Rishi Sunak is facing mounting pressure to help families with the soaring cost of living after he promised to cut business taxes and said: “Where we can act, we will.”
The Chancellor last night told business leaders “the next few months will be tough” after inflation shot to 9%.
And in recent days, a flurry of speculative stories have leaked out of the Treasury about how he might help Brits.
But CBI chief Tony Danker, who hosted last night’s City dinner, blasted: “What are we waiting for?” The business leader called for a “sense of urgency” today from the Chancellor, telling the BBC : “I’m struggling to see why we wait longer.”
Keir Starmer said the PM is “choosing to let people struggle” while he “dithers” on how to act.
Money saving expert Martin Lewis repeated his warning that “civil unrest” could spring from high bills - and said his great hope is “populist” Boris Johnson will reflect the public mood.
The problem is, while Treasury officials insist all options are on the table, they haven’t decided what to do.
Mutinous Tory MPs want tax cuts but these risk missing out the very poorest in the bills emergency. Others urge the Treasury to bring benefit and pension rises forward to help the nation's most vulnerable.
Meanwhile there are claims of a row over a windfall tax on oil and energy giants, which hasn’t been ruled out.
It’s all speculation and sources stress nothing is confirmed. But what are the ideas being run up the flag pole? Here’s what you need to know.
Business tax cuts this Autumn
It looks increasingly likely there’ll be tax cuts for business in a Budget this Autumn.
On Wednesday night the Treasury issued a statement by the Chancellor to firms saying: “In the autumn budget we will cut your taxes to encourage you to do all those things.”
Curiously, the reference to an autumn budget was cut from the final speech - with Mr Sunak instead saying: “Our firm plan is to reduce and reform your taxes to encourage you to do all those things.”
But insiders insist business tax cuts are still on the cards. The Sun reported they could get higher allowances for research and development, and tax breaks on investments.
Another £200 for energy bills - but only this summer
Families in council tax bands A-D are due a £150 rebate to help pay for energy bills, hiked £693 on April 1.
There have been reports that the Chancellor could repeat this ahead of another expected rise on October 1.
Alternatively, he could extend a £200 repayable discount off energy bills that’s being issued in October.
But critics - including some Tory MPs - are sceptical about the discount scheme given it has to be paid back.
Whatever happens to help with energy bills, it’s likely to be announced in late July or early August, as that’s when Ofgem could announce the next rise in the price cap for October.
Mr Johnson’s spokesman previously said “August and later in the year is around the time there may be more certainty” and “we may have more to say at that point”.
Warm Home Discount quadrupled
The Warm Home Discount Scheme is being raised this winter from £140 to £150, and extended to 780,000 more households bringing the total eligible to 2.7million.
It mostly goes to people on low incomes or who get a Guarantee Credit element of Pension Credit.
Now it’s understood Business Secretary Kwasi Kwarteng has put forward an idea of raising this to £500.
According to The Times, Treasury officials are examining options for a one-off rise in the discount this winter - £300, £500 or even £600.
But it’s understood the ideas have been kicking about for some time with no clear plan yet. A Treasury source said the idea would be kept under review.
Rise in the Winter Fuel Payment
People born before September 1955 are eligible for a Winter Fuel Payment of between £100 and £300. According to The Times, extending this is one offer on the table - but further details are scant.
Bringing forward a 1p income tax cut
Rishi Sunak has already pledged to cut income tax by 1p in the pound from 20% to 19% from 2024.
Dismissed as a cynical election ploy by his critics, it would save a £30,000 earner around £175 a year. Those on under £12,570 a year see no benefit, and because the threshold is frozen, gains could be wiped out by inflation.
But under pressure from Tories to cut tax - after the raising the burden to the highest in decades - there are claims Mr Sunak could bring the 1p cut forward.
And he set hares running on Tuesday. Asked by a Tory MP if his “absolute priority, coming up to the Budget” was a tax cut he agreed. Mr Sunak added: “That is our priority… Our priority is to keep cutting taxes for those in work, including by cutting income tax, as soon as the public finances allow.”
Sources insisted nothing had changed since the Chancellor promised a tax cut in 2024, but pressure is growing.
Furious row over a windfall tax
Tory ministers remain locked in a tussle over whether to slap a windfall tax on oil and energy giants.
Keir Starmer slammed the “hokey-cokey” over the plan, which Labour has put forward claiming it could save households £600.
Internal government polling showed the levy was "wildly popular" with voters but Boris Johnson launched a vehement defence of oil and gas firms on Wednesday.
While the PM didn’t rule out a windfall tax, his aides briefed The Times that he is against it, with one saying it would be an "ideologically unconservative thing to do”.
Tax hawk leadership hopeful Liz Truss also made clear she’s not in favour, saying: "My view is lower taxes are the best way to attract more investment."
That’s put No10 on a collision course with Treasury officials who believe that the levy is "politically unavoidable”, according to reports. Sources denied No10 was blocking a windfall tax.
Still no movement on Universal Credit changes
So far the Chancellor has ignored mounting pleas to bring forward next year’s rise in benefits to help the poorest.
He tried to blame technical problems with computer systems - a suggestion dismissed by experts and ex-DWP chief Iain Duncan Smith, who said “I don’t believe a word of it”.
The Mirror understands officials have been discussing changes to the benefit system to help people.
But one DWP insider slapped down reports in the Daily Mail that Universal Credit rules will be tweaked to help workers on the benefit keep more of their salary.
The work allowance and taper rate - which affect how fast benefits slide away when you earn - were already both made more generous before Christmas. The source said further changes to those two elements are very unlikely.
