Sunak to save 9,000 soldiers
Budget bid to halt Forces cutback amid Putin fears
RISHI Sunak is expected to increase defence spending next week – and save the jobs of up to 9,000 soldiers.
Westminster sources say the Chancellor is planning to raise the £49billion defence budget in Wednesday’s mini-budget in response to Vladimir Putin’s brutal invasion of Ukraine.
One source told the Sunday People: “Ministers are no longer talking about defence cuts. They now see the need to beef up our forces to confront Russia.”
And that could reverse the planned reduction of 82,000 troops to 73,000 by 2025.
Mr Sunak’s spring statement will also need to soften the blow of the worst cost-of-living crisis in 50 years.
More than 50 Tory MPS are demanding a cut in motor fuel taxes by using the extra £2billion Mr Sunak has to spare from higher petrol tax receipts. A 5% cut in the 57.95p-a-litre duty – plus a similar decrease in the 20% VAT on fuel – would reduce the cost of a litre of petrol by 6p.
There may also be a top-up of the £200 grants for home energy bills that have to be repaid at £40 a year over the next five years.
The cost of gas and electric will go up £693 next month and another £1,000 from October.
The lowest paid are hardest hit because 12% of their income goes on heat and light compared to just 4% for the better off.
But ministers insist the Chancellor will not scrap the 1.25% National Insurance rise next month, which raises money for the NHS and social care.
That means the average £30,000-a-year earner will pay an extra £214 a year. Isaac Delestre, of the Institute for Fiscal Studies, said: “Tax rises over the last two years are as large as over the entire decade of Tony Blair’s premiership.”
The minimum wage will rise from £8.91 to £9.50 next month and pensions and Universal Credit will increase by 3.1%.
But inflation is heading for more than 8%, double the Chancellor’s prediction six months ago. Personal allowance is likely to remain frozen at £12,570 and the 40% upper tax rate will stay at £50,270.
Ian Stewart of accountants Deloitte, said: “While strongerthan-expected tax receipts give the Chancellor scope to slightly soften some of the impact of higher energy bills, it cannot remotely prevent a severe household squeeze in coming months.”