Exclusive: Charities demand urgent government action on cost of living crisis

Major charities have demanded that the government take immediate action to help people struggling with the cost of living crisis.

It comes after Boris Johnson was criticized for introducing 38 new bills in the Queen’s Speech, none of them designed to immediately alleviate the financial pain that millions of people across the UK are suffering right now.

The prime minister insisted that the government’s plans would grow the economy and create thousands of new jobs, thereby lowering the cost of living in the long run.

But charities and think tanks contacted by HuffPost UK said ministers needed to take action immediately as the public grapples with rising energy bills, rising inflation, higher council taxes and rising of interest rates.

They warn that unless they do, the minis risk turning a crisis into “a national emergency”.

What has the government announced so far?

In February, Rishi Sunak unveiled a £9bn package of measures to help reduce energy and council tax bills.

Under the plan, energy bills will be reduced by £200 and the money paid back in charges over the next four years. Additionally, households in the AD bands are seeing £150 removed from their council tax bills.

This comes on top of other measures including a 5 pence reduction in the fuel tax, lowering the Universal Credit rate reduction to allow people to keep more of the money they earn, raising the salary national minimum, an extra £25 a week in cold weather payments and increased national insurance thresholds.

According to the Treasury, the total cost of the support already announced is 22,000 million pounds sterling.

Rishi Sunak is under pressure to do more to help with the cost of living.

Oli Scarff via PA Wire/PA Images

Why was the Queen’s Speech so disappointing?

The Queen’s speech setting out the government’s legislative plans for the next 12 months, delivered by Prince Charles after Her Majesty stepped down due to ill health, contained a total of 38 bills.

However, Boris Johnson was at pains to emphasize that there was no new money to help people feel the pinch.

The Prime Minister said: “We must remember that for every pound of taxpayers’ money we spend on reducing bills now, there is a pound we are not spending on reducing bills and prices in the long run.

“And that, in any case, this moment makes it clear that our best remedy lies in urgently
fulfilling our mission to accelerate the economy, create jobs and spread
opportunity across the country.

The Prince of Wales delivers the Queen's speech during the State Opening of Parliament in the House of Lords.
The Prince of Wales delivers the Queen’s speech during the State Opening of Parliament in the House of Lords.

Alastair Grant via PA Wire/PA Images

Does Boris Johnson get it?

As an unapologetic populist, the prime minister’s instinct will be to make a major announcement about an additional package of financial measures to help hard-pressed voters. But as a fiscal conservative, the chancellor will resist such moves at this time.

This probably explains the strange mix-up between Number 10 and the Treasury on the same day the Queen’s Speech was announced.

Johnson told the House of Commons that he and Sunak would talk more about the cost of living “in the days to come,” immediately fueling speculation about an emergency budget.

But sources close to Sunak quickly clarified that they knew nothing about it and insisted that no further action would be taken before the fall.

An ally of the Chancellor told HuffPost UK that “there were no announcements as far as we know.”

They added: “Rishi has always been clear that we would set up support plans on energy bills for the fall when we know what the [energy] the price limit is going to be, but we are not there yet.”

Does the government have any plans?

Johnson chaired a special cabinet meeting on a day off in Stoke with his senior team on Thursday, where the government’s response to the cost of living crisis was high on the agenda.

Although no new announcements were made afterwards, it is understood that the prime minister and chancellor are considering a possible tax cut before MPs leave for the summer break.

There is also growing talk of an extraordinary tax on energy company profits, as demanded by the Labor Party, despite the fact that both Johnson and Sunak repeatedly expressed skepticism about such a move, arguing that it could hamper investment.

We also know that the chancellor will present another financial support package in the autumn, when the energy price cap is expected to rise significantly once again.

But critics say those with the lowest incomes, many of whom are regularly forced to choose between heating their homes and feeding their children, cannot wait several months for the government to step in.

Boris Johnson chairs a cabinet meeting in Stoke-on-Trent
Boris Johnson chairs a cabinet meeting in Stoke-on-Trent

Oli Scarff via PA Wire/PA Images

What should the government be doing right now?

HuffPost UK reached out to a range of charities for their take on the crisis and to ask what they think Johnson and company should do without delay to alleviate the suffering of so many people across the country.

The universal view was that the government should use the benefits system to urgently direct support to those who need it most.

Katie Schmuecker, Senior Policy Advisor at the Joseph Rowntree FoundationHe said: “The widening gap between the income of the poorest and what they need to pay for essentials is not just something that happens naturally, it is a political choice.

“The Chancellor could have used the Spring Statement to make sure benefits increased in line with this year’s very high inflation, and it’s not too late to act to protect people from the worst of this crisis. It just takes political will and quick action.”

Tom Marsland, policy manager for disability equality charity ScopeHe said disabled people were already dealing with the rising cost of electric wheelchairs, ventilators or adapted vehicles, before rising energy bills were taken into account.

“The queen’s speech was an opportunity to help disabled people, but this did not happen,” he said.

“The government must urgently provide more financial support to disabled people directly through the welfare system.

“Disabled people have seen a cut in the real terms of their benefits, as they increase less than inflation. The government has said it will raise disability benefits again next April, but what are disabled people supposed to do for the next 12 months if they can’t afford basics like food and heat? We need to see profits increase in line with inflation now.”

Polly Neate CEO of Shelter, saying: “Housing is at the root of the cost of living crisis. Private rents are higher than ever, bills are skyrocketing, and housing benefits are lagging dangerously behind. We have heard from tenants whose landlords have said that unless they accept an increase in their rent, they will be kicked out.

“As a priority, the government must end the freeze on housing benefits so people can continue to pay rent. It must also eliminate no-fault evictions as quickly as possible to prevent more people from losing their homes unnecessarily and the added financial hardship that comes with it.”

Peter Grigg, CEO of Home-Start UK, He said: “At a minimum, the government must ensure that benefits increase in line with the cost of living. Profits are rising by 3.1 percent, but inflation hovers around 8 percent and energy prices and bills are rising even higher.

“So for low-income families, all of this means a drop in income. If we can’t find ways to lower bills and increase financial support for families, it will push more parents and children into poverty. Our children deserve better.”

Emma Revie, Executive Director of the Trussell Trust, he said: “We are asking the UK government to bring benefits in line with the true cost of living. As an urgent first step, profits should be increased by at least 7 percent.

“In the long term, we need the government to introduce a compromise in the benefits system to ensure that everyone has enough money in their pockets to avoid falling into destitution. By failing to make benefit payments realistic for the times we face, the government now risks turning the cost-of-living crisis into a national emergency.”

Isabel Hughes of the Food Foundation He said: “A commitment to a new food law would have shown that the government was serious about tackling food system problems and making long-term sustainable actions to reduce rising levels of food insecurity a priority. Families need and deserve more support.”

The economist’s view

HuffPost UK also asked the highly respected Resolution Foundation for its opinion on what the government might be doing, but isn’t currently doing.

Mike Brewer, the think tank’s chief economist, agreed with the charities that the benefits system must be mobilized to help the country’s poorest before it’s too late.

He said: “With average incomes set to fall by around £1,200 this year, the tightest fit in half a century, new support will need to be bold.

“Another big increase in the energy price cap this October means more help with energy bills is inevitable. And while more universal support will be appreciated, the government should also target support for low- and middle-income families who find themselves at the sharpest end of rising cost pressures.

“The most effective way to do this is to bring forward the big increase in profits expected next spring to this fall, or even earlier if possible. This would provide significant cash support to millions of hard-hit households, slow the rise in poverty levels, and have no long-term cost to the Treasury.”

Leave a Comment