Will the Chancellor announce new measures to ease the cost of living crisis? Rishi Sunak is under pressure to do so as new figures out today show that UK inflation jumped to 9 per cent in the 12 months to April, up from 7 per cent in March. It comes as Labour continue to push calls for a windfall tax – something Sunak has suggested he is considering – along with an emergency budget – something the Treasury has ruled out.
Only cabinet ministers seem to have their own ideas as to what the government’s response ought to be. This morning the Foreign Secretary Liz Truss suggested in a media round that a windfall tax could deter future investment into the UK. Truss suggested cutting taxes was the best way forward: ‘What we know is a low-tax economy helps deliver that business investment, helps to deliver those jobs, and I know the chancellor is looking at those things’.
In terms of what the Treasury is likely to do, the Chancellor has repeatedly said there are limits to how much the government can help. Yet an announcement is expected before the Autumn budget – with a package to help with energy bills expected by the summer.
Will it be enough? Among Tory MPs the idea of a windfall tax is gaining popularity – even if it hands Labour a political win. Ultimately it leans into a wider concern – that the government does not look as though it is doing enough. As one senior Tory puts it: ‘We need to have a plan. At least with Cameron and Osborne there was the idea of a “long term economic plan”‘. Along with new measures, MPs would like a wider narrative or economic message they can point to as tricky questions over cost of living look set to dominate for the foreseeable.
Got something to add? Join the discussion and comment below.