It was reported today that Rishi Sunak will announce a significant increase in the national living wage as well as provide cost of living allowances worth up to £1,100 to eight million households.
The triple lock on pensions will be maintained as part of Thursday’s Budget, and the Prime Minister has indicated that he will give support for the poorest people priority.
According to The Times, Mr. Sunak and Chancellor Jeremy Hunt intend to raise the living wage from £9.50 an hour to around £10.40 an hour, or more, lifting earnings for 2.5 million people.
Along with offering up to three additional financial boosts for some families, the PM is now anticipated to improve benefits like universal credit and provide a cost of living payment of £650, £150 for the disabled, and £300 for some of the poorest retirees. It implies that some homes would receive $1,100 in payments this winter.
These subsidies will be an extension of those many households have already received since September to help with the burden of rising food and energy prices.
The Prime Minister stated that retirees will “always be at the forefront of my mind” and that he “understands the special challenge of pensioners” at the G20 summit in Bali.
The triple lock, which was implemented in 2010, ensures that the state pension will increase in accordance with inflation, wages, or 2.5%, whichever is higher.
With inflation hovering at 10%, the Treasury could instead save about £4.5 billion annually by raising pensions to the current level of 5.5%.
Mr. Sunak, who is in attendance at the G20 conference, was asked if he would drop the triple lock. He responded, “My track record as Chancellor indicates I care very much about pensioners.”
A financial statement is days away, therefore I’m unable to comment on any decisions. But in all of our decisions, we will prioritize fairness and compassion.
I’m sure people will notice that on Thursday.
Given that many seniors support the Conservative Party, senior Conservatives have cautioned that ditching the triple lock would be perceived by retirees as a betrayal and might constitute “political death.”
The protection would remain in place for the length of current Parliament, according to the 2019 Tory platform.
Due to an unexpected increase in average salaries brought on by the lifting of the lockdown during the Covid-19 pandemic, which resulted in pensioners receiving an increase of just 3.1%, Mr. Sunak stopped it this year.
Separately, the prime minister has made it clear that he would abandon the goal of allocating 3% of GDP to defense spending by 2030.
When asked twice yesterday if he would keep the target, he declined to say yes, claiming that Britain’s international image for defense spending was already “very, very robust.”
Despite the conflict in Ukraine and the growing danger posed by China, he also seemed to dispute the premise that the defense budget should increase in step with inflation.
It entails a real terms spending reduction, which causes some Conservative MPs to worry that soldiers will be underpaid and the Conservatives may lose their status as the party of defense.
In cash terms, it is anticipated that the defense budget will increase from £47.9 billion this year to £48.3 billion in 2023 and £48.6 billion in 2024.
The budget is being eroded by inflation, which may even force the Tories to break their election promise to ‘raise the budget by at least 0.5% above inflation every year of the new Parliament.
However, due to new Government policies, council tax is expected to increase to over £2,000 for the first time ever, leaving millions of families in yet another financial bind.
In light of predictions that hundreds of local councils may fail, Rishi Sunak and his chancellor Jeremy Hunt are prepared to relax the rise cap that has been in place for ten years.
As a result of the new plans to allow town halls to contribute to the cost of social care, households will see an average monthly council tax increase of £100.
According to the Telegraph, homeowners in the highest Band H could potentially pay up to £200 more when their costs exceed £4,000.
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Currently, increases of more over 2% are prohibited unless they receive support in a local vote. To pay for social care, town halls have just been permitted to levy an additional 1%, for a total of 3%.
However, a government source claimed that ministers planned to loosen the restrictions the next year and permit councils to raise taxes by a maximum of 5%. According to the source, allowing town halls more “freedom” in their fundraising efforts would lessen the need for increased government support.
Councils are under pressure to provide social care, and the source claimed that the social care tax, which would have generated funding to assist, was eliminated. Therefore, when councils can make the case for it locally, there is a rationale for giving them additional flexibility.
But nobody is talking about going back to the kinds of raises we saw under Labour; we would still be talking about increases below inflation. An average Band D charge of £1,966 would increase by 5% the next year, adding £98 to the expense.
Mr. Hunt will probably make the announcement during the Budget on Thursday. However, Whitehall sources claimed that disagreements over the precise amount of flexibility to permit persisted within the Government.
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