The cabinet has been discussing ways of lessening the burden on families and individuals struggling amid the cost of living crisis, in particular by coming up with “non-fiscal” proposals that do not involve increasing taxes.
They include ideas which have been put forward by Boris Johnson, and others that have already been in circulation.
Easing health and safety rules in nurseries
This proposal was said to have come from the prime minister, who was reported to have suggested lowering legal requirements in England stipulating that there must be at least one member of staff for every three children in groups aged two years and under.
Pros: Many nurseries have found themselves stretched in terms of staffing and having to bring in agency workers. Parents and guardians have had to foot the bill in terms of increased fees.
Cons: Looking after a group of toddlers can be a challenging, perhaps at times terrifying, task for any number of carers. The idea only helps parents with children under three years. The coalition government abandoned plans to lower child-to-staff ratios.
Relaxing the frequency of MOTs
The transport secretary, Grant Shapps, is said to have suggested reducing the need for vehicles to have an annual MOT. Currently MOTs must be carried out on every vehicle that is three years old or over.
Pros: Avoiding the need to renew an MOT certificate could save drivers up to £54.85 for a car and £29.65 for a standard motorcycle.
Cons: The idea is all very good in practice until a car is involved in an accident and someone gets killed. The AA also opposes it on the basis that it would still lead to increased bills from repairs.
Scrapping tariffs on food produced exclusively abroad
Food stuffs from overseas, such as rice and oranges, would be among those which might come down in price at supermarkets if tariffs were lifted.
Pros: The move could save under-pressure consumers if cost savings were directly passed on. Unlike with other ideas, the savings might be universally felt, including by lower-income families who have cut back on supplies that many take for granted.
Cons: Leverage in Britain’s trade negotiations would be removed, a reason why the idea is reported to be facing resistance from the international trade minister, Anne-Marie Trevelyan.
Lifting green levies on bills
The charges, which are used to fund renewable energy schemes, are opposed by Tory backbenchers and sections of the rightwing press, though the business secretary, Kwasi Kwarteng, has held the line.
Pros: The levies add £153 to the average energy bill. Officials were reportedly examining if the levies could be phased out gradually or simply dropped by the autumn when bills are expected to rocket.
Cons: Johnson has already said that green, sustainable, electricity can help to reduce bills.
Cutting red tape to allow more ‘parallel imports’ from abroad at lower prices
“Grey market goods” are branded products that are imported into a market and sold without the trademark owner’s consent. It is not illegal, but sellers need to apply for a licence in what can be a bureaucratic process.
Pros: The cost of branded clothing and electrical goods, such as smartphones, might come down by cutting red tape to allow more “parallel imports”.
Cons: Not an idea which helps the most deprived families, who are struggling to feed themselves, let alone purchase consumer goods.
Targeted campaign informing the public about unclaimed benefits
About £15bn of benefits are believed to go unclaimed each year. This includes 1.3m families who do not take up an offer of up to £2,000 a year for childcare costs. Other savings cover those living alone who are unaware they could be due a single-person discount on council tax – calculated on the assumption that two adults live in a property – and get 25% off their bill.
Pros: A campaign to inform the wider public of unclaimed benefits could be a relatively low-cost way of tackling the cost of living crisis.
Cons: The sight of resources going into a public relations campaign will be of no benefit to lower-income families who are barely surviving despite making the most of any benefits they are already entitled to. Experts also describe as “sketchy” government data supporting suggestions that much support goes unclaimed.
… and despite being a fiscal measure, tax cuts
Kit Malthouse, the policing minister, and Jacob Rees-Mogg, the efficiencies minister, were reportedly among the most vocal of those suggesting that tax cuts remain the best way of helping struggling members of the public.
Pros: Wriggle room exists if figures released this week are anything to go by. HMRC collected £718.2bn in taxes in the last financial year, an increase of almost a quarter from the year before, while national insurance, capital gains and inheritance tax takes all reached record highs.
Cons: Despite pressure from colleagues, the chancellor, Rishi Sunak, was said to be particularly conscious of inflationary risks; during cabinet discussions No 10 said that he “underlined the importance of not feeding in to further inflation rises, and emphasised that the UK is currently spending £80bn servicing our debt”. A tax cut would also leave a hole in spending plans.
