Sage Sunak today pledges to do more to help families cope with the cost of living by spending the government’s £ 30 billion “war chest” on higher taxes.
The chancellor is expected to outline measures in his spring statement to reduce the burden of national insurance increases on poor households and reduce taxes on petrol and diesel sales in response to rising fuel prices.
However, he spoke in support of the US Alliance, but said that maintaining some independence was important for the health care sector.
Figures from the Office for National Statistics (ONS) show tax receipts of £ 71.9 billion last month. Total acceptance this year is £ 37 billion more than the Office for Budget Responsibility (OBR) forecast in October.
However, the public sector borrowed .1 13.1 billion in February, more than the £ 8 billion expected by economists due to high debt-to-interest payments associated with inflation.
Treasury sources warned that while inflation is expected to remain high for several months, there is limited room for Sunak’s strategy. While he is expected to announce a reduction in the headline rate of fuel tariffs, a reduction of less than 5p per liter is expected amid concerns that any reduction in government tariffs will be permanent.
To ensure that poor families are not affected by the new health and social care tariffs, workers are expected to announce an increase in the level at which they begin providing national insurance. There is also speculation that he will increase the universal debt allowance to protect the most vulnerable families from rising food and energy costs.
The chancellor is expected to argue that the global financial instability caused by the war in Ukraine makes it more important to control government debt and reduce debt after the epidemic. Existing debt is heavily linked to inflation, which weakens public finances if recent growth continues. The ONS said government interest payments reached £ 8.2 billion last month, up from £ 5.4 billion in February last year. According to the Bank of England, the cost of food and energy is helping to increase the cost of living for households, and this could lead to almost double-digit inflation this year. Consumer inflation is already at a 30-year high of 5.5 percent. The ONS said both VAT and fuel tariffs were raised in February.
In the 11 months since February, total UK public sector debt has fallen to 4 134.8 billion, down from £ 290.9 billion borrowed in the same period a year ago, when the government was fighting the epidemic. Sunak is expected to unveil a healthy set of public finance estimates tomorrow on the back of bumper tax revenue driven by declining unemployment and rising inflation income tax receipts. However, due to high debt-service costs and low economic growth, debt for 2022-23 is expected to rise above previous estimates.
According to Capital Economics, OBR is expected to increase its borrowing from £ 83 billion to £ 120 billion in 2022-23. Michael Stelmach, an economist at KPMG, said: “A more persistent inflation outlook and rising interest rates will put pressure on public finances in the coming months.”
Martin Lewis, founder of the MoneySavingExpert website, told MPs yesterday that the government’s package was insufficient to help low-income people cope with rising energy bills. “It simply came to our notice then. It’s really as simple as that, “he said. Lewis added that some energy companies are increasing customers’ direct debits disproportionately, suggesting that this is a deliberate strategy to help cash flow.
Gillian Cooper, head of energy policy at Citizens Advice, told the Commons Business Committee: “Without further support, we are heading for a crisis where a significant portion of the population cannot afford to keep their homes safe and warm.”