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What thinktanks are saying about Sunak’s cost of living support package

Here is reaction to Rishi Sunak’s cost of living support package from two thinktanks seen as being on the left.

From Torsten Bell, chief executive of the Resolution Foundation

The chancellor has announced a big and very welcome package of support for households facing fast rising energy bills. It almost doubles the level of energy support to over £30bn, and fills the huge gap in previous announcements with large targeted support for those hit hardest.

The decision to provide one-off payments this year to poorer households, pensioners and those with a disability is a good attempt to target those with higher energy bills – although the relative lack of support for larger families stands out.

The chancellor’s commitment to uprate benefits next April in line with very high inflation also offers important security for lower income households that their living standards will be protected from surging prices tomorrow as well as today.

From Miriam Brett, director of research and advocacy at Common Wealth

The biggest threat facing our future is the climate emergency and key to the transition is the need to create a green and just tax system. The UK is already an enormously profitable place for oil and gas companies. Today’s announcement by the Chancellor on the investment allowance to encourage firms to invest in oil and gas extraction in the UK casts fresh doubt on the UK government’s willingness to tackle the climate and environmental crises.

Research by Common Wealth and NEF found that despite its climate commitments, the UK continues to offer a number of tax reliefs for both domestic production and consumption of fossil fuels. In the last five years, the value of UK support to fossil fuels amounted to an average of approximately £12bn a year. A rapid and just phase out of fossil fuel subsidies should be a core component of a just transition.

And here is reaction from two thinktanks on the right.

From James Heywood, head of welfare and opportunity at the Centre for Policy Studies

This is a significant package of support targeted at those on the lowest incomes, and it will bring welcome relief to many families facing eye-watering increases in their bills. The Chancellor is right to use the means-tested benefits system to ensure cash goes to those who need it most, as we have been advocating for at the CPS. It is important to emphasise that these measures are pain relief, not a complete anaesthetic. The government cannot completely offset the impact of rising prices for every household – many still face an incredibly tough year ahead.

The reference in this quote to “pain relief” is a reminder than in the Sunday Times at the weekend Tim Shipman said Boris Johnson was willing to back Sunak’s plans for a windfall tax, but only if some of the money was spent on nuclear power stations and offshore windfarms, that would cut energy bills in the long run. Shipman quoted an adviser arguing that spending on “surgery” was ultimately more beneficial than spending on “pain relief”. If Shipman was right, today’s announcement shows that Johnson lost the argument.

From Mark Littlewood, director general at the Institute of Economic Affairs

The worst way to make policy is to oppose something half-heartedly in principle, then procrastinate and finally change position as a result of political expediency. It is painfully obvious that in the battle of ideas, the government enters the arena wholly unarmed.

Rachel Reeves, the Shadow Chancellor, is right to say that this represents a policy victory for Labour. The default setting of the Conservatives now is to respond to virtually any problem by increasing taxes and spending even more money. The appetite and ability of the government to lower taxation or reduce the regulatory burden on businesses is approximately zero. The consequence will be a prolonged cost of living crisis and woefully disappointing economic growth.

Rishi Sunak is taking part in a live Q&A with Martin Lewis, the consumer champion and founder of the MoneySavingExpert website. You can watch it here.

Green party condemns decision to exempt renewables from new investment allowance for energy companies

The investment allowance announced by Rishi Sunak today, which will allow energy companies to get a total of 91p of their tax bill for every £1 they invest in the UK and which has been introduced to partially offset the impact of the windfall tax, will only not apply to investment in renewable energy, the government has confirmed. It will only apply to investment in oil and gas. Joanna Penn, a government whip in the House of Lords, confirmed this when she was taking questions on the plans, in response to a question from the Green peer Natalie Bennett. Bennett says it is unbelievable.

Unbelievably, #Government have confirmed that oil and gas companies can largely avoid the windfall tax by re-investing their profits.

And there will be no tax relief for investment in renewables!

