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Calls to bring support rises forward as Chancellor warns of economic ‘storm’

Rishi Sunak called on businesses to ‘invest, train and innovate more’ to help boost productivity and improve the long-term prosperity of the UK.

19 May 2022

The Treasury has been called on to bring benefit and pension rises forward to help the nation’s most vulnerable, as the Chancellor warned of a “perfect storm” of supply shocks rocking Britain over the next few months.

Karl Handscomb, senior economist at the Resolution Foundation think tank, said waiting for the annual increase in April 2023 was “a recipe for more debt”, adding: “The main thing is the need to provide more support for those highly reliant on benefits.

“If (the Treasury) get started now, they can do it before the next energy price rise in October,” he told the BBC.

A spokesman for the Treasury told the broadcaster: “We understand that people are struggling with rising prices, and while we can’t shield everyone from the global challenges we face, we are supporting British families to navigate the months ahead with a £22bn package of support.”

It comes after Rishi Sunak called on businesses to “invest, train and innovate more” to help boost productivity and improve the long-term prosperity of the UK.

In a speech to the CBI on Wednesday evening, the Chancellor said he stands ready to do more to help families cope with the impact of rising inflation.

However, he also spoke of a “perfect storm” of supply shocks rocking Britain, warning that “the next few months will be tough”.

Speaking at the annual dinner of the business organisation, Mr Sunak told businesses “we are on your side” and called on them to help increase productivity and enterprise, adding: “We need you to invest more, train more, and innovate more.”

He said he will help business achieve these goals by cutting tax.

“In the autumn Budget we will cut your taxes to encourage you to do all those things,” he said.

“That is the path to higher productivity, higher living standards, and a more prosperous and secure future.

“Our role in Government is to cut costs for families. I cannot pretend this will be easy. The next few months will be tough, but where we can act, we will.

“We have provided £22 billion of direct support, and we are going further. In October, we’re cutting energy bills by a further £200.

“In just a few weeks’ time, the national insurance threshold will increase to £12,500.

“That’s a £6 billion tax cut for working people, and of course as the situation evolves our response will evolve.

“I have always been clear, we stand ready to do more.”

The Chancellor also used his speech to warn of the severity of the economic situation facing the UK.

“I hardly need to tell this audience that the economic situation is extremely serious,” he said.

“A perfect storm of global supply shocks is rolling through our economy simultaneously.”

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