people would like me to do. I can’t make every problem go away. But where we can make a difference we want to.”

But Mr Sunak’s package was seen to be focused too much on longer term tax-cutting, whereas families and businesses are calling for immediate action.

The 5p cut in fuel duty was one of the few actions with to have immediate effect, but critics pointed out that this only took the price of fuel back to where it was a week ago when it had rocketed on the back of the Ukraine war.



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