You read correctly. NO TAX RELIEF FOR INVESTMENT IN RENEWABLES 🤯#WindfallTax pic.twitter.com/M4CEjp95MI

— Natalie Bennett (@natalieben) May 26, 2022

Sunak says his cost of living support package not announced as distraction from Partygate

On a visit to a B&Q in Watford, Rishi Sunak rejected claims that his cost of living support package was announced today as a distraction from Partygate. When asked if it was, he replied:

I’m focused on delivering for people and that is what today was about.

And the timing of today is because we now have more clarity about what is going to happen to energy bills in the autumn.

We heard from Ofgem earlier this week about the potential scale of the increase.

And that is why we took decisive action to provide £15bn worth of support to help the country get through the challenging months ahead.

Sunak also said he respected the police decision to fine him for attending a surprise birthday event for Boris Johnson in the cabinet room during lockdown. Sunak was there inadvertently, because he had arrived for a separate meeting. Commenting on it today, Sunak said:

With regard to my situation, I fully respect the decision that the police came to. And I sincerely and deeply apologise for the hurt and anger that caused.

Sir Jeffrey Donaldson (right), the DUP leader, speaking to the media at Stormont today, with a picture of one of his predecessors, Ian Paisley, in the background. Photograph: Brian Lawless/PA
Libby Brooks

Libby Brooks

There were get well wishes at first minister’s questions in Holyrood earlier as Nicola Sturgeon missed the session after testing positive for Covid last Friday.

Nearly a week on, Sturgeon says she has been “floored” by the virus and is planning to spend the rest of the week at home to recover.

Her absence comes in the week that Sturgeon became the longest serving first minister of the Scottish parliament after 2,743 days in office, overtaking her predecessor Alex Salmond’s day tally on Wednesday.

While there has been much analysis of her time in power as Scotland’s first female FM – covering the SNP’s steller electoral record, Brexit, the Salmond case and inquiry, and of course the pandemic – Sturgeon’s voice has been conspicuously absent.

It’s worth noting how seldom Sturgeon has taken time off, full stop, over the period. Particularly during the early months of Covid, her work ethic made the Stakhanovites look like part-timers.

What thinktanks are saying about Sunak’s cost of living support package

Here is reaction to Rishi Sunak’s cost of living support package from two thinktanks seen as being on the left.

From Torsten Bell, chief executive of the Resolution Foundation

The chancellor has announced a big and very welcome package of support for households facing fast rising energy bills. It almost doubles the level of energy support to over £30bn, and fills the huge gap in previous announcements with large targeted support for those hit hardest.

The decision to provide one-off payments this year to poorer households, pensioners and those with a disability is a good attempt to target those with higher energy bills – although the relative lack of support for larger families stands out.

The chancellor’s commitment to uprate benefits next April in line with very high inflation also offers important security for lower income households that their living standards will be protected from surging prices tomorrow as well as today.

From Miriam Brett, director of research and advocacy at Common Wealth

The biggest threat facing our future is the climate emergency and key to the transition is the need to create a green and just tax system. The UK is already an enormously profitable place for oil and gas companies. Today’s announcement by the Chancellor on the investment allowance to encourage firms to invest in oil and gas extraction in the UK casts fresh doubt on the UK government’s willingness to tackle the climate and environmental crises.

Research by Common Wealth and NEF found that despite its climate commitments, the UK continues to offer a number of tax reliefs for both domestic production and consumption of fossil fuels. In the last five years, the value of UK support to fossil fuels amounted to an average of approximately £12bn a year. A rapid and just phase out of fossil fuel subsidies should be a core component of a just transition.

And here is reaction from two thinktanks on the right.

From James Heywood, head of welfare and opportunity at the Centre for Policy Studies

This is a significant package of support targeted at those on the lowest incomes, and it will bring welcome relief to many families facing eye-watering increases in their bills. The Chancellor is right to use the means-tested benefits system to ensure cash goes to those who need it most, as we have been advocating for at the CPS. It is important to emphasise that these measures are pain relief, not a complete anaesthetic. The government cannot completely offset the impact of rising prices for every household – many still face an incredibly tough year ahead.

