Exclusive: Charities Demand Urgent Government Action On Cost Of Living Crisis

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(Photo: Illustration: HuffPost; Photos: Getty Images)
(Photo: Illustration: HuffPost; Photos: Getty Images)

(Photo: Illustration: HuffPost; Photos: Getty Images)

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

It comes after Boris Johnson was criticised for unveiling 38 new bills in the Queen’s Speech, with none of them designed to immediately alleviate the financial pain being suffered right now by millions across the UK.

The prime minister insisted the government’s plans would grow the economy and create thousands of new jobs, thereby bringing down living costs in the longer term.

But charities and think tanks contacted by HuffPost UK said ministers needed to take steps straight away as the public deal with soaring energy bills, rising inflation, higher council tax and increasing interest rates.

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

What has the government announced so far?

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

Under the plan, energy bills will be reduced by £200, with the money being repaid in charges over the next four years. In addition, households in bands A-D are seeing £150 knocked off their council tax bills.

This is in addition to other measures including a 5p reduction in fuel duty, reducing the Universal Credit taper rate to allow people to keep more of the money they earn, increasing the national minimum wage, £25 extra a week in cold weather payments and raising the national insurance thresholds.

According to the Treasury, the total cost of the support already announced is £22bn.

Rishi Sunak is under pressure to do more to help with the cost of living. (Photo: Oli Scarff via PA Wire/PA Images)
Rishi Sunak is under pressure to do more to help with the cost of living. (Photo: Oli Scarff via PA Wire/