Personal Account

Two years ago Mr Sunak boldly gave us furlough. Now he’s reduced to tinkering uselessly

We are facing the biggest fall in disposable incomes since the Second World War. The average household will be close to £ 3,000 worse off in real terms this year as inflation, which we heard this week had hit 6.2pc, takes its toll.

The energy price cap is climbing to £1,971 next month, a rise of 54pc. The 5p cut in fuel duty will take just £2 off the cost of filling up your car, which is currently around £ 91 on average. That cut brings the price back down to where it was last week.

All in all, it’s difficult to overstate just how squeezed everyone’s household finances are. And this cost of living crisis is unfolding now – not in six months’ time or in the years to come.

The Chancellor’s policies will help people in the future, but not when help is needed, which is right now. He has the right ideas, the good headlines and the slick delivery, but all of Rishi Sunak’s policies are too little, too late.

By the time the energy rebates come in October, which Mr Sunak boosted for some people via a cash injection into local councils, it will be too late. Energy prices will hit more than £2,801 that month, according to the Office for

Budget Responsibility’s estimate. That £350 rebate, some of which will be paid via council tax bills, will not make much of a dent in soaring energy bills. Ordinary families needed more help from the Chancellor to keep their homes warm and the lights on this month.

Those who earn less than £25,000 will save £ 169 in National Insurance from July when the thresholds are changed, but again this will do little to help pay the bills. Meanwhile, those who earn more face paying an extra £116 a year in NI.

The cut to income tax, in 2024, will be welcome. But it is needed right now, not years down the line when inflation is (hopefully) under control.

It was intended no doubt to soften the blow of the NI rise, but it seems distant and, for many, insignificant. The obvious thing to do would have been to scrap the hugely unpopular NI increase, especially in view of how much the outlook has changed since the increase was announced last year.

It has the added side effect of penalising workers in particular. Those who earn their money in other ways, such as from investments, will get off scot-free; indeed they will actually benefit overall because they will pay less income tax.

This Spring Statement didn’t just lack help for people who pay energy bills, which is to say everyone. There were also countless groups neglected by the Chancellor: commuters, those who live in rural, “off- grid” homes, people on Universal Credit, pensioners.

When it comes to the cost of living crisis Mr Sunak has consistently been too late with his grand plans to help. He has simply tinkered around the edges, seemingly hoping no one will notice that their bills are spiralling out of control.

It was the polar opposite of his first big speech two years ago, as the country shut down in the panic of the pandemic. Then, Mr Sunak made a bold move to bring in the furlough scheme, which was instant and necessary.

Faced with the cost of living crisis, he should have taken lessons from his former self.

It was intended no doubt to soften the blow of an NI rise, but it seems distant and insignificant