‘We need to be careful’ Sunak urges caution over cost of living crisis measures

Rishi Sunak shares concerns about making cost of living 'worse'

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Speaking at a Confederation of British Industry dinner, Mr Sunak said the Government had a “collective responsibility” to “help the most vulnerable” in British society. He claimed he would “evolve” as the situation continued to unfold and said the Government stands “ready to do more” to help the British public. But, he warned, “unconstrained fiscal stimulus” risks exacerbating the issue at hand, sticking to his mantra of refraining from providing extra allowances to offset the cost of living crisis. 

He said: “Right now we also have a collective responsibility to help the most vulnerable in our society. 

“And so as the situation evolves, our response will also evolve. 

“I have always been clear that we stand ready to do more. But at the same time, we need to be careful. 

“As Tony [Danker] rightly warned us this week, at a time of severe supply restrictions, unconstrained fiscal stimulus risks making the problem worse.” 

Sunak has previously said he wants to wait to see the extent of a further rise in regulated domestic power tariffs in the autumn before deciding on how much more support households need.

In his speech, he reiterated a promise made in March to cut business taxes later this year and encourage employers to do their bit to ease the economic pain for households by keeping up investment and innovation spending.

He said: “We need you to invest more, train more, and innovate more.

“In the Autumn Budget we will cut your taxes to encourage you to do all those things.” 

He added: “That is the path to higher productivity, higher living standards, and a more prosperous and secure future.”

CBI Director-General Tony Danker welcomed Sunak’s willingness to help households and provide incentives for business investment but said the need for support was immediate.

He said: “There’s a window now where firms are deciding whether to stick or twist on their spending plans, so not everything can wait until autumn. 

“Immediate delivery of existing commitments can help protect business confidence.”

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British inflation surged last month to its highest annual rate since 1982, with consumer price inflation hitting nine percent in April, pressuring Sunak to do more to help those struggling to pay rising food, fuel and energy bills.

Calls for an immediate revision of the Chancellor’s tax policies have come again from Tory backbenchers today during PMQs. 

Conservative former cabinet minister Chris Grayling told the debate: “I am pretty supportive of much of what this Government has done, how it has gone about dealing with a range of issues that have arisen.

“But I would like to make one very simple point to the minister and his colleagues. You cannot achieve growth by over-taxing our economy.

“The decisions that have been taken on tax have been taken. But the direction of travel needs to change and it needs to change soon.”

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