Mr. Sebastian Barnes:

The Government has to strike a delicate balance between protecting the economy from this big shock to people's spending power and helping the most vulnerable while on the other hand, not pumping too much money into the economy at a time when inflation is already high. The Government can improve that trade off by directing more money towards those who need it most rather than spreading it out more equally. There is a case for stronger targeting but it is obviously difficult. Targeting is not an easy thing to do. We know that poorer houses need to be targeted, as do rural households and older households but even within those groups, not everyone is treated the same. There is a difficult mix and that is why we do not come down particularly strongly in any particular way, partly because it is not our mandate to look at the exact design of specific measures but also because we recognise it is a difficult thing for the Government to do. It must make a number of judgments and trade-offs which is its job, rightly, and not our role.

It may be helpful to consider using either the welfare system or the tax system in more creative ways than they have been used in the past to make sure the money is going to those who need it most because that will strike the best balance. The impact of this shock is radically different across households.