Government plans to tackle the cost-of-living crisis could be coming imminently, it has been reported.
The Prime Minister and Chancellor have come under mounting pressure in recent weeks to provide greater support for families and business as the cost-of-living crisis deepens.
It comes as the cost of fuel, food and energy continues to soar, with inflation reaching nine per cent last week – its highest level in decades.
In a further blow, energy regulator Ofgem this week warned that bills could shoot up by more than 40 per cent in October.
The Treasury are reportedly working on plans to help alleviate the cost-of-living, as the crisis shows no signs of slowing down.
So, what measures could be on the way?
A windfall tax on energy producers?
Plans for a windfall tax on North Sea oil and gas producers appears to be gaining traction. If implemented, this would see oil and gas producers taxed on their profits as they have benefitted financially from soaring global prices.
A windfall tax is essentially a one-off tax imposed on a company by Government to target firms that have benefitted from something they were not responsible for.
In this case, oil and gas companies have made a lot more money this year due to increased demand following the pandemic and supply issues following the Russian invasion of Ukraine.
Proponents of a windfall tax believe it could fund a direct energy bill rebate to help families and businesses, worth £10 billion.
On the other hand, critics of such a windfall tax argue it could deter investment in the industry and firms ploughing money into new projects.
What about tax cuts?
A cut to VAT has been mooted, which would impact individuals and business across the board. The move would also help the lower paid as they are disproportionately hit by VAT.
There is also the possibility that income tax could be cut by one percentage point, a move that could be brought forward from the cut promised by the Chancellor to be introduced in 2024.
Whatever measures the Government chooses to implement, rising costs and inflation are going to continue to impact individuals and businesses in the months ahead.
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