Rishi Sunak says Britain should prepare for ‘potentially significant’ deterioration in economy.
Rishi Sunak has delivered his mini-budget to help people with their finances as inflation hits a 30-year high.
The Chancellor announced a 5p cut in fuel taxes and a £3,000 increase in the social security threshold. He also announced that the OBR expects inflation to rise further this year to 7.4%.
The CPI inflation rate rose to 6.2 percent in February from 5.5 percent in January, the ONS said on Wednesday morning.
People will have an extra £3,000 they won’t pay Social Security for as part of Mr Sunak’s announced “biggest tax cut ever”.
He said the government’s fuel tax cut would represent the “biggest cut in fuel tax rates ever”. Labor slammed Mr Sunak for “not understanding the scale of the challenge”.
The Office for Budget Responsibility announced that the rise in inflation to a projected 40-year high this year would trigger “the largest single fiscal year decline in living standards since ONS records began in 1956-7.”
Sunak nurses budget ‘cut’, union says, as household incomes fall
Nurses have been ‘cut short’ by Rishi Sunak’s spring budget and will subsidize the NHS every time they buy petrol, unions said (Rebekah Thomas writes).
The Royal College of Nursing said the mitigating measures announced by the Chancellor would not be enough to prevent frontline NHS workers “having to choose between fueling their cars and feeding their children”.
It comes amid concerns that community nurses have been left out of pocket as they are not properly reimbursed for fuel used when driving to patients.
The Health Foundation said the government has not gone far enough to “protect the most vulnerable families from this latest economic shock”.
Liam JamesMarch 23, 2022 10:25 p.m
The Independent’s daily cartoon
Here is cartoonist Dave Brown’s take on Rishi Sunak’s springtime statement:
Liam JamesMarch 23, 2022 10:15 p.m
The budget is failing working people, unions say
Union leaders were quick to criticize the chancellor for tinkering with the fringes of the cost-of-living crisis.
Working class families are being “overwhelmed” by skyrocketing prices, Unite said.
Sharon Graham, the union’s general secretary, said: “With inflation at its highest level in 30 years, Rishi Sunak’s spring statement only plays on the fringes of this shocking cost-of-living crisis.
“Workers will still experience sleepless nights worrying about making ends meet and being overwhelmed by skyrocketing prices.
“His spring statement does nothing about the corporate elite, the billionaires who are stashing their loot but are laying off British workers through Zoom. Once again, the humble workers are bearing the heaviest burden while the super-rich get away with it.”
TUC General Secretary Frances O’Grady said: “Amid the biggest wages and bills crisis in living memory, Rishi Sunak’s spring statement has failed families who need help now.
“We have not received the urgent help with rising bills that families need and raising the Social Security threshold will mainly benefit better-off households.
“The fine print shows the value of wage packages is expected to drop by £11 a week this year. After 12 years of Tory government Britain needs a pay rise but this Chancellor has no plans to raise wages and give working people long-term financial security.”
Liam JamesMarch 23, 2022 10:00 p.m
Rishi Sunak warned that more people would be herded to the panels
Britain’s largest network of food banks has warned that Rishi Sunak’s refusal to adjust benefits for inflation will push more people into emergency food packages and turn the “cost-of-living crisis into an emergency”.
Benefits are set to increase by 3.1 percent, but with inflation expected to average 7.4 percent next year, activists had urged the chancellor to step in and ease the cost-of-living crisis.
In a statement, Emma Revie, the chief executive of food banking group Trussell Trust, said Mr Sunak had “failed to provide any security for those on the lowest incomes by failing to align spring benefit payments with the actual cost of living Statement.”
She said the decision resulted in a real cut in Social Security payments, which she described as “dangerously insufficient”.
After a top supermarket chef claimed some food bank users would turn down potatoes and root vegetables because they couldn’t afford the energy to cook them, Ms Revie said: “People are already making impossible choices between heating and eating, and we know people make meals leave out they cannot afford to run stoves and refrigerators and go into debt to buy essentials.”
