• Fri. May 20th, 2022

One in six families in parts of Birmingham ‘cannot pay their fuel bills’

Chancellor Rishi Sunak is under increasing pressure to scrap a planned National Insurance increase due to come into effect next month as the cost of living soars while wages fall. He is due to make a major statement next week on the state of the economy, with the war in Ukraine set to drive up fuel bills further.

The increase in National Insurance will provide the cash that the NHS and social services urgently need. But Citizen’s Advice has warned that nearly one in six people in Birmingham’s Ladywood constituency are already unable to pay their energy bills without cutting essential expenses such as food.

Local MP Shabana Mahmood (Ladywood Lab) said: “These figures from Citizen’s Advice highlight the astronomical price increases that are compressing our communities.

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“Before the Ukraine crisis, inflation was already skyrocketing and the Conservatives’ choices exposed us to a cost of living crisis. The government must end its deeply unfair National Insurance hike that will hurt working people and businesses.”

Birmingham’s newest MP Paulette Hamilton (Lab Erdington) said voters raised concerns about the National Insurance increase in the recent by-election. She said: “People in Erdington are not against spending more on the NHS and social care, but they can’t afford it. They don’t know how they’re going to pay their bills.

“I follow the NHS through and through, but now is just not the right time to do it and I think the government needs to think again. Maybe to postpone it to a time when the country can afford it. to permit.”

MLA Steve McCabe (Lab Selly Oak) challenged the Chancellor in the House of Commons saying: ‘If the Chancellor had appreciated last fall how much energy costs and other household bills would rise, would have he always advocated an increase in National Insurance?

Mr Sunak said: “We have responded to rising energy bills by putting in place £9billion of support, which will reach households much faster than the proposals put forward by the opposition, the £150 reaching four out of five households just this April when the price cap rises.It should also be borne in mind that, thanks to the price cap, households will be protected against further increases until the fall.

National Insurance is expected to rise 1.25% next month. This means that a worker earning £15,000 a year will pay an additional £64 over a year. Someone earning £30,000 will pay an additional £252.

How much will the National Insurance increase cost me?

Salary, increase over 12 months

£15,000, £64
£20,000, £127
£30,000, £252
£50,000, £502
£80,000, £877
£100,000, £1,127
Figures from the Institute for Fiscal Studies

While the money will ultimately be used to fund social care, the money will initially go to the NHS with the aim of reducing a huge queue for treatment that has built up during the Covid-19 crisis.

NHS data shows more than a million people are waiting for care in the Midlands, the highest number of any region. There are 1,141,315 people on NHS waiting lists in the region.

Birmingham NHS Trust University Hospitals continue to have the longest waiting list of any hospital trust in the country, with 184,956 people waiting, including 31,770 people who had been waiting for over a year. The figures reflect the size of the trust, which runs a number of hospitals including Queen Elizabeth, Heartlands, Good Hope and Solihull.

However, the National Insurance increase comes as fuel bills are also expected to rise. The energy price cap will increase from April 1 for around 22 million customers. Those with default rates paying by direct debit will see a £693 increase from £1,277 to £1,971 a year – and another increase is possible in October, when the cap is reviewed again.

Rishi Sunak announced aid to households to cope with soaring energy prices. People living in households in municipal tax bands A to D will get a £150 rebate on their municipal tax bills. And households will get a £200 cut on their fuel bills, which the government will arrange directly with energy companies, but they will have to pay this back over five years, paying £40 a year.

The Chancellor will deliver his Spring Statement to the House of Commons on Wednesday 23 March. There is speculation he could increase household aid, but it is also believed he will refuse to back down on the National Insurance increase.

The cost of living is rising in other ways and inflation is running at 4.8% (there are different ways to measure inflation, and this figure is based on a metric called CPIH). But experts warn that prices will rise even faster due to the war in Ukraine, as Russia and Ukraine are major suppliers of fuel and raw materials such as food and metals.

The Resolution Foundation think tanks have warned that the conflict in Ukraine could push the peak of inflation in 2022-23 above 8%. This could leave the typical real household income of non-retirees 4% – or £1,000 – lower than in 2021-22.

The National Insurance hike only lasts for a year as it will be replaced in April 2023 by a new levy called the Health and Social Care Levy. Employers will then be required by law to tell each employee how much the tax is costing them, by publishing the figure on payslips.

But Treasury ministers have confirmed there is no such requirement for employers to tell staff how much the National Insurance increase is costing them this year.

Lucy Frazer The Treasury’s financial secretary, said HM Revenue and Customs, the official body which collects taxes, “has asked employers to include factual messages on payslips in 2022-23 to highlight the change temporary NIC (National Insurance) rates before the new Levy begins in 2023-24, but it is not mandatory.”

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