Gordon Brown calls for emergency budget as Truss and Sunak bicker over cost of living aid
FORMER Prime Minister Gordon Brown has called on the UK government to come up with an emergency budget before a ‘financial ticking time bomb’ in October plunges millions into poverty.
After a new report commissioned by Brown suggested government aid has failed to meet household needs, he said the Prime Minister, Rishi Sunak and Liz Truss must agree to emergency measures “this week “.
It comes as Truss has pledged to cut taxes immediately to tackle the cost of living crisis if she becomes prime minister, which rival Sunak says will fuel inflation.
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The two candidates vying to replace Boris Johnson as Prime Minister continue to clash over their plans to help households cope with spiraling bills after the Bank of England warned the UK would fall in the longest recession since the financial crisis, with inflation expected to climb to more than 13%.
And, both have faced calls from former Prime Minister Brown to act and put emergency measures in place.
Writing in The Observer, he said: “A financial time bomb will explode for families in October as a second fuel price hike in six months sends shockwaves through every household and pushes millions on the edge of the abyss.
“A few months ago, Jonathan Bradshaw and Antonia Keung of York University estimated that the 54% increase in fuel prices in April would lock 27 million people in 10 million households into fuel poverty.
“Now 35 million people in 13 million households – an unprecedented figure of 49.6% of the UK’s population – are at risk of energy poverty in October.”
Brown said that if an agreement was not drafted by Johnson, Sunak and Truss, “Parliament should be called back to force them to do it”.
The new report, by Professor Donald Hirsch of Loughborough University, found that support for low-income households has failed to offset the losses they face amid the cost of living crisis , with some families up to £1600 less a year. .
The extra £1,200 offered to society’s poorest this year will fail to offset three major hits to their incomes from October 2021 to October 2022, the analysis suggests.
The loss of the £20-a-week benefit increase, an annual increase not in line with inflation forecasts and a jump in the energy cap will mean the worst-off families will not be able to close the gap.
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This is because the lump sum payments offered by the government do not take into account the different sizes and needs of different households, he says.
A government spokesperson said: ‘We understand people are struggling with rising prices, which is why we have acted to protect Britain’s eight million most vulnerable families with at least £1,200 of direct payments this year, with additional support for retirees and those claiming disability benefits.
“Through our £37billion support package, we are also saving the typical employee more than £330 a year through a tax cut in July, allowing people on Universal Credit to keeping £1,000 more of what they earn and cutting fuel tax by 5p, saving a typical family £100. »
The report comes amid growing calls for the new prime minister to urgently increase the amount of aid available to the most vulnerable families, with Truss continuing to focus on lowering taxes.
She wrote in The Sunday Telegraph: “Despite the Bank of England’s harsh assessment this week, I do not believe that our great country should be left in a controlled decline or accept the inevitability of a recession.
“I would start running bringing in an emergency budget, charting a firm course to grow our economy to help fund our public services and the NHS.
“I would use this to immediately tackle the cost of living crisis by cutting taxes, reversing the National Insurance hike and suspending the green tax on energy bills.”
Earlier, the Foreign Secretary insisted that tax cuts, not “handouts”, would help families with skyrocketing fuel bills this winter.
Sunak hit back at his comments saying, “It’s just plain wrong to rule out additional direct support at this time like Liz Truss has done, and furthermore, her tax proposals won’t help people very significantly. like retirees or people on low incomes, which are exactly the kind of families that are going to need help.
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Trade Secretary Penny Mordaunt, who supports Truss, denied that the Foreign Secretary ruled out the extension of direct payments to people claiming it was a “misrepresentation”.
She told Sky News: “What she’s looking at is allowing people to keep more of the money they earn.
“It makes no sense to take money from people and then give it back in a very, very complicated way.
“We need to simplify this and we need to make sure that households are as resilient as possible and stopping levying large sums of personal tax is one way of doing that.”
Tory MP Damian Hinds acknowledged that the support package Mr Sunak had drawn up as Chancellor was not enough in these “extraordinarily difficult times”, and suggested more would come if he became Prime Minister.
The Sunak supporter told Sky News: ‘Things have gotten worse even since this has been put in place in terms of projections for energy bills going forward and it has been clear that more may well be needed and he is ready to do that if needed.