Tax rises and spending cuts ‘not necessary’ as new proposal emerges

Analysts at the National Institute of Economic and Social Research (NIESR) have said tax hikes and public spending cuts are not needed in the Autumn Budget. The group predicts nearly one in five households will have little or no savings by April 2024 and will struggle without more Government help.The research group is calling on Chancellor Jeremy Hunt to use the Autumn Statement to introduce a variable price cap scheme for energy bills, to provide targeted support to those who need it most.They also want to see benefits raised in line with inflation to prevent further ‘destitution’ for struggling families, and for Universal Credit to be increased by £25 a week for 12 months.Ministers should also set up a £2billion Housing Support Fund, the group said, to be distributed by local authorities, to help Britons meet soaring housing costs.From October, average yearly energy bills increased to £2,500 a year for typical households, as the Government’s Energy Price Guarantee put a cap on the unit price of energy. Bills could be more for larger households.READ MORE: Cold Weather Payment pays £25 when there’s very cold weather – are you eligible? The Autumn Budget is to be announced next Thursday (Image: GETTY)Professor Stephen Millard, deputy director for Macroeconomics at NIESR, said: ‘With the economy still reeling from the effects of the terrible Russian invasion of Ukraine and the Monetary Policy Committee raising interest rates to bear down on inflation, now is not the time to be tightening fiscal policy.’In fact, given that existing announcements have already restored stability to the financial markets and high inflation continues to benefit the overall fiscal position, it’s not at all clear that the Chancellor needs to raise taxes or cut spending in the Autumn Statement next week. It just doesn’t have to be this way.’The Bank of England recently increased the base interest rate to three percent, the eighth rate increase in recent months, in efforts to tackle surging inflation.This means a boost for the return on some Britons’ savings, though not all banks are passing on the increase, while some mortgage holders face more pressure as their monthly repayments increase.DON’T MISSUniversal Credit warning as your earnings could impact the amount you get [BENEFITS]Mortgage calculator shows how much more you can expect to pay after interest rate rise [PAYMENTS INCREASE]You could avoid inheritance tax with a gift of any amount – but there’s a catch [TAX] The new full state pension could rise to more than £200 a week if the triple lock is reinstated (Image: EXPRESS)’With six million households running out of savings by April 2024, we need targeted policies to help the most vulnerable.’All UK households with a domestic energy supply are receiving a £400 energy bill discount to be paid in six instalments over six monthsPeople are receiving a £66 instalment in October and November, and four £67 instalments from December to March.People who pay by direct debit will receive the discount automatically. Those on traditional prepayment meters will be provided with energy bill discount vouchers.