This Wednesday the Chancellor of the Exchequer, Rishi Sunak, will present his “Spring Statement”.
Although this is not billed as a “Budget” – with major tax and spending decisions – such are the pressing issues facing Britain’s economy, it is hard to see how he can avoid it becoming one.
The Cost of Living Crisis is now becoming so acute that urgent action needs to be taken.
Households are already struggling. In April this will get even worse with food, energy and fuel bills all rising combined with cuts to income as the Government’s National Insurance increase kicks in. This will push many over the edge into extreme poverty, unable to heat their homes or feed themselves or their children adequately.
This is the worst cost of living crisis in half a century, and it is affecting families and communities in every part of the United Kingdom.
The Chancellor’s most urgent task is to provide immediate relief to those who are hardest hit.
He needs to uprate benefits in line with current inflation rates rather than the low September rate before food and energy bills really started to rocket.
In particular, he needs to restore the pensions triple lock – as was promised in the Conservative election manifesto – and to restore the £20 a week in Universal Credit that was taken away in October.
Rishi Sunak should also cancel the April rise in National Insurance which will affect those on the lowest incomes most. It is a deeply unfair tax as people start paying it on lower incomes than for Income Tax and many forms of income, such as rental income and capital gains, are not covered.
There is enough wriggle room in the nation’s finances for the NI increase to be delayed for a year while still maintaining the extra spending for the NHS. Alternatively, it could be made fairer by increasing the income at which NI starts to be paid.
VAT should be axed on energy bills, the cost of supplier failure spread over five years and there should be an extra discount for pensioners and people on middle and low incomes. This would see everyone benefit by around £200 with 9 million hardest-hit households getting a further £400 off their bills.
This should be paid for by a windfall tax on the North Sea oil and gas producers who are seeing soaring profits from rising energy prices and now, according to BP boss Bernard Looney, have “more cash than we know what do with”.
And to try and stop this from happening again, the Chancellor needs to announce a major strategic change in direction to reduce Britain’s reliance on foreign oil and gas. The best way to do this, in the long run, is to accelerate our move towards zero-carbon energy but most large-scale projects take years to construct so this won’t have an immediate effect on energy prices.
The quickest way to increase energy generation is probably to remove the effective ban on onshore wind turbines introduced by Conservative Prime Minister David Cameron in 2016.
However, there is an even quicker way to reduce our reliance on expensive gas and that is to dramatically improve the insulation of Britain’s homes. Too many houses are poorly insulated and, as a result, use far more heating than is necessary.
I remember a resident of Cumberland Towers telling me that before the council added external wall insulation, she needed four heaters to keep her flat warm. After the insulation was fitted, she only needed one. People living in houses that have had external insulation fitted tell a similar story.
We could significantly reduce Britain’s use of gas, either for heating or electricity generation – and quickly – by a large-scale national insulation programme.
This would avoid the demeaning spectacle of our Prime Minister going cap in hand to repressive regimes in the Middle East to try and persuade them to replace the oil and gas from the murderous regime in Russia.
We need the Rishi Sunak to take decisive action on Wednesday because at stake is the unacceptable and avoidable suffering for millions of our fellow citizens – especially children – across our country.