Rishi Sunak's 'Winter Plan' to Deal with Inflation and the Cost of Living Emergency
- Scrapping VAT on domestic energy bills for the next year
- Tightening the rules on out-of-work benefits to get more people off welfare and into work
- Reducing reliance on French ports to tackle the supply chain crunch
Rishi Sunak has today announced his plan to tackle the inflation and cost of living emergency.
With the energy price cap now expected to rise above £3,000 this winter, the centrepiece of Rishi’s plan is a targeted, temporary and timely tax cut which will help hard working families this winter if, as expected, the price cap rises to over £3,000.
- Making the most of our Brexit freedoms, Rishi Sunak will scrap VAT on all domestic energy bills for the next year, saving the average household £160.
- As the cut will lower energy costs, it will bear down on price pressures.
- This support comes on top of the £400 Rishi Sunak cut off everyone’s energy bill, with £1,200 of support for the most vulnerable 30% of families.
The move will bear down on prices and help working families with rising energy bills. It stands in contrast to £55 billion of fiscal commitments Liz Truss has made, which will stoke inflation, and increase interest rates and government borrowing.
Rishi would also undertake major supply side reforms targeted at bringing down costs:
- He will expand the labour force by tightening up the rules on out-of-work benefits. He will double the number of hours someone on welfare has to work a week in order to avoid having to look for a full time job and explore other measures to get people off welfare and into work. And he will look at new incentives to support inactive older workers to return to the labour market.
- He will also get our supply chains working properly by reducing our dependence on French ports. He will work with Britain’s biggest importers to build up trade with Dutch and Danish ports, ending the disruption that is causing shortages that lead to price increases.
Rishi Sunak said:
"Tackling inflation and getting people the support they need to help with the cost of living is critical.
"That’s why, with the price cap expected to rise above £3,000 in October, I will move immediately to scrap VAT on everyone’s domestic energy bills for the next year, saving the average household £160.
"This temporary and targeted tax cut will get people the support they need whilst also – critically – bearing down on price pressures.
"As Chancellor I knocked £400 off everyone’s energy bill and provided support of £1,200 for the most vulnerable households. This additional VAT cut will help deal with the current emergency.
"I will also begin undertaking major supply side reforms targeted at the rising cost pressures families are facing. That means urgently getting more people off welfare and into work and tackling the supply chain crunch."
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