Sunak to unveil £500m grants to ease cost of living for UK’s poorest
Rishi Sunak is set to announce £500m in grants to help the country’s poorest during the current cost of living crisis the UK is facing.
The chancellor is expected to announce in his Tory party conference speech next week that it will be put in place to help households cope with costs over what is expected to be a tough winter.
Surging energy prices, higher than predicted inflation and a £20-a-week cut to the Universal Credit uplift will culminate in more household’s facing poverty, according to campaigners and some think tanks.
The furlough scheme is also set to end this week, which will plunge many into unemployment.
Bloomberg reports that the £500m in grants will be distributed by local authorities and replace the Covid-19 local support grant scheme.
The Treasury declined to comment on the policy.
The new grants proposal was praised by think tanks on both the right and the left.
Julian Jessop, economics fellow at the free market Institute for Economic Affairs think tank, said: “Relative prices need to be allowed to adjust to balance supply and demand and direct government intervention in markets usually backfires. But it still makes sense to protect the most vulnerable households from rising energy and food bills, and targeted grants are a good way to do this.”
Mike Brewer, chief economist at the progressive Resolution Foundation think tank, said: “This new Household Support Fund, which follows on from two similar support schemes announced during the pandemic, should provide vital support for low-income families who are really struggling with Britain’s ongoing cost of living crisis, and who are able to access the scheme.
“But while welcome, these grants won’t come close to covering the far wider £20 a week losses that will result from cutting Universal Credit, and which will affect over four million families across the country.”
Labour and a growing number of Tory MPs have called for the government to do more to alleviate pressures of the country’s poorest.
Conservative MPs Robert Halfon and Christopher Chope have called for VAT to be slashed on energy bills to offset to the soon to be implemented increase in the energy price cap.
Labour is calling for the Universal Credit cut, which will decrease yearly benefits by £1,000, to be reversed.
Speaking at Labour party conference, shadow work and pensions secretary Jonathan Reynolds said: “This is the biggest cut to the welfare state ever.
“One in 14 workers will lose out at a time when every other bill is going up. The very key workers who got us through this crisis left struggling.”