The eight 'blue sky' ideas to ease cost of living crisis

This week's cabinet meeting came with an urgent request. Prime minister Boris Johnson had asked ministers to turn up with suggestions on how they could help to reduce the burden caused by the rise in the cost of living.

But, crucially, the request came with a caveat that the ideas had to be "non-fiscal" - cost neutral for the Treasury.

Details of some of the brainstormed suggestions have since emerged, along with some ideas proposed by others.

But will they work...?

LESS FREQUENT MOTS

Increasing the interval for MOTs from one to two years would save drivers up to £27.42 a year (Image: PA)

One proposal said to be under consideration by ministers is increasing the required interval for the statutory roadworthiness check for cars from one to two years.

With the maximum garages can charge capped at £54.85, the most this could save the average motorist comes to £27.42 a year, which is hardly going to make a difference.

And car owners could find themselves facing higher repair costs to fix problems which would have emerged during the annual test.

The Independent Garage Association said the move could mean more cars with dangerous defects on our roads.

CHANGES TO CHILDCARE

Less than half of nurseries offer free childcare places because funding does not meet their costs (Image: PA)

Another idea discussed by the cabinet was to reduce the required ratio between adults and children in childcare settings - something that could reduce costs for parents.

But any benefit would be felt by only one section of society - parents with young children in childcare.

And the numbers were set for a reason, to ensure enough staff were on hand to provide safe care.

When the proposals were first aired in October there was opposition from the industry, with the Early Years Alliance saying it was a quick fix to solve a crisis caused by under-investment.

Another suggestion involves more heavily promoting the £2,000 a year 'childcare grant' which parents can claim - but which one in five do not realise they are entitled to.

For every £8 they pay into an online childcare account, the government adds a £2 top-up, up to a maximum of £500 every three months.

Parents of three and four-year-olds are also entitled to 30 hours of free childcare for 38 weeks of the year.

But not every provider has enrolled in the government scheme, with some saying the money it pays - around £4 an hour - does not cover their costs.

TARIFF-FREE FOOD

Cutting tariffs on imports of food not produced in the UK - such as rice - is thought to be another idea on the table, with the theory being that supermarkets would follow suit by cutting prices.

We import around 30pc of our food, according to the Institute for Fiscal Studies. Tariffs vary from 10pc on potatoes, 12pc on other vegetables and 12pc plus £147 per 100kg on meat.

But cutting tariffs will not dent rising prices caused by shortages of wheat and sunflower oil linked to the war in Ukraine.

And farmers' leaders warn slashing levies could leave them unable to compete with food produced outside the UK to lower welfare or environmental standards.

Some ministers are also concerned, as it could undermine future trade negotiations as the UK would lose a significant advantage.

DROPPING NET ZERO

The government's target to cut net carbon emissions to zero by 2050 is estimated to cost £1.4tn.

The sum has been questioned by the Net Zero Scrutiny Group of Tory MPs, with some arguing it should be abandoned in a bid to reduce bills.

But think tank Onward has warned ditching the policy could cost the Conservatives 39pc of their votes - not to mention hampering efforts to combat climate change.

It could also see them in court, as the target is legally binding under the 2008 Climate Change Act, which was amended in 2019 to increase the target from cutting 80pc of emissions to 100pc by 2050.

PRIVATISATION

Boris Johnson is considering privatising the Passport Office because of delays in processing applications (Image: Archant)

Boris Johnson is said to be less than amused at the long delays facing those who apply for a passport or driving licence.

Some due to travel abroad are paying a £100 surcharge to fast track applications.

Those renewing their driving licence have no such option and face a wait of several weeks.

Both the Passport Office and the Driver and Vehicle Licensing Agency blame Covid for delays.

But according to reports, there is some government appetite to privatise the agencies and other publicly-funded organisations if they cannot improve their performance, in an effort to get better value for money.

But critics say there is no obvious way in which privatisation would mean more money in the pockets of those who need it most.

BENEFIT BOOST

The Resolution Foundation, an independent think tank on living standards, says extra help must be made available for the poorest families, who are suffering the most from steeply rising bills.

Its chief executive Torsten Bell said the easiest way to do so would be via the benefits system.

While it's not yet clear whether the idea has been floated as part of the cabinet's brain-storming session, it would certainly not be fiscally-neutral.

Chancellor Rishi Sunak has vetoed spending any more government money immediately, warning it could fuel inflation and add to the the £80bn a year debt interest bill.

WINDFALL TAX ON FUEL FIRMS

There are calls for a windfall tax on fuel firms' profits to help offset consumers' bills (Image: Archant)

As average fuel bills went up by £700 in April, the energy firms were coining it in.

The so called big six - SSE, Scottish Power, E.ON, EDF, Npower and Centrica – banked £7bn in profits over the previous five years.

Oil giant Shell made twice that in 2021 alone.

Labour is calling for a windfall tax on energy firms to help customers pay their bills.

Mr Sunak is now said to be considering the idea, after earlier ruling it out on grounds it could harm investment in alternatives to fossil fuels.

CUTTING TAX

People in Great Yarmouth are to receive their £150 energy rebate next week. (Image: PA Wire/PA Images)

Putting more money in our pockets might help to cushion the blow for now.

But like the recent 5p P/L cut in fuel duty, which was swallowed up by rising pump prices, it may not make much difference longer-term, especially for those on lower incomes.

Raising the National Insurance threshold to £12,750 will make the average worker £330 a year better-off from July - less than half the £700 a year increase in the average household's bills.

And who knows how much things will have gone up by 2024, when the basic rate of income tax is set to be cut by 1p in the pound? And again, cutting tax would have fiscal implications.