Summary
Time for a recap
Chancellor Rishi Sunak has warned that the government cannot fully insulate people from the cost of living crisis.
Questioned by the Treasury Committee over the government’s £15bn cost-of-living package, Sunak said that it wasn’t possible, or advisable, to try to fully make up for rising living costs.
Sunak also argued that the package would make a very significant difference, especially to those struggling most.
But the chancellor faced heavy criticism from opposition MPs, who said he had rushed out the package to protect Boris Johnson and distract from the Sue Gray report into Partygate (which he denied).
Ali asks whether it would have been more orderly to have this statement alongside an OBR forecast
— Peter Hourston (@PeterHourston) June 6, 2022
Sunak defends - March forecast closed only very soon after start of Feb observation window so big uncertainty around future price cap
Sunak denies that there were political pressures on the CEO of Ofgem to give indication of Oct price cap
— Peter Hourston (@PeterHourston) June 6, 2022
Labour MP Siobhain McDonagh said it was a mistake to give second home owners two £400 reductions to their energy bills (let alone a triple payment for those who own three properties), while Rushanara Ali MP said Sunak was wrong to take part in Operation Save Big Dog.
Sunak also said he backed Johnson to remain as prime minister, despite fierce criticism from former Treasury minister Jesse Norman and theP M’s anti-corruption tsar John Penrose today ahead of tonight’s confidence vote.
Sunak also tried to play down concerns that his package will be inflationary, saying the government’s priority was to help those who most needed help.
He didn’t agree that the pound risked turning into an emerging market currency, as one Wall Street bank fears, but did acknowledge that the UK faces a short-term inflation problem fuelled by high energy prices and a tight labour market pushing up wages.
Asked by @CommonsTreasury if he shares Bank of America's concerns that #GBP is verging on emerging market territory, Rishi Sunak unsurprisingly says "No."
— David Milliken (@david_milliken) June 6, 2022
But he does flag UK-specific inflation worries about tight job market, price expectations and broad-based price rises.
Despite criticism, Sunak said he was considering whether to include electricity generators in his new windfall tax (which will fund a portion of the package).
He also insisted the Treasury wasn’t seeing signs of businesses in distress, despite warnings that 500,000 UK firms are at risk of collapse.
In other news.....
Transport troubles have hampered the return to work for many after the jubilee weekend, with more flight cancellations and a tube strike causing widespread disruption.
EasyJet cancelled a further 37 flights on Monday, as the staffing issues that have plagued the airline over half-term continued. Thousands more passengers had their travel plans upturned, after more than 80 flight cancellations by the airline on Sunday.
The airline blamed a “challenging operating environment” for the cancellations, which left some customers stranded abroad at the end of the half-term holiday.
A strike on the London underground today has also caused disruption in the capital, with commuters struggling to get to work (although many may have followed advice to work from home).
Petrol prices soared by almost 6p a litre at UK forecourts last week and hit record highs over the Jubilee bank holiday weekend, with drivers warned they could exceed 180p this week.
Ryanair is facing accusations of racial discrimination after forcing South Africans to take a test in Afrikaans before boarding flights home from the UK and Europe.
More than 3,300 workers at 70 UK companies, ranging from a local chippy to large financial firms, start working a four-day week today no loss of pay in the world’s biggest trial of the new working pattern.
Bonuses paid to the UK’s bankers, insurance brokers and other financial sector workers have hit a record high and are rising more than six times faster than average wages in the UK.
Elon Musk has accused Twitter of committing a “material breach” of his $44bn agreement to buy the company and has threatened to terminate the deal.
It’s the clearest indication yet that the world’s richest man is preparing to walk away from the takeover.
And new details have emerged over how Covid bounce back loans were misused.
You can keep track of tonight’s no-confidence vote in Andrew Sparrow’s Politics Live blog, here. GW
Peter Hourston, research assistant at the Institute for Government, hoped Sunak would have been quizzed about claims that technical problems prevented him from raising benefits in line with the current inflation rate.
Did dated IT systems means ministers had to stick with last September’s reading, as the chancellor said last month?
That is the end of the session - personally I was a little disappointed as to why no MPs (not even opposition members) challenged the chancellor on why he did not / could not uprate benefits by actual inflation back in April - was all down to old IT systems?
— Peter Hourston (@PeterHourston) June 6, 2022
Also not much clearer how the extra £millions the govt has pumped into the household support fund will get to those who actually need it or how it works.....
— Peter Hourston (@PeterHourston) June 6, 2022
