Rishi Sunak posed for the media as he left 11 Downing Street for the House of Commons
(Picture: AP)It is almost exactly two years since Rishi Sunak unveiled a package of measures that by his own description were “unprecedented in the history of the British state” to protect workers, families and businesses from the impact of the first Covid lockdown.
Anyone expecting a similarly spectacular response to the cost of living crisis - expected to be the worst since the 1950s- and the impact of the war in Ukraine in his Spring Statement will have been disappointed.
This was a curiously low-key set of announcements given the alarming scale of the challenge facing millions of British people in their everyday lives over the coming months. Even one of the most eye-catching headline giveaways - 5p off the duty on a litre of petrol - only wipes out one week’s worth of price increases at the pumps.
These are tumultuous and fast moving times and the Chancellor at times gave the impression he was more concerned about fiscal tidiness than protecting those most exposed to the cold economic winds blowing from Russia. In economic, if not meteorological terms, winter is coming.
To the surprise of some commentators there was nothing more to offset soaring energy bills beyond the £9 billion loan and council tax rebate package unveiled last month.
The Chancellor may be hoping that the softer wholesale gas prices of the past few weeks - in part a fortunate by-product of glorious Spring weather - means that the most apocalyptic forecasts about energy bills later in the year will prove far too pessimistic.
Projections shortly after the invasion of Ukraine began had suggested the cap on bills could rise to as much as £4,000 in the Autumn, clearly enough to cause widespread hardship and possibly even civil unrest, next winter.
But on current trends bills will “only” rise to around £2,700. That is still appallingly bad and certainly enough for millions of vulnerable households to be facing incredibly tough “heat or eat” decisions when the cold weather returns.
In all likelihood the Chancellor is waiting to see in which direction wholesale prices go over the coming months before committing to any further measures in the Autumn Budget. But it seems probable he will have to intervene again.
The increase in the National Insurance threshold is a neat way of reducing the tax bill for the majority of workers with those on lowest pay benefitting the most. However, it appears odd to be bringing it in during the same financial year that the rate of National Insurance goes up by 1.25 per cent to pay for social care.
The economic forecasts drawn up by Office for Budget Responsibility suggest that Britain can avoid recession, keep inflation below 10 per cent, and generate enough tax revenue for the Chancellor to make deep cuts in the deficit.
It was that upbeat assessment that allowed the Chancellor to “deliver on the promise” to cut taxes for hardworking families with a penny off the basic rate of income tax by 2024. Let us hope that such a bold and Tory backbencher pleasing pledge does not turn out to be a hostage to fortune in two years time.
Who knows in which direction the conflict in Ukraine will take over the coming months? Capitalism has a remarkably ability to adapt to challenging circumstances. But in a bleak scenario where the price of energy, fuel, food and other essentials continue their upward trajectory over the rest of the year Mr Sunak may come to regret missing this opportunity to invest more in protecting the most vulnerable - and less in a £5 billion pre-election giveaway.
