Government 'can do more' to help struggling families

Speaking in an interview on ITV’s Good Morning Britain, the UK prime minister did insist the government was doing a “huge amount” to support people with their rising energy bills. He also repeated warnings by chancellor Rishi Sunak about the dangers of a big new injection of support. 

He explained: “If we have an inflationary spiral of the kind that could be triggered, you will see interest rates going up.” He did, however, accept that the package of support announced by Sunak in the spring statement in March was “not going to be enough immediately to cover everybody’s costs”. 

As part of this package of measures, Sunak announced in March the government would raise the National Insurance threshold, going up by £3,000, and that there would be a 5p cut in fuel duty. 

This came off the back of the measures announced following the price cap increase, which saw Sunak announce a £150 rebate for people in council tax bands A to D in April. He also confirmed plans to give all households a one-off discount of £200 on their energy bills in October. 

Despite this, the government’s independent forecaster the Office of Budget Responsibility (OBR) - which published its Budget and Spending 2022 on the same day as the spring statement - said these measures would only reverse a sixth of the total tax rises this government has announced since coming to office. 

The OBR’s Budget and Spending Review also suggests the tax burden is still set to rise from 33% in 2019-20 to 36.3% of GDP in 2026-27 - its highest level since the 1940s. 

Responding to the spring statement at the time, the Money Advice Trust’s chief executive Joanna Elson said the statement was a “missed opportunity”, while StepChange’s chief executive Phil Andrew said the measures were a “drop in the ocean” compared to the dramatic rise in the cost-of-living. 

In his interview with Good Morning Britain, Johnson also rebuffed calls to put further taxes on oil and gas companies. He explained: “If you put a windfall tax on the energy companies, what that means is that you discourage them from making the investments that we want to see that will, in the end, keep energy prices lower for everybody.”

Despite this, today (4 May) environment secretary George Eustice said energy firms were paying enough tax “for now” but said the matter would be kept “under review”. 

According to the Telegraph, he told Sky News: “For now we judge that, yes, it is right that these oil companies pay more and they already do pay more - the headline rate of income tax or corporation tax is already 10% higher.” 

He added: “Nothing’s ever obviously ruled out, the tax system is kept under constant review, we have two key fiscal events a year.” 

This backs up comments made by Sunak in an interview with Mumsnet in which he said he wanted energy companies to invest in the UK’s energy system. He did go on to say, if the companies don’t “make those investments in our country and in our energy security, then, of course, that’s something I would look at and nothing’s ever off the table in these things”. 

He added: “But right now, what I believe the right thing to do is to encourage those companies to invest so we have more energy security and support the economy.”