Sunak’s safe hands still couldn’t work miracles

THE only thing that can be said about Rishi Sunak’s Spring Statement is that he did the best he could with the hand he has been dealt.

Faced with extraordinary costs and levels of borrowing from the Covid crisis and now with the enormous uncertainty created by Russia’s war in Ukraine, the Chancellor was limited in what he could achieve yesterday.

We saw from the furlough scheme that Mr Sunak is no coward and will make the big bold moves when necessary.

But there was one glaring omission from his mini-budget: help for millions of pensioners.

We know he is not foolhardy. To gamble now with transformative tax cuts and big spending promises when we still do not know the impact of Russian sanctions and the war’s wider economic consequences, would have been unnecessarily risky.

Nevertheless, he is faced with finding solutions to the cost of living crisis engulfing this country and other nations.

What he announced yesterday will help but will not end the difficulties.

The cut in fuel duty by 5p in the litre is more than welcome and there will now be pressure to make that permanent.

The raising of the point where people pay National Insurance Contributions (NICs) to protect the first £12,570 of earnings is also to be applauded and opens the door to much needed tax simplification on income.

The £330 tax cut in effect wipes out the new social care levy on NICs for many people. Using Brexit powers to remove VAT on home improvements to help with clean energy will allow people to start making the necessary changes.

The promise of a 1p cut in the basic rate of Income Tax ahead of a 2024 election may feel a little like “jam tomorrow” when people need cost reductions now.

In truth, the Chancellor will need to do more than that in cutting tax before the election.

There is no doubt Mr Sunak is on people’s side as is the Government. But at some point down the line he will have to look at transformative measures not just tinkering.