Yahoo Finance Rishi Sunak ready to 'do more' to help struggling households
Chancellor Rishi Sunak is "ready to do more" to help millions of households in an effort to tackle the cost of living crisis as inflation surges to the highest level in four decades.
In his speech at the annual dinner for the Confederation of British Industry (CBI) on Wednesday evening, he is expected to outline a three-point plan to help with the cost of living, boost growth and invest in capital, people and ideas to deliver long-term prosperity.
Explaining how the government is helping families and businesses during the tightest cost of living squeeze since the 1970s, he will say: "In October, we’re cutting energy bills by a further £200."
The 'cut', however, is an upfront discount with customers paying the amount back in five £40 instalments over the next five years, starting from next April, the chancellor had told the Commons in February.
Sunak had announced that the "vast majority" of households will receive £350 towards energy bills to "take the sting out of the price increase".
This would come in the form of the £200 upfront discount, repayable, and a further £150 via a council tax rebate for less expensive homes in the bands A-D.
Households would see the £150 discount on their council tax bill in April and the rebate of £200 in October energy bill.
"In just a few weeks’ time, the national insurance threshold will increase to £12,500," Sunak will tell the CBI. "That’s a £6bn tax cut for working people."
Read more: UK inflation hits 40-year high of 9% as cost of living squeeze intensifies
Sunak's speech comes in wake of Office for National Statistics figures showing UK inflation surging to 9% in April, as soaring energy bills squeeze household budgets.
Utility bills made up around three quarters of the increase in the annual inflation rate last month, according to Grant Fitzner, chief economist at the ONS. Electricity surged 53.3% and gas 95.5% in April.
Last month, the energy price cap, which limits the amount by which bills can rise, rose by 54% from £1,277 to £1,971. It is forecast to rise by a further 40% to £2,800 in October.
The chancellor speech will reiterate that the treasury's response will "evolve" as the "situation evolves".
"I have always been clear, we stand ready to do more," Sunak will say.
Read more: UK inflation is nearly 11% for poorest households, think tanks say
Sunak has also vowed to cut taxes for businesses later this year as surging inflation threatens to plunge the UK into recession. He will reassure firms that the government is on their "side" and urge them to help boost productivity and enterprise.
He is expected to say: "We need you to invest more, train more, and innovate more. In the Autumn Budget we will cut your taxes to encourage you to do all those things.
"That is the path to higher productivity, higher living standards, and a more prosperous and secure future."
He will tell business leaders: "Our role in government is to cut costs for families. I cannot pretend this will be easy.
"As I told the House of Commons yesterday [Tuesday]: There is no measure any government could take, no law we could pass, that can make these global forces disappear overnight. The next few months will be tough.
"We have provided £22bn of direct support. With fuel duty – cut by 5p a litre. Council tax – cut by £150. The taper rate in Universal Credit – cut by £1,000 for the average household. The Warm Homes Discount – increased to £150. The National Living Wage giving low paid workers a pay rise of £1,000."
Watch: Why are gas prices rising?
