The high inflation we are experiencing now is causing acute distress - I know people are worried and they are struggling.
No government can solve every problem, particularly the complex and global challenge of inflation. But this UK Government will never stop trying to help people, to fix problems where we can, to do what is right – as we did throughout the pandemic.
We need to make sure that for those whom the struggle is too hard, and for whom the risks are too great, they are supported. This government will not sit idly by whilst there is a risk that some in our country might be set so far back they might never recover.
I very much welcome last week's announcement by the Chancellor of an additional £15 billion package to support households with the rising cost of living. The measures will see the most vulnerable households in the UK receive an additional £1,200 – comparable to the average energy bill increase over the course of this year.
The new measures announced include:
- A £650 cost of living payment for every household on means-tested benefits – over 8 million UK households will be directly sent a one-off cash payment, paid out by the DWP in two separate instalments in July and Autumn this year.
- A £300 pensioner cost of living payment for every pensioner household in receipt of Winter Fuel Payment, on top of the WFP which had already been increased to £300.
- A £150 disability cost of living payment for those in receipt of disability benefits.
- Supporting hard-work families by doubling the October £200 rebate to £400 and turning it into a cash grant – cancelling the existing clawback mechanism.
- Additional funding to the Welsh Government through the Barnett Formula, to support Household Support Fund payments within Wales through local councils.
This package is in addition to previously announced measures to help with the cost of living, and equates to £1,200 of support for those on the lowest incomes (around one-third of UK households), £850 for pensioners, and £550 for hard-working families.
The new measures will be funded through a targeted and temporary Energy Profits Levy on the profits of oil and gas companies, which will raise £5 billion over the next twelve months. There will also be significant investment incentives built-in to the Levy to ensure new investment is not deterred.
This is on top of the action we've already taken:
- Cutting your taxes - earn up to £12,570 from July and pay no income tax or National Insurance.
- Cutting fuel duty - saving drivers £100 on average.
- Increasing the Living Wage - a boost of £1,000 per year.
The best way to help families is to deliver on our plan to grow the economy and provide people with the opportunity of work.
The UK Government’s support for households now totals over £37 billion, equivalent to 1.6% of our GDP. The current challenges we all face are being felt around the world due to a series of global forces, and it is right that our absolute priority today is to help the millions of families across the UK who are struggling with the rising cost of living.