Cost of living crisis: Sunak’s immediate support is a ‘moral imperative’ – CBI | Cost of living crisis
Pressure on the government to help those hardest hit by Britain’s cost of living crisis has intensified after the leader of one of the country’s major employers’ groups said a immediate support was a “moral imperative”.
CBI chief executive Tony Danker said Rishi Sunak should step in to help households who are skipping meals due to rising food and fuel bills.
Wednesday’s figures are expected to show the annual inflation rate over 9%, and Danker said it was “unacceptable” that people were faced with the choice of whether to heat their homes or eat.
Sunak pledged to provide more support to those affected by the latest energy price spike triggered by Russia’s invasion of Ukraine, and Danker called on the Chancellor not to wait until the fall before d ‘to act.
While urging caution about complying with demands from some Tory MPs for a summer mini-budget to cut taxes, the CBI chief said Sunak should act on two fronts at once.
“The first is to help people facing real difficulties today; it is the moral foundation of our economy and our society,” Danker said. “Recent surveys suggest that more than one in 10 households skipped – or ate smaller meals – in the past month due to a lack of price, while around half a million more households are expected to do so. faced with choices between heating and eating. We must not delay putting pounds in the pockets of the people most in difficulty.
“Second, start boosting business investment now – we’ll need to make sure there’s economic growth in the pipeline to avoid any downturn in our economy that could deepen or prolong the cost of living crisis.”
Danker said many people running UK businesses had never experienced the current combination of high inflation and low growth, adding that confidence in boardrooms and among investors had been hit.
Danker called for a five-point plan to boost investment: supporting business cash flow; a commitment to green growth; establish an infrastructure roadmap; ensure that the funds already announced are injected into the economy; and unlock digital investments.
“The Chancellor’s clear intention to use an upcoming budget to reduce taxes on business investment should become a firm commitment now,” he said. “This will ensure that any company that halts its investments now will be bold, decisive and supportive of its initial plans. This is important for everyone as it ensures that any downturn in growth will have a short and shallow shelf life. .
Danker was more cautious about backing a full-fledged mini-budget, fearing that a large stimulus package could further fuel inflationary pressures.
“We need to avoid large injections into economic demand that could worsen inflation, and focus on the movement of the supply side of our economy. Big economic boosters should therefore be postponed until it is safe to do so. The government must remain flexible and support the economy in the right way at the right time.
The CBI opposes funding a support program through a windfall tax on North Sea energy companies, but would back Sunak if he decides to target poorer households through a one-time payment or an increase in Universal Credit.
Energy bills for an average household rose by nearly £700 to just under £2,000 a year in April, and the Bank of England expects a further rise of £800 a year in october.