Fiscal Policy: Cost of Living

Treasury written question – answered on 28th September 2022.

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Photo of Matthew Offord Matthew Offord Conservative, Hendon

To ask the Chancellor of the Exchequer, what recent assessment he has made of the potential impact of his Department’s fiscal policies on the cost of living.

Photo of Richard Fuller Richard Fuller The Economic Secretary to the Treasury

The Government understands that people across the UK are worried about the rising cost of living and has taken decisive action to get households and businesses through this winter and the next, while ensuring action is fiscally responsible.

The Energy Price Guarantee means that a typical UK household will pay no more than £2500 a year on their energy bill over the next 2 years. While the Energy Bill Relief Scheme will provide support for businesses, charities, and public sector organisations.

These measures will save the average household around £1000 a year from October, and protect businesses from soaring energy costs, providing them with the certainty they need to plan through the acute crisis this winter.

In addition to this support for energy costs, the Government has already announced £37 billion of targeted support for the cost of living this financial year. This will provide millions of the most vulnerable households with £800 support through the £150 Council Tax rebate and a one-off £650 Cost of Living Payment, with additional support for pensioners and those claiming disability benefits.

As part of the Growth Plan, the Chancellor announced the reversal of the 1.25 percentage point increase in National Insurance from November, and a cut in the basic rate of Income Tax to 19 per cent from April 2023.

These tax cuts will put money back into people’s pockets as well as fuelling economic growth. The Chancellor has been clear that growth is the only sustainable way of increasing living standards for all.

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