Rishi Sunak defends cost-of-living subsidies for second homeowners and wealthy retirees Business News

Rishi Sunak has warned he cannot fully protect struggling households from huge bill hikes and defended his £21billion bailout package which handed out hundreds of millions of pounds to second homeowners and the wealthy retirees.

The Chancellor also denied coming under pressure from Boris Johnson to unveil aid for those affected by a cost-of-living crisis to distract from Sue Gray’s report into the party and rule-breaking at Downing Street.

Mr Sunak was grilled by the Treasury Select Committee on Wednesday, just hours before the Prime Minister faces a confidence vote that could end his term.

He was asked about the fairness of the new cost-of-living supports after research showed wealthy retirees were among those who would see the biggest benefits.

Labour’s Siobhan McDonaugh asked how it could be fair for people with multiple properties to receive multiple £400 rebates.

Mr Sunak said this was an inevitable consequence of the fact that some of the aid offered was universal rather than targeted.

A number of campaign groups had urged him to ensure all aid is targeted to those most in need, to get the best value for money and reduce the likelihood of more food inflation.

The Chancellor also told MPs the Prime Minister failed to ask him to make the spending announcement a day after a damning report by senior officials into several anti-lockdown parties at Number 10 emerged.

He said the timing of the financial support announcement last month was because the Treasury had to wait until it had enough data on expected increases in energy prices this fall. .

The Chancellor said: “The way the price cap works, there’s an observation window from February to August, until you’ve finished you don’t know what that will be – although it there were estimates, there were no actual data.

“We couldn’t do that for the spring statement because the observation window had barely opened for the price cap, so everything could have the potential to be very mispriced.

“I’ve always said I want to strike the right balance between reassuring people and waiting for enough information to make sure it’s sized correctly.”

Mr Sunak had for weeks pushed back against suggestions from the opposition benches and economists that he should step in immediately to offer help with rising bills.

The Chancellor said last month it would be “stupid” to announce support this summer, before changing her mind.

The timing of the change of heart sparked speculation it was motivated by a desire to divert public attention from anger over the series of booze-inducing events in Downing Street during the lockdown.

On Monday, Mr Sunak also told the Treasury Committee that he could not fully protect people from steep rises in the cost of essential goods.

Consumers face a further £800 rise in the cost of heating and powering an average home when Ofgem’s price cap is revised in October, taking bills to around £2,800 a year.

High energy costs have helped push inflation to 9%, its highest level in 40 years, and further increases are expected later in the year.

Mr Sunak stressed that the support measures introduced last month are “temporary” and ignored suggestions that he left the door open for further measures.

He told the committee: “When asked about other measures, I always give the same answer – I wouldn’t read anything more or less into it.

“It’s that over the past two years, I’ve always tried to be responsive to the economic situation as I see it and as it affects the country.

“The structure of what we’ve put in place is by definition temporary and it’s a neat, well-constructed package.”

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This notice was published: 2022-06-06 16:59:20

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