Sunak says he chose to prioritise lifting NI threshold over increasing benefits by more because other measures in place for claimants
Q: People using heating oil or LPG will not benefit from the energy cap.
Sunak accepts that. But he says they will benefit from the council tax refund. And he says the energy bills discount [or loan] applies to electricity bills, not gas bills, so people in these groups benefit.
Alison Thewliss, the SNP’s Treasury spokesperson, goes next.
Q: How will the VAT cut on energy saving measures help people who cannot afford solar panels?
Sunak concedes that some people cannot afford solar panels. But the government is already helping people directly make their homes more energy efficient.
Q: How will people using pre-payment metres be able to get the energy bill rebate?
Sunak says there are mechanisms in place to make sure they get the money. He says the business department is in the lead on this.
Dan York-Smith, director of planning, strategy and budget at the Treasury, says the details will be published in the summer.
Q: You cannot opt out of this £200 “rebate”. So people are being forced to take on more debt?
Sunak does not accept that. He says it is not a debt. There is no interest, and it will not accept someone’s credit rating. He suggests Thewliss’s language may alarm people. “Describing it as a loan is wrong,” he says. It is a means of spreading the cost of this year’s increase.
Thewliss says the government is forcing people to take something that it thinks will be good for them.
Sunak says, instead of asking people to pay £200 this year, it is allowing people to pay it over five years.
He suggests Thewliss would rather increase borrowing. But he does not think that is responsible, he says.
Q: In what sense is the health and social care levy hypothecated?
Sunak says the health budget takes account of that money coming in. But it is not formally hypothecated, he confirms. He says it would not be right of the health budget to fall if the levy raised less money than expected.
Anthony Browne (Con) goes next.
Q: Why did you decide not to scrap the health and social care levy?
Sunak says he thought it was right to have a dedicated funding stream for health and social care. And it is a progressive measure, he says.
If he had scrapped it, most of the benefit would have gone to the top 15% of taxpayers, he says.
Q: Why is it important to have the national insurance threshold at the same level as the income tax threshold?
Sunak says that was a manifesto commitment. He says it simplifies the system.
Q: Why has the National Crime Agency’s budget been cut by 4.5%
Sunak says he does not think it has been cut. He says some agencies are getting more money for enforcement. They are trying to work out where it is best spent, he says.
Eagle says the Treasury’s record on fraud has been “anaemic” and “complacent”.
Sunak does not accept that.
He says, when the BounceBack loans were announced, they expected 60% of them to be lost. But 80% are now performing well, he says.
Sunak says the tax burden is rising because the government is investing strongly in public services, while the government recovers from a once-in-300-year shock.
Q: But you say you are a tax cutting chancellor?
Sunak says he has not said that. But he has said that, going ahead, his priority is to reduce taxes.
Q: The NAO says between £12.4bn and £20bn has been wasted in emergency Covid schemes. The Treasury is complacent about fraud, isn’t it?
Sunak does not accept that. During the pandemic the priority was to get support where it was needed.
He could have put in more fraud checks. But it would have taken “weeks and weeks and weeks” to get money out to people. At the time businesses were saying they neeed money within hours to avoid laying people off.
He says they are still pursuing fraud. They will get fraud levels down to levels that are acceptable, he says.
Dozens of people have been arrested, he says.
Angela Eagle (Lab) is asking the questions now. She asks about help for people with living standards.
Sunak says it is hard to know what will happen to energy prices in the autumn.
Q: You have chosen to put 1.3 million people into absolute poverty.
Sunak does not accept that. He says he has chosen to help people, reducing by a third the impact of rising prices. But prices are a factor outside his control.
He accepts that choices are made. He suggests Eagle would have made a different choice, choosing not to help 30 million people by cutting their taxes.
He says he is is trying to adopt a responsible approach to borrowing, while providing support fairly. He says he does not think extra borrowing would have been responsible. That would have been inflationary, he says.
Q: Did you think about uprating benefits by a more up-to-date inflation figure?
Sunak says there are operational factors. He says it takes time to uprate benefits. And one system can only be uprated once a year.
But he also says this would have required more borrowing. And he says he did not want an irresponsible approach to borrowing.
Q: But you chose to lower taxes.
Sunak says the income tax cut applies in a different year.
Q: The national insurance threshold rise is going up.
Sunak accepts that another chancellor might have raised benefits instead of cutting national insurance.
But he says he took the view that other measures were in place to help people on benefits.
And he says, overall, the measures are progressive.
UPDATE: This is from the i’s Paul Waugh.
Mel Stride (Con), the committee chair, says he accepts “most” of what Sunak said about his measure being progressive.
But what was in the spring statement for people not working, he asks.
Sunak says most people on universal credit are in work, or can work.
For people who cannot work, there was an extra £500m in the household support fund.
Q: The OBR said that uprating benefits in line with the present rate of inflation would cost £11bn. So £500m is a small amount.
Sunak says there are other measures too. The local housing allowance has gone up, and that is worth £600 to 1.5 million people.
There is help with council tax payments.
And the energy measures disproportionally help low-income households, he says.
But Stride repeats his point – he says the low-income group are getting less help.
Sunak says these are all choices. He chose to help people with fuel duty, and to cut income tax.
Sunak says the tax burden is going up because public spending is going up.