Liam JamesMarch 23, 2022 21:29
‘Extremely disappointing’ and ‘little detail’: Business leaders slam Sunak’s spring statement
British business leaders have branded Rishi Sunak’s spring statement as “extremely disappointing” and “lacking in detail” as the Chancellor failed to allay fears of rising inflation and falling incomes.
The economy is expected to grow much more slowly this year than was forecast in October, and companies struggling with enormous cost increases had hoped for help from the chancellor.
Analysts warned that failing to put more money into the pockets of households facing the biggest drop in living standards since at least the 1950s would reduce spending and slow the economy.
Liam JamesMarch 23, 2022 21:10
Spring statement: What does Rishi Sunak’s mini-budget mean for your finances?
Rishi Sunak on Wednesday tried to highlight his credentials as a tax-cutting chancellor by cutting fuel taxes by 5p and pledging an income tax cut ahead of the next election.
But overall, his spring declaration means an increase in the tax burden while the country faces a huge drop in living standards.
So, aside from the din and rhetoric of the House of Commons shipping box, what does all this mean for your finances?
Ben Chapman goes through the changes:
Liam JamesMarch 23, 2022 8:50 p.m
Sunak: “I can’t protect everyone”
Rishi Sunak said he was unable to protect all households from the impact of rising global prices.
Asked about the Office for Household Responsibility’s findings on the decline in household incomes, the Chancellor told broadcasters: “We are facing the same challenges as many countries around the world – rising prices and high inflation.
“Inflation is slightly lower here than in America, similar to the eurozone, and there is uncertainty.
“I wish I could – but I can’t – protect everyone from the full impact of these global challenges, but where we can make a difference, of course we will, and that is why the measures announced today are a significant intervention.
“They will put billions of pounds back into the pockets of hard-working British families.”
The Office for Budget Responsibility lowered its growth outlook today as it forecast inflation will now average 7.4 percent this year and peak in the fourth quarter at 8.7 percent – the highest level since the oil shock at the end of the year 1970s and early 1980s.
Liam JamesMarch 23, 2022 8:30 p.m
Sunak ‘cheated’ Brits, says Ed Davey
According to Sir Ed Davey, Rishi Sunak is cheating “the British people”.
The Liberal Democrat leader said the chancellor had masked a huge tax hike by posing as the chancellor of the tax cut.
Liam JamesMarch 23, 2022 20:10
Energy price cap could rise another 40% in October – OBR
Energy bills could be around £1,500 higher by the end of this year, according to the Office for Budget Responsibility (OBR).
A 50% hike in the energy price cap in April will add more than £600 to bills this year.
Due to an extreme increase in wholesale prices, the upper price limit is to be raised again in October. OBR forecasts it to rise 40 per cent to £2,800 compared to £1,277 last October.
The Chancellor today announced measures to ease the cost of living crisis, but households will gain at most a few hundred from the relief measures.
Even add in the £150 tax refund and the £200 temporary refund on bills, families can’t avoid being hundreds of pounds lighter this year.
Liam JamesMarch 23, 2022 7:48 p.m
Northern Ireland is stuck with another £34m it cannot spend
An extra £34m for Northern Ireland in the spring declaration cannot be allocated without executive power, Stormont’s finance minister has warned.
Conor Murphy said it will sit with the £300million already waiting to be allocated with no executive to approve it.
The resignation of Paul Givan as First Minister earlier this year has meant that a proposed three-year Stormont budget cannot be passed.
Mr Murphy said he had asked Stormont’s Treasury to fence off the £34million for living expenses so he could allocate funds but had received no reply.
He said he also asked departments to provide cost estimates for family support interventions.
“We have not yet received an answer from the Treasury as to whether or not this can happen. If it doesn’t happen then it just remains with the £300m we’re sitting there that can’t be allocated and that’s a huge disadvantage for people who are really struggling and could use some support from us,” he said.
Liam JamesMarch 23, 2022 7:30 p.m