The reference in this quote to “pain relief” is a reminder than in the Sunday Times at the weekend Tim Shipman said Boris Johnson was willing to back Sunak’s plans for a windfall tax, but only if some of the money was spent on nuclear power stations and offshore windfarms, that would cut energy bills in the long run. Shipman quoted an adviser arguing that spending on “surgery” was ultimately more beneficial than spending on “pain relief”. If Shipman was right, today’s announcement shows that Johnson lost the argument.

From Mark Littlewood, director general at the Institute of Economic Affairs

The worst way to make policy is to oppose something half-heartedly in principle, then procrastinate and finally change position as a result of political expediency. It is painfully obvious that in the battle of ideas, the government enters the arena wholly unarmed.

Rachel Reeves, the Shadow Chancellor, is right to say that this represents a policy victory for Labour. The default setting of the Conservatives now is to respond to virtually any problem by increasing taxes and spending even more money. The appetite and ability of the government to lower taxation or reduce the regulatory burden on businesses is approximately zero. The consequence will be a prolonged cost of living crisis and woefully disappointing economic growth.

Tory MP Stephen Hammond reveals he submitted letter calling for no confidence vote in ‘indefensible’ PM some time ago

Another Conservative MP, Stephen Hammond, has come out to declare that they can no longer support Boris Johnson. Hammond has been very critical of Johnson in the past over Partygate, but until now he has not publicly joined those calling for a no confidence vote.

Today, however, he suggests that Johnson is “indefensible” and he implies that he submitted a letter to the 1922 Committee calling for a vote on Johnson’s leadership some time ago. In a statement he says:

I have said consistently throughout I cannot and will not defend the indefensible. I am struck by a number of my colleagues who were really concerned that it’s almost impossible for the PM to say I want to move on, as we cannot move on without regaining public trust and I am not sure that’s possible in the current situation …

Since 9 December I have been critical of the prime minister’s behaviour and the culture that existed in No 10. All I can do as a backbencher is speak out and submit a letter. I guide everyone to my website statements where I have said for several months I already have done all I can as a backbencher.

Tom Larkin from Sky News, who is keeping a tally, says 19 Tories are now on the record calling for a no confidence vote. The true number is thought to be more than double that, because MPs can submit letters in secret. If 54 letters are submitted, the 1922 Committee has to hold a ballot.

Cleaners and security guards to protest outside No 10 over abusive treatment of staff

Emine Sinmaz

Cleaners and security guards contracted to work for the Ministry of Justice will protest outside Downing Street tomorrow following reports that support staff were mocked and left to mop up after lockdown parties.

Sue Gray’s report into the Partygate scandal revealed that cleaners and security guards were subjected to a “lack of respect and poor treatment”, and yet felt “unable to raise [this] properly” with the authorities.

The Public and Commercial Services (PCS) union, which represents outsourced cleaners at the MoJ, said its members will protest against the government’s “culture of disrespect” at 5.30pm tomorrow.

Emanuel Gomes, one of its members, died in April 2020 just hours after cleaning an office in the MoJ. Originally from Guinea, the 43-year-old father and husband felt so ill he could barely stand but felt under pressure to continue working during lockdown because he did not receive sick pay, his family said. He had suspected coronavirus symptoms but his death was officially recorded as hypertension of the heart.

Vicente Gomes, a cleaner at the MoJ and a member of the UVW union, said:

Emanuel and I were from the same country, he was a good person. During the pandemic, while we didn’t have masks and we were on poverty wages, the prime minister broke the law. This is very wrong, this is not normal, he knows the law.

Emanuel Gomes’s cousin, Vicente Mendes, who is also a cleaner at the MoJ and a UVW member, said:

Emanuel didn’t receive sick pay and he died without receiving anything. It can’t be like this, I feel very sad.

Petros Elia, general secretary for UVW, added:

It is outrageous to have rowdy and illegal parties during the pandemic but to then expect cleaners to mop up after you and to pay them, as well as porters and security guards, poverty wages, and deny them full sick pay is abhorrent.

