Zahawi backs under-fire Sunak as Tories say more help is needed on eve of soaring bills

31 March 2022, 19:56 | Updated: 31 March 2022, 20:31

Nadhim Zahawi reacts to the Spring Statement

Nadhim Zahawi has defended Rishi Sunak over his package to help families with the cost of living crisis, despite senior Tories saying the Chancellor should come back with more.

It comes ahead of the energy price cap rise on Friday, and the average Band B and D council tax bills also going up by just under £70, meaning bills could soar to thousands of pounds a year.

Speaking on LBC's Tonight with Andrew Marr, Mr Zahawi said: "I think that making £22 billion available, £9 billion to help with energy costs, the balance of that targeted the money for local government - who know those families really well - doubling to a billion in just one year is a substantial amount of help that's going in for those families and of course we're not sitting back and saying job done.

"We continue to keep a close eye.

"Inflation is a global battle."

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Earlier this week on Tonight with Andrew Marr, Sir Iain Duncan Smith said Rishi Sunak needed to "come back" with new ideas about how to tackle the UK's cost of living crisis to avoid "1970s stagflation".

Stagflation is when the inflation rate and unemployment is high and the economic growth rate slows.

"The direction of travel right now is heading towards high levels of inflation, absolute zero growth," he said.

"And the only way out of that is at the moment to focus on growth."

The energy rise cap is set to increase by 54 per cent due to a record increase in global gas prices over the last six months, Ofgem said.

It means a £693 rise for millions of customers from £1,277 to £1,971 per year which could increase further when it is next reviewed in October.

The package of support announced by Mr Sunak included a £200 up-front rebate on energy bills from October, which will have to be repaid over five years from 2023, plus a £150 council tax rebate for homes in bands A to D from next month.

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Andrew Marr questions Education Secretary Nadhim Zahawi.

Mr Zahawi addressed the Chancellor's decision to not uprate Universal Credit to cover the rise in inflation.

"That would have really dealt with the situation much more effectively," Andrew said.

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But Mr Zahawi argued: "If you look at what [the Chancellor] did - before the Spring Statement - on Universal Credit and the tapering and of course the Spring Statement with the national insurance rise that puts more money in people's pockets.

"This Friday, the national living wage goes up, which puts another £1000 in people's pockets."

Despite Mr Zahawi standing firm in his support of the Chancellor, another senior Tory was quick to criticise Mr Sunak.

Asked by Andrew about the Spring Statement, former Deputy Prime Minister Michael Heseltine said: "It's cloud cuckoo land.

"The Chancellor said the public's finances are in a difficult situation, the debt is rising, and inflation is likely to force up interest rates.

"All this talk about tax cuts, cutting public expenditure and all this sort of stuff is simply not real in the present circumstances.

"What is needed is a strategic plan to battle our way through by increasing the scale of the economy and economic activity and more government investment but there are no plans except in a limited number of places."

Spring Statement was 'cloud cuckoo land'.

Labour leader Sir Keir Starmer has also been vocal about the mini-budget announcement.

He said on Thursday: "Britain deserves better than the pathetic response we got to the Conservative cost of living crisis in the mini-Budget.

"You know the reality - prices are going through the roof, and wages are going through the floor."

He claimed the Conservatives had overseen "the biggest drop in living standards since the 50s" and the highest taxes in 70 years.

"Even allowing for everything the Chancellor announced, families are £2,620 worse off. Britain deserves better than this," he added.