The rising cost of living is central in everyone’s mind, especially those on low and fixed incomes seeing the price of food, energy and fuel go up and up. First and foremost it is vital to acknowledge that the last few years have been unprecedented – not least a pandemic that has severely damaged the global economy. Further global forces – Russia’s invasion of Ukraine and a fresh wave of lockdowns in China – mean families and businesses are being hit here at home through a significant rise in inflation and therefore everyday prices.
The Chancellor of the Exchequer has set out a series of measures to help alleviate these cost pressures, specifically targeted to the must vulnerable in our society but also something for everyone. A £15 billion package which will support the most vulnerable one-third of households with £1,200 each, bringing the total level of support to over £37 billion to help families with the cost of living.
The measures are:
- A £650 cost of living payment for every household on means-tested benefits. This means over 8 million of the most vulnerable households (around one-third of all in the UK) will be directly sent a one-off cash payment of £650. Payments from HMRC for those on Tax Credits will follow one month later. All those who live in the UK and are in receipt of Universal Credit, Jobseekers Allowance, Employment and Support Allowance, Income Support, Working Tax Credit, Child Tax Credit and Pension Credit are eligible.
- A £300 pensioner cost of living payment for every pensioner household in receipt of Winter Fuel Payment. Around 8 million pensioner households already receive Winter Fuel Payments, which have increased to £300, due to be paid out automatically in November/December.
- A £150 disability cost of living payment for those in receipt of disability benefits. For the nearly 6 million people who receive disability benefits – including Personal Independence Payments, Disability Living Allowance, and Attendance Allowance – there will be an additional one-off cash payment worth £150, paid out in September.
- An additional £500 million for the existing Household Fund from October, to ensure local councils can support those not covered by the above set of payments. Local councils will continue to have discretion over exactly how the funding is used.
- And for everyone, doubling the October £200 rebate to £400 – and turning it into a cash grant, cancelling the existing clawback mechanism, thereby turning it into a £400 cash grant for every household. This will continue to be delivered by energy suppliers from October, with payments spread over six months.
Greg said, "A significant proportion of how these measures will be funded is a new levy on energy companies. If I am honest I am uncomfortable with that. Personally I would have favoured direct tax cuts, using our Brexit freedoms to remove VAT on fuel and leveraging the incentives for oil and gas companies to invest in clean energy production to replace the green levies that currently force individual consumers to pick up the tab for net zero.
"I am particularly concerned that with a huge number of households and businesses across the Buckingham constituency off-grid and reliant on oil and LPG which are not covered by the price cap, the new levy could be passed back to consumers and I challenged the Chancellor in the House of Commons to put a mechanism in place to protect against that.
"But what is important today and in the immediate future is that the support is there, particularly for the most vulnerable in society, with the rising costs of living.
"Looking forward, I will continue to focus my efforts on persuading the Chancellor to lower taxes on individuals and businesses. As a conservative, I believe lower taxes stimulate economic activity, directly allow people to keep more of what they earn and businesses to reinvest their profits in growth and jobs. For the long term, that is what must happen."