Cost of living help

I have been pressing for sometime for more help with the cost of living . I am pleased to report that the Chancellor has  now produced a better package of assistance with energy bills. I reproduce below the government’s published guidance to what is available:

“Millions of households across the UK are struggling to make their incomes stretch to cover the rising cost of living. That is why the government is providing over £15 billion in further support, targeted particularly on those with the greatest need. This package is in addition to the over £22 billion announced previously, with government support for the cost of living now totalling over £37 billion this year. This means that almost all of the eight million most vulnerable households will get £1,200 of one-off support in total this year to help with the cost of living, with all domestic electricity customers receiving at least £400.

Energy Bills Support Scheme doubled to a one-off £400:

  • Households will get £400 of support with their energy bills through an expansion of the Energy Bills Support Scheme.
  • As well as doubling the £200 of support announced earlier this year, the full £400 payment will now be made as a grant, which will not be recovered through higher bills in future years.
  • Energy suppliers will deliver this support to households with a domestic electricity meter over six months from October. Direct debit and credit customers will have the money credited to their account, while customers with pre-payment meters will have the money applied to their meter or paid via a voucher.
  • This support will apply directly for households in England, Scotland, and Wales. It is GB-wide and we will deliver equivalent support to people in Northern Ireland.
  • This support is in addition to the £150 Council Tax rebate for households in England in Council Tax bands A-D, which was announced in February, and which millions of households have already received.

£650 one-off Cost of Living Payment for those on means tested benefits:

  • More than 8 million households on means tested benefits will receive a payment of £650 this year, made in two instalments. This includes all households receiving the following benefits:Universal Credit
  • Income-based Jobseekers Allowance
  • Income-related Employment and Support Allowance
  • Income Support
  • Working Tax Credit
  • Child Tax Credit
  • Pension Credit
  • DWP will make the payment in two lump sums – the first from July, the second in the autumn. Payments from HMRC for those on tax credits only will follow shortly after each to avoid duplicate payments.
  • Claimants will need to be in receipt of one of these benefits, or have begun a claim which is later successful, as of 25th May 2022 to be eligible for the first of the two instalments. HMRC and DWP will provide further guidance, and the government will set out the eligibility date for the second instalment, in due course.
  • This payment will be tax-free, will not count towards the benefit cap, and will not have any impact on existing benefit awards.
  • The government will make these payments directly to households across the UK.
  • Legislation will be introduced shortly to allow payments to be made to this timetable.

One-off £300 Pensioner Cost of Living Payment

  • Pensioners are disproportionately impacted by higher energy costs, and many low-income pensioner households do not claim the means tested benefits they are entitled to.
  • So pensioner households will receive an extra £300 this year to help them cover the rising cost of energy this winter.
  • This additional one-off payment will go to the over 8 million pensioner households across the UK who receive the Winter Fuel Payment and will be paid on top of any other one-off support a pensioner household is entitled to, for example where they are on pension credit or receive disability benefits. Eligible households currently receive between £200 – £300, so the payment will represent at least double the support for this winter.
  • The Winter Fuel Payment (including the extra Pensioner Cost of Living Payment) is not taxable and does not affect eligibility for other benefits.
  • All pensioner households will get the one-off Pensioner Cost of Living Payment as a top-up to their annual Winter Fuel Payment in November/December. For most pensioner households, this will be paid by direct debit.
  • People will be eligible for this payment if they are over State Pension age (aged 66 or above) between 19 – 25 September 2022. There are certain circumstances where an individual above State Pension age does not qualify for the Winter Fuel Payment which can be found here on gov.uk [https://www.gov.uk/winter-fuel-payment/eligibility]
  • The government will make these payments directly to households across the UK.

£150 Disability Cost of Living Payment

  • Around six million people across the UK who receive the following disability benefits will receive a one-off payment of £150 in September:
    • Disability Living Allowance
    • Personal Independence Payment
    • Attendance Allowance
    • Scottish Disability Benefits
    • Armed Forces Independence Payment
    • Constant Attendance Allowance
    • War Pension Mobility Supplement
  • We know people with disabilities may face a wide range of additional costs, such as specialist equipment, specialist food, and increased transport costs, and this payment will help with these costs as they are likely to have increased. Claimants must be in receipt of, or have begun an eventually successful claim for, one of these benefits as of 25th May 2022 to be eligible for this additional payment.
  • For the many disability benefit recipients who receive means tested benefits, this £150 will come on top of the £650 they will receive separately.
  • These payments will be exempt from tax, will not count towards the benefit cap, and will not have any impact on existing benefit awards.
  • The government will make these payments directly to eligible people across the UK.

£500m increase and extension of Household Support Fund

  • To support people who need additional help, the Government is providing an extra £500 million of local support, via the Household Support Fund, which will be extended from this October to March 2023.
  • The Household Support Fund helps those in most need with payments towards the rising cost of food, energy, and water bills.
  • The government will issue additional guidance to Local Authorities to ensure support is targeted towards those most in need of support, including those not eligible for the Cost of Living Payments set out on 26 May 2022.
  • This brings the total amount provided through the Household Support Fund to £1.5 billion since October 2021.
  • The Household Support Fund is administered by local councils in England and further information will be available directly from them. Eligibility will be determined by individual councils.
  • The Barnett formula provides a share of this funding to the devolved administrations in Scotland, Wales, and Northern Ireland so they can decide how to provide support.

Impacts on households and case studies:

Around three-quarters of the total support will go to vulnerable households. Distributional analysis of the impact of these measures on households in England, published in May 2022, shows that the announced measures are highly progressive.

