To ask the Chancellor of the Exchequer, what assessment he has made of the implications for his policies of the findings of the Bank of England Monetary Policy Report of 3 February 2022, that pay has risen by less than prices, such that households real incomes are being squeezed.
We understand that inflation, if higher than income growth, can reduce households’ real income, and that higher prices can increase the cost of living for people and households.
The government is providing support worth around £12 billion this financial year and next to help families with the cost of living. Much of the support in place that will help ease these pressures is UK-wide, for example the increase to the National Living Wage, the change to the Universal Credit taper rate and increase to the Work Allowance, as well as freezes to alcohol duty and fuel duty.
In addition, the government has announced a package of support to help households with rising energy bills, worth £9.1 billion in 2022-23.
The government’s Plan for Jobs is also helping people into work and giving them the skills they need to progress – the best approach to managing the cost of living in the long term.