LONDON (Parliament Politics Magazine) – The chancellor should use this Spring Statement of this week to do more to aid poorer households, according to a top debt charity.
Rishi Sunak is being urged by StepChange to enhance welfare payouts and provide more assistance with energy bills.
Many more people will fall into “problem debt” if this does not happen, according to the charity.
Mr Sunak told the BBC that he is unable to completely safeguard people from the effects of rising costs.
To match the rate at which costs are rising, the debt charity wants the government to consider boosting benefits by at least 7% in April.
It wants additional money for local governments to help people through vouchers, grants, and other discretionary payments to cover necessary bills.
StepChange also wants the Warm Home Discount to be expanded, and energy providers to stop attempting to collect debt from families who can’t afford to pay their bills.
It comes after the charity announced the findings of a poll, which found that one in every five people believes they would be in debt this year and will be unable to repay it.
In a YouGov study of 1,676 adults for StepChange, 42% said they expect to struggle paying council tax and rising energy bills in the coming months.
The debt charity’s modelling also indicated that if energy prices reach £3,000 per year, as the industry has predicted, the most financially vulnerable households will be spending £1 in every £6 they earn on energy costs.
StepChange’s campaign is the latest in a long line of demands on the government to do more when the chancellor delivers his Spring Statement this week. The chancellor is anticipated to give an update on the economy’s overall health on Wednesday, but the Spring Statement typically does not involve major changes to tax or spending policy.
“I wish the government could fix exactly every problem and that I could fully protect people against all the challenges that lie ahead,” Rishi Sunak told the BBC’s Sunday Morning programme.
“I can’t do that,” he says, “but I will stand by them in the same way I have for the previous couple of years.”
Next month on, when the government’s price cap is expected to climb, millions of households will suffer significant increases in their energy costs.
With the increased cap, ordinary households will pay £1,971 per year starting in April, a 54 percent increase over what they pay today, with another increase due in October.
Diesel and petrol prices have also risen in recent weeks, exacerbated by an increase in oil costs as a result of Ukraine’s invasion by Russia.
More than 50 Conservative MPs have called for a reduction in fuel duty in order to lower the cost of diesel and petrol.
“I believe household incomes are entering a storm, and they will be pummelling from all sides, food, energy interest rates rising and so there is a role from the Treasury now to try to smooth the effect of this shock,” former housing minister Robert Jenrick said.
