The new Chancellor of the Exchequer, Jeremy Hunt, has today [17 October 2022] delivered the Government's medium-term fiscal plan.
In his statement, the Chancellor announced a reversal of almost all of the tax measures set out in the previous Chancellor's Growth Plan that have not been legislated for in parliament. The new Chancellor also announced a Treasury-led review of the Energy Price Guarantee and the Energy Bill Relief Scheme.
Richard Sagar, Head of Policy at CFG, said:
"The new Chancellor has largely undone his predecessor's mini-budget. Retaining the basic rate of income tax at 20% will mean that Gift Aid transitionary relief is not applicable, and reversing changes to IR35 will mean that any minor reductions to administration for charities will not occur.
"But these changes are insignificant compared to the potential cuts to government spending that are hinted at in his statement. It would be catastrophic for those on low incomes if benefits are not raised in-line with inflation, and if hard-pressed council budgets are cut to unsustainable levels this has profound implications for charities and the people they serve.
"There's a tipping point where efficiency savings become cuts to core services and support for those most in need. At CFG we are particularly concerned about the impact on local government which commissions so many essential community and personal services. We're calling for an immediate uplift in welfare benefits to help those in greatest need here in the UK.
"For many people, the most immediate blow will be the new uncertainty about their future energy bills, with the news that universal support will end in April 2023. The human impact of stress is appalling, and the impact on charitable and public services is also significant. That anxiety and financial strain will undoubtedly increase demand for support from charities, especially those working on debt advice and mental health.
"We look forward to hearing more information about any changes to the Energy Bill Relief Scheme. The sooner we have details of the review by Treasury, the information that will help them understand the needs of charities, and how we can ensure charities receive support, the better."
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