Tackling the cost of living crisis
Today, the Prime Minister will reassure families and businesses that halving inflation this year remains his number one priority, whilst continuing to provide targeted support to alleviate cost of living pressures.
- Inflation is the most invidious tax rise the British people are facing. Whist we are making progress on our target, there is much work to do to squeeze inflation out of our economy.
- That is why today the Prime Minister will reiterate his commitment to halve inflation this year at a PM connect event. We will achieve this by supporting the Bank of England, taking a responsible approach to public finances, and easing pressures on the economy by securing our energy supply and getting more people back into work. Labour would fuel inflation with their disastrous plan to scrap new North Sea oil and gas.
- We are sticking with our plan to squeeze every last drop of high inflation out of our economy and reduce cost of living pressures for the British people.
Economies around the world are facing high inflation driven by Putin’s illegal war, higher energy prices and economies bouncing back from the pandemic. Central banks around the world are raising interest rates to address this, creating a double whammy as homeowners with mortgages and businesses are hurt both by rising prices and by interest rates.
We know how much this high inflation hurts families and business across the country.
That is why we will halve inflation by the end of the year and are taking action to protect families by providing £3,300 on average per household to help with rising costs. The ONS confirmed this morning that inflation remained at 8.7 per cent, still lower than the 10.1 per cent at the start of the year – showing we are making progress towards our target, but we know there is much more work to do.
We will not hesitate in our resolve to support the Bank of England as it seeks to squeeze inflation out of our economy, while also providing targeted support with the cost of living in the meantime. In total the government is spending £94 billion to help households through this crisis.
We are helping families with the cost of living by:
- Addressing inflation head on with a £94 billion package of support, on average providing £3,300 per household. New figures show we are making progress in reducing the rate of inflation, down from 10.1 per cent at the start of the year. Whilst we work on this promise, we have a £94 billion package of cost of living support in place, worth £3,300 on average per household.
- Paying half of people’s energy bills this winter, funded by a levy on the extraordinary profits made by energy companies. Recongising the extraordinary cost of energy because of Putin’s war we stepped in with £40 billion of support for families and business’s energy bills. Without this support family energy bills would have been almost £4,300 per year and inflation higher. The energy regulator, Ofgem, has confirmed a reduction in wholesale gas prices now mean energy bills are set to fall by £426 a year.
- Supporting low-income households, pensioners and people who claim disability benefits with additional payments, with some households receiving up to £1,350 of support. Building on the £1,200 of support received in 2022, millions of households will get up to £1,350 of government support in 2023-24: £900 for households on means-tested benefits being paid from April; £300 for pensioner households and £150 for disability benefit claimants.
- Extending our Household Support Fund to over £2 billion, ensuring local authorities can support the most vulnerable families in their communities. We have provided the Household Support Fund with an additional £842 million to establish schemes that support vulnerable families. This brings the Fund to over £2 billion in value since its creation.
We are ensuring more people have the security of a good job by:
- Increasing the National Living Wage by 9.7 per cent to £10.42, increasing the wage of two million low paid workers by £1,600 a year. On 1 April 2023, the National Living Wage increased by 9.7 per cent to £10.42 an hour for workers aged 23 and over. This represents an increase of over £1,600 to the annual earnings of a full-time worker on the NLW and is expected to benefit over two million low paid workers.
- Helping businesses to get one million more people in work since before the pandemic, ensuring more people have the security of their own income and are helping to grow the economy. There are 33.09 million people in work in the UK, up 382,000 over the last year and up by four million since 2010 and the employment rate is near record highs at 76 per cent. There are 30 million payrolled employees in the UK, up 1.01 million on pre-pandemic levels