Rishi Sunak is set to announce a £ 1bn financial package to help with the cost of living on Thursday, just a day after Sue Gray’s long-awaited report, Sky News understands.
The chancellor will meet tomorrow with Prime Minister Boris Johnson to sign the package, which could include a new special tax, help with fuel bills and assistance to the most vulnerable.
It is understood that Mr Johnson is keen to be able to announce the important spending package before MPs disappear for the recess after Thursday.
It had previously been expected in early June, following the Queen’s platinum jubilee.
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It is understood that the Prime Minister expects this to take a bit of the needle in the report of Mrs Gray’s party, which is expected on Wednesday.
This will lead to strong accusations that it is using the spending announcement as a “dead cat” to distract the country and its MPs from criticism, but the government will argue that inflation and growth forecasts make the delay unwise.
It is understood that the package has not yet been agreed. Any disagreement between Johnson and Sunak over the content could still delay it.
Sunak told the IWC to prioritize the most vulnerable, but Johnson will be willing to do everything possible to pacify his advocates who have demanded £ 1bn for everything from rising profits to cuts to VAT.
Two weeks ago, Sky News said there would not be enough information on the likely cost of energy in the fall to make a judgment before July.
Today, however, Ofgem CEO Jonathan Brearley announced that the UK energy price cap is expected to rise in October to around £ 2,800, an increase of £ 830.