Lord Willetts is President of the Resolution Foundation. He is a former Minister for Universities and Science.

The Treasury is supposed to work on a stable and predictable annual calendar of economic events. Other departments, like the Foreign Office or Home Office, may just respond to one crisis after another but the Treasury has a regular timetable it can stick to – rather like the annual pattern of rural life in one of those beautiful illustrated medieval cycles of the seasons.

Key anchors for this are the twice yearly updates of the economic forecasts – in the Spring and the Autumn. Autumn makes more sense for public spending decisions, as spending departments need due notice of change in spending plans for the following year.

Tax is rather different and a Spring Budget can help limit forestalling before the new tax year. At the moment, the Treasury is trying to make the Autumn event its main budget announcement, with the Spring forecast much more modest. There has been strong briefing to lower expectations of any big policy announcements next week. But having emerged from one crisis – the pandemic – the Chancellor now finds himself straightaway in a new one driven now by the invasion of Ukraine. He needs to do something.

There is now intense pressure on living standards from the combination of energy prices, food prices and increases in tax. Our forecast at Resolution Foundation is for real household incomes to fall by four per cent this coming financial year – the sharpest squeeze since the 1970s.

We are about to have an unexpected and significant surge in inflation which will hit families hard unless we get help to them promptly. A key mechanism for doing this is through the uprating of benefits, from Universal Credit to the State Pension. The problem is that benefits are uprated every April, based on the previous September’s CPI inflation rate. But last September was a different era – we hadn’t even heard of Omicron back then.

This means that benefits will rise by 3.1 per cent even while inflation is forecast to rise to over 8 per cent. Over the year this amounts to a £10 real-terms cut in support for millions of low-and-middle income families, as well as pensioners.

One solution would be simply to bring forward next year’s likely uprating increase to this year. There would be a period when benefits are higher than they otherwise would be, but the aim would be to do an uprating of less than inflation next year so as to get back on track. The key advantages of bringing forward benefits uprating is that it is targeted and temporary. The same cannot be said for many of the alternatives being proposed.

There is also pressure from Conservative MPs to help families with tax cuts. One candidate is to postpone or abandon the National Insurance increase to fund the NHS and social care. This measure has turned out to be badly timed, but it is still right to recognise that if we are to spend more on health and social care we have to pay for it. If it were delayed it would come in closer to the next election.

Moreover, low-income families hit hardest by high food prices and energy bills would gain the least from cancelling or postponing this tax rise. And it is important that it does not look as if the Chancellor retreats in the face of political and media pressure. He is earning a reputation as a true fiscal Conservative. That reputation helps him maintain the confidence of markets. He should not endanger it by abandoning the national insurance increase.

Another candidate to deliver tax cuts is fuel duty. Robert Halfon is an indefatigable campaigner on this. It is emblematic of white van man. But how much the financial reality lives up to this is not clear – affluent people have bigger cars and drive further. But the Treasury knows that fuel duty is one of their revenue sources now in long term decline as electric vehicles replace the old gas guzzlers, so they may be more willing to give some of it up just to ease the political pressure.

Another option would be to cut the rate of VAT on energy. This could be branded as a measure made possible by Brexit as we now have more control over our own VAT rates. And it helps a wider range of people than car drivers with higher mileage. I believe it would be a stronger candidate than either reversing the national insurance increase or cutting fuel duty.

However if the Chancellor is spending money bringing forward next year’s benefits increase and cutting taxes he needs some way to help fund that. And there may be emergency increases in spending on military help for Ukraine and support for its refugees. Of course, in a crisis such as the one created by Russia’s invasion of Ukraine now, he could say that some of the spending is generated by war, and that can be financed by borrowing. We spend the money now to make life safer for future generations who may eventually pay – way out in the future. That was demonstrated in a 1958 TV interview exchange between the young Robin Day and the then Governor of the Bank of England, Lord Cobbold:

Day: Have we paid for World War Two?

Cobbold: No.

Day: Have we paid for World War One?

Cobbold: No.

Day: Have we paid for the battle of Waterloo?

Cobbold: I don’t think you can exactly say that.

But a Conservative Chancellor may wish to show that not all of any increases in spending will be financed by borrowing. Whilst many groups are suffering from high energy prices heavily driven now by the Ukraine crisis there is one group which is clearly benefitting – energy companies.

Their costs of production have not increased significantly but the price of oil and gas has so they are making exceptional profits. There is a case for a windfall tax on them. The political problem is that this is what Labour has proposed, but this policy option should not belong to Labour alone. Conservative Chancellors have levied windfall taxes on banks and on energy companies in the past. And the Chancellor could broaden the base further than Labour. There could be other tax measures too – a tax on the sale of ultra-high-value mansions for example?

So I hope we see help for those under pressure and perhaps other spending as well. And if it costs a lot it should be funded not simply by borrowing but also by a tax on the energy companies who are doing well out of the crisis. But we must promise not to call it a Budget.