Sunak engaged in ‘serious redistribution from rich to poor’, says IFS

The Institute for Fiscal Studies has released a full analysis of the cost of living support measures announced by Rishi Sunak earlier. It says Sunak is involved in “serious redistribution from rich to poor”. This is from Paul Johnson, the IFS’s director.

Rishi Sunak has announced a genuinely big package of support for households. On average the poorest households will now be approximately compensated for the rising cost of living this year. The flat rate nature of payments to benefit recipients does mean, though, that the package is less generous to poor families with children than to those without. Even so, put these benefit increases alongside the tax rises just implemented, and Mr Sunak is engaging in some serious redistribution from rich to poor – albeit against a backdrop of rising inequality.

While this is coming at substantial fiscal cost, its supposedly temporary nature means he might not be too worried about the impact on the public finances. We will wait to see how the Bank of England responds to a big fiscal loosening in a period of high and rising inflation. If energy prices remain high, or rise even further, it may turn out hard to ensure these changes are genuinely temporary. And there are inevitably going to be families on modest incomes, who are just out of reach of the means tested benefit system, who will feel hard done by relative to the generous treatment of those families not so different from them who are receiving benefits.

The IFS also says that, as a result of the measures announced today, a worker on median earnings will have very little reduction in real-terms income this year compared with last year. Without any of the measures announced by Sunak this year, they would have faced a loss of more than £500. People working full-time on the “national living wage” will actually see an increase in their real-terms income, the IFS says.

IFS analysis of impact of Sunak’s measures on real take-home income
IFS analysis of impact of Sunak’s measures on real take-home income Photograph: IFS

In the Commons MPs have this afternoon been paying tribute to the Queen, to mark her platinum jubilee. Boris Johnson opened the debate, and like other MPs he praised her lavishly. It would, of course, be far more interesting to hear what the Queen has to say about Johnson, but sadly that option is not available, and so here is an excerpt from Johnson’s speech.

Since the Palace of Westminster was founded more than 1,000 years ago, it has seen war and peace, plague and plenty, the rise and fall of empires and all kinds of revolutions: scientific, industrial, political, ecumenical, stylistic.

And almost 50 monarchs – in trying to rank the achievements of those monarchs it must be admitted that not all of them set exemplary standards of personal behaviour and quite a few were removed violently and prematurely from office.

But in our history, no monarch has ever served this country so long as this one with the first platinum jubilee ever but far more importantly, no monarch has ever served it so well.

Met had to issue Partygate fines on basis of law, not just photos that ‘look bad’, says acting commissioner

In his evidence to the London assembly’s police and crime committee, Sir Stephen House, the acting Metropolitan police commissioner, dismissed suggestions that his force was soft on Boris Johnson when investigating Partygate. He also insisted that, just because a photograph “looks bad”, that does not mean a fine is justified. He explained:

I accept that many of the photographs that we are seeing look bad and Sue Gray’s report has dealt with that.

We deal with the law, not what looks bad. And just because there is alcohol present, can I just remind people that the Covid regulations are about breaching Covid regulations, they’re not about whether there’s drink there or not.

We have to put fixed-penalty notices to people that we think will win in court. And there has to be evidence behind it and there is not always evidence and … a photograph can be somewhat deceptive in these areas.

We need evidence and they need to be proving there is no reasonable excuse behind what was going on.

We have not, I repeat this, we have not shied away from issuing a fixed-penalty notice where we thought it was deserved.

We have policed without fear or favour and I would not have presided over anything less than that.

The Lib Dems say that under their plans a windfall tax on the energy sector would have raised £11bn, not the £5bn that Rishi Sunak expects his to raise. Christine Jardine, the Lib Dem Treasury spokesperson, said:

This is more a levy lite than a windfall tax. The chancellor could have raised double the cash from oil and gas companies if he had the bottle.

The Lib Dems want to impose a 25% windfall tax on the excess global profits of oil and gas producers headquartered in the UK. Sunak’s tax is a 25% tax on UK oil and gas profits, but the investment allowance will enable firms to cut their liabilities if they are investing in the UK.





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