Pressure is building on British Chancellor Rishi Sunak to help struggling households as he pledges to “stand by” British families affected by the deepening crisis in the cost of living.
Mr Sunak, who will deliver his spring statement on Wednesday, will link the stability of the UK economy to defying Russian President Vladimir Putin's invasion of Ukraine.
But despite his tough words for the Kremlin, he faces a crisis at home as Labour accused him of being the “high-tax Chancellor”, and the Federation of Small Businesses urged him to do more.
On Tuesday, while working late into the night rehearsing his speech with aides, Mr Sunak exercised restraint when pizza was served, accepting only one slice. There are fears among Conservative MPs that his lack of indulgence could be a metaphor for his fiscal policies, and Laura Kuenssberg, the BBC’s political editor, said he risked being called “One Slice Sunak”.
Mr Sunak is expected to outline more plans to support households facing financial hardship, but he is also expected to tell MPs in the House of Commons that having a strong economy is vital in tackling Moscow’s aggression.
The chancellor will deliver his speech to the backdrop of inflation soaring to a 30-year high.
Rising energy, goods and food prices helped push inflation to increase by 6.2 per cent in the 12 months to February, Office for National Statistics figures revealed on Wednesday morning, hours before Mr Sunak’s speech to the Commons.
“So when I talk about security, yes — I mean responding to the war in Ukraine,” he is expected to say.
“But I also mean the security of a faster-growing economy, the security of more resilient public finances and security for working families as we help with the cost of living.”
But those struggling to pay their energy bills will be hoping for new support from Mr Sunak.
Ms Kuenssberg suggested Mr Sunak aims to be a chancellor who is pulling back on public spending.
“He wants to be a chancellor who talks passionately about the limits on government, he wants to be a chancellor for whom the taxpayer shouldn’t have to shovel out for everything,” she told BBC Radio 4’s Today programme.
“I’m told he only had one very abstemious single slice of pizza and the fear among Tory MPs is that the scale of what he’ll offer today just will be too skinny, it won’t be generous enough.
“He could be dubbed ‘One Slice Sunak’ for not going far enough.”
Charity Citizens Advice said it was “continuing to break unwelcome records ... issuing more food bank vouchers and referrals to charitable support than at any point since the start of the pandemic”.
“In his spring statement, the chancellor has a crucial opportunity to stem the tide of this cost of living crisis,” said Dame Clare Moriarty, the organisation’s chief executive.
"Increasing benefits in line with inflation, expanding the Warm Home Discount and announcing a more generous energy rebate should be top of his list.
MPs were told on Tuesday that the measures already announced were “insufficient for the scale of the crisis we’re facing”.
“We have to recognise that there are millions of households that are simply unable to cope with the energy bill increases that we’re going to see this year,” Gillian Cooper, head of energy policy at Citizens Advice, told the House of Commons business, energy and industrial strategy committee.
MoneySavingExpert founder Martin Lewis told the committee that energy companies were increasing customers’ direct debits disproportionately to the price cap increase, even for those in credit.
The rocketing energy bills faced by households was caused in part by a post-pandemic rise in demand for gas, with lower levels of production. This has been exacerbated by the war in Ukraine.
A planned rise in National Insurance contributions and changes to income tax, combined with forecasts that wages will rise more slowly than inflation, will also hit households.
A briefing from the House of Commons library said the cost of living across the UK has been rising since early 2021, while in January this year inflation reached its highest recorded level since 1992.
Mr Sunak has already announced a £200 ($265) loan to gas and electricity payments from October, although not until the price cap jumps 54 per cent.
Certain households will receive a £150 council tax rebate in April.
The Treasury has said the measures announced so far add up to about £21 billion of support this year, taking in the rebate, changes to Universal Credit, and the freezing of fuel and alcohol duties.
But Mr Sunak is also expected to set out a new culture of enterprise, urging the private sector to train, invest and innovate more.
Other options available to him include a cut to fuel duty or adjustments to VAT in certain sectors.
The Resolution Foundation think tank has suggested increasing benefits, while there have been calls to scrap the planned National Insurance rise.
Labour, however, unveiled analysis claiming Mr Sunak was on track to have raised more tax than any chancellor in half a century, with 15 tax rises in the past two years.
They said the “high-tax chancellor” had added £27.3bn to the tax burden of UK businesses and householders since the 2020 budget.
The party is expected to say Mr Sunak is now faced with a choice over a rise in national insurance to further hit households, or to impose a one-off windfall tax on oil and gas producers.
“Over a decade of Tory government, the economy has grown far slower than when Labour was in power, and it is set to grow even slower in the coming years,” said Pat McFadden, shadow chief secretary to the Treasury.
The Office for Budget Responsibility previously said that by the end of this Parliament, the tax burden as a proportion of GDP would be at its highest level in 70 years, and Labour said no other G7 economy was increasing tax on working people this year.
Meanwhile, the Office for National Statistics said interest payments on government debt jumped to £8.2bn last month, up from £5.4bn a year earlier and the highest for any February on record.
Paul Wilson, policy director at the Federation of Small Businesses, called on Mr Sunak to act.
“We’ve been talking about these issues for a number of months and we very much understand why so much attention is on domestic consumers," Mr Wilson said.
"But the test will be what actions are taken tomorrow in light of the severity of the challenges."
Consumer group Which? found only 10 per cent of people believe the economy will improve over the next 12 months, and 74 per cent think the situation will get worse.
