Pressure on PM as inflation soars
BORIS Johnson hinted at future help for people struggling with the rising cost-of-living, but there was no immediate extra support as inflation hit a 40-year high.
The Prime Minister and Chancellor Rishi Sunak are under intense pressure to act after Consumer Prices Index inflation soared to 9% in the year to April, up from 7% in March, according to the Office for National Statistics (ONS).
Mr Sunak warned that he could not “protect people completely” from the cost-ofliving squeeze, but the Prime Minister promised to “look at all the measures that we need” to get people “through to the other side” of the inflation spike.
Mr Johnson suggested that part of the rise in energy prices was because of the “tough” decision to sanction Russia following the invasion of Ukraine.
The rise in CPI was the fastest measured rate since records began in 1989, and the ONS estimates it was the highest since 1982.
The Bank of England has a mandate to keep inflation below 2%, but Governor Andrew Bailey has admitted to being helpless in the face of global pressures including a spike in energy costs and the war in
Ukraine. Mr Sunak said: “Countries around the world are dealing with rising inflation.
“Today’s inflation numbers are driven by the energy price cap rise in April, which in turn is driven by higher global energy prices.
“We cannot protect people completely from these global challenges but are providing significant support where we can, and stand ready to take further action.”
Opposition parties and some Tory MPs want to impose a windfall tax on oil and gas companies which have enjoyed bumper profits as a result of high global prices.
The money raised would be used to alleviate the pressure on households.
At Prime Minister’s Questions Mr Johnson was repeatedly pressed on the issue by
Labour leader Sir Keir Starmer.
Mr Johnson said the Government was “not, in principle, in favour of higher taxation” but promised a “sensible approach, governed by the impact on investment and jobs” – ministers have argued that a windfall tax would deter investment by the oil and gas giants.
“Of course we will look at all the measures that we need to take to get people through to the other side, but the only reason we can do that is because we took the tough decisions that were necessary during the pandemic,” he said.
The Chancellor has already pledged around £22 billion in support, including £9 billion to deal with household energy bills and measures to mitigate the impact of April’s rise in National Insurance Contributions (NICs).
But he faces calls for more action immediately, rather than waiting for the autumn budget, with inflation set to increase further this year.
Reports have suggested that measures including increasing the warm home discount by up to £600 to cope with rising energy bills are under consideration.