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The BBC’s Laura Kuenssberg told Jeremy Hunt “it sounds like you’re in a parallel universe” after his recent claims about the cost of living crisis and the economy.
The chancellor made headlines after he posted on X on Friday that £100,000 is not “a huge salary” after mortgage costs and childcare.
His colleague, minister Andrea Leadsom, also caused a stir this week after she claimed the cost of living crisis had ended now inflation is down.
The presenter of Sunday with Laura Kuenssberg then pointed out that private rents are up 9% since 2023, council tax for band D up 5.1% since 2023 and petrol prices up 2.3p since January 2024.
After reminding Hunt of these incidents, she asked: “Isn’t there a danger that actually you sound like you’re in a parallel universe?”
Hunt said he was talking to one of his own constituents about paying for childcare in an area where the house prices are averaging around £670,000.
But, the BBC journalist noted: “In your own area, in Surrey, the average full time wage is not even half of that. It’s £42,000.
“So, don’t you think, to many people hearing that, it just sounds completely out of touch?”
Hunt said: “Well, I was talking to one of my own constituents who was saying that, but I do accept that even those people on those higher salaries do feel under pressure.”
He said for the national average salary – those on £35,000 – he reduced their National Insurance contributions, while those on National Living Wage have seen an increase.
Actually, due to fiscal drag – where tax thresholds do not change in line with inflation and rising wages – people will be paying more in tax.
“By the end of this parliament, those people will be worse off,” Kuenssberg said, noting PM Rishi Sunak is still saying the economy is bouncing back.
The chancellor pointed out the Office for Budget Responsibility says we are going to recover to pre-pandemic living standards “two years earlier than previously thought”, saying the “plan was starting to bear fruit”.
Elsewhere, Kuenssberg also asked: “Has the cost of living crisis ended?”
Hunt admitted, “we’ve had a very very tough patch,” but blamed the invasion of Ukraine for driving up energy prices and the Covid pandemic.
He continued: “I think people will welcome the fact that inflation has fallen – but we’re not there yet.
“We need to stick to the course because we need inflation to get down to 2%.
“The thing that will make the biggest difference for families up and down the country is when interest rates falls, and the mortgage rate starts to fall.”
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