Prime minister Boris Johnson has said that the government could do more to help British families through the cost-of-living crisis but stressed that further assistance would likely come in the “medium to long-term”.
Johnson justified his take by warning that inflation could be exacerbated if the government were to do more now to help those struggling with soaring fuel and energy prices.
Despite admitting during an interview with the Good Morning Britain programme that the government’s package of measures so far “isn’t going to be enough immediately to help cover everybody's costs” and would not “work enough in the short-term,” Johnson said: “There is more that we can do but the crucial thing...is to deal with the prices over the medium to long-term.”
The PM continued: “We have a short-term hit caused by the spike in energy prices across the world. If we respond by driving up prices and costs across the board across the board in this country, responding by the government stepping in and driving up inflation, that will hit everybody.
“And that will mean that people's interest rates on their mortgages go up, the cost of borrowing goes up, and we face an even worse problem.”
Rising fuel and energy prices, alongside hikes in the cost of food, have seen inflation hit a 30-year high of seven per cent, which is expected to increase further before the end of 2022.
The action that the government has already taken includes making adjustments to the National Insurance payments threshold to alleviate tax burdens for many, alongside a council tax rebate and energy bills relief.
However, with political parties at heads over the ongoing cost-of-living crisis ahead of local elections across the UK this week, the government is facing more calls to take further action now.
Indeed, charities have warned that although the government’s 3.1 per cent increase to the state pension and benefit rises have now come into effect, they are being outpaced by inflation meaning that any positive impact is unlikely to be felt.
Meanwhile, Labour and the Liberal Democrats have been reiterating calls for a windfall tax to be imposed on oil and gas firms to subsidise household energy bills, after BP announced that it had more than doubled its profits for the first quarter of the year.
Lib Dem leader Sir Ed Davey said that it was “impossible to justify” not imposing a tax on energy companies in the wake of rising profits, but the prime minister explained that he was cautious about doing so for fear limiting the opportunities for private investment into renewables.
However, Labour leader Sir Keir Starmer has dismissed the notion that a windfall tax could discourage investment by private energy firms, saying that the tax measure would come as a year-long one and target profits that “they didn’t expect to make”.
Image taken from Wikimedia Commons
.jpg){kind=link}