As a result of Russia’s actions in Ukraine, the economic outlook is now as uncertain as it was at the outset of the pandemic.
This is the outlook that the Chancellor had when he made his Spring Statement. The measures being announced had to provide help now, whilst leaving room to manoeuvre later if needed.
Government has never been able to control prices, or remove the impact of every global shock, but with a strong economy it can offer protection.
That’s what happened during Covid-19 and it’s what must be done now.
The energy price cap continues to play an important role and the steps announced by the Chancellor a few weeks ago mean residents have significant protection from what would
have been an unmanageable rise in electric and gas prices. These will not absorb all the cost rise – but will halve it for most.
Fuel prices continue to go up and down daily too, and whilst the trend looks like these will start to fall as oil producing states increase supply, the Chancellor has reduced duty by a record 5p per litre for a full year – costing almost £6 billion – and retailers have committed to passing this on in full.
Some have suggested this doesn’t go far enough but with future prices so uncertain, going further at this point could have exposed taxpayers to monumental costs which would have to be paid for by sharp cuts in public services.
But the best way to help residents with costs is to take less in taxes, and the journey to reducing personal taxes started this week. The Personal Tax Allowance – how much
someone can earn without paying a penny in tax – has now been increased by £3,000 this year. And from 2024 the basic rate of income tax will also reduce.
For those who need that extra help now though, the Household Support Fund has been doubled to £1 billion. This is money given to councils to help those who need it and having
had several cases brought to my attention, I’ll be encouraging Burnley Council to adapt its criteria so as many local people as possible are helped.