The following illustrative case-study households show the combined impact of recent policy decisions and changes in the labour market:

  1. A low-income household (combined gross annual earnings of £26k, including a full-time earner on £10/hour and a part time earner on the National Living Wage) with 2 children who are in receipt of means tested benefits should expect to receive additional government support of £3,200 this year. This includes £850 from today’s measures, £350 from the February package, £2,000 from the UC taper reduction.
  2. A low-income couple, both out of work, one of whom has a disability (combined net income of £13,900) will receive a total of £1,350 this year in additional support. This includes £1,000 from today’s measures, and £350 from the February support package.
  3. A low-income pensioner household will receive a total of £1,500 this year in additional support. This includes £1,150 from today’s announcement and £350 from the February support package.
  4. A single mother of two children who works full time on the National Living Wage will receive a total of £2,500 this year in additional support. This includes £850 from today’s measures, £350 from the February package, £1,200 from the UC taper reduction.
  5. A low-to-middle income working family on Universal Credit, with 2 children (combined gross annual earnings of £43k, including a fulltime earner on median hourly wage of £14.10/hour, or around £27,000 per year, and another full time earner on the National Living Wage) will receive £4,200 this year in additional support. This includes £850 from today’s measures, £350 from the February package, £240 from the NICs threshold increase, £2,900 from the UC taper reduction.

In addition, households in work will also benefit from wage increases. In March 2022, the OBR forecast average wage growth to be 5.1% this financial year. This would imply someone on median earnings (£27,000 per year) seeing a net wage increase of more than £900. Those on Universal Credit and state pension will also benefit from uprating of 3.1% in April 2022.”



People have been falling out of love with Jaguar

Recently I looked at the overall collapse of UK car making in Britain. Today I want to look at an iconic UK car brand which has experienced falling volumes for a while. Jaguar cars have been in retreat for some years. This April they saw sales 44% below a year earlier with just a 0.94% market share.  The brand still has a loyal fan base that like the history and traditions of the cars, with many owning older vehicles as reminders of past glories. It also has a growing list of former fans who will not buy a modern product, failing to see in some of the designs much  of the “Grace, pace, space” of the E type or of the Mark 2 saloon or the XJ, XK or S type of later years.

Jaguar’s sales and marketing strategy is partly to blame. Their dealers had a penchant for selling down, trying to persuade XJ owners to buy an S type, or S type owners to buy an X type, as various sales promotions were doubtless offered. When they replaced the S type with the XF they allowed journalists to write that they were appealing to a new younger audience, turning their backs on the older supporters of the S type who they thought were passe. It proved easier to lose the old supporters than to find the new enthusiasts in sufficient numbers. The XF was a pleasant looking car, but arguably Vauxhall had already done a similar  style well with its Insignia at a lower price than the Jaguar. The XF was  not distinctively Jaguar in the way the thoroughly modern S type was  on original launch with genuflections to the Mark 2. The well supported XJ with its own evolving styling was then changed substantially to look like a fattened version of the XF. The arrival of more Sports Utility vehicles  led Jaguar into competition with its sister brand, Range Rover where many thought Range Rover did it better. The Sports Utility look had little in common with the past glories of the sports, GT and sporting  saloons of the historic ranges.

Now today they scramble to make electric cars without defining what it was about previous ranges of their cars that people liked about Jaguar. Styling and image were an important part of it . When Jaguar cars started to look more like other cars they lost some of their fan base. Briefing against those who used to buy Jaguars was also a bad mistake.



My Intervention in the Chancellor’s Statement on the Economy

Rt Hon Sir John Redwood MP (Wokingham) (Con): When the Chancellor approved £150 billion of extra cash to be printed in November 2020 and gave a full guarantee against losses on the bonds, did he think that there could be any inflationary and public spending risk from that? I fully support giving back the huge windfall taxes that he is already collecting on energy, the VAT on fuel, the rip-off at the pumps and the much-enhanced profits tax coming from North sea oil and gas. That should be given back because people need some relief. On inflation, though, what did he think when he printed the money?

Rishi Sunak, Chancellor of the Exchequer: I am grateful to my right hon. Friend for his question. He and I have talked about inflation for quite a while. He will know that I have long been concerned about the potential of rising inflation and interest rates. It is something that he and I discussed very early in my time in this job. That is why, from the beginning, I have been careful to protect our public finances against the costs of rising inflation and interest rates. I am glad that we took those decisions. Now, because of that, we are in a position to act and to support people.



My interview with Liam Halligan, GB News discussing taxes, the economy and more

Earlier this week I had a discussion with Liam Halligan from GB News on a variety of topics including taxes, the economy and the Bank of England. You can watch the full interview below:



The Chancellor changes his mind.

The Chancellor who told us he could not afford another financial package before the autumn produced £15 bn of giveaways yesterday. He says £6 bn of that will come from a new windfall tax on oil and gas, and the rest will be covered by existing taxes and borrowing.

Instead of taking down taxes on oil and gas heating and petrol which would have reduced inflation he went for the route of one off payments to people. Had he done more to cut inflation it would have cuts his costs more, many of which are boosted by higher inflation.

He did not quantify the large amount of extra  tax he must be collecting on energy profits and sales given the huge price rises. His taxes make the cost of living  crisis worse.

He did tell us the Bank of England is independent and will now start getting on top of inflation. So I reminded him that he authorised the printing of another £150 bn of new money for strong recovery year. I asked him if he thought at the time that could be inflationary. He did not have an answer. I also pointed out he guaranteed the Bank against all losses on the bonds they bought, as his predecessors did. I asked him about the impact of the losses they must now be making. Again no answer.

Let me try again. What was it about the £150 bn you ordered to be printed that made you think it would not be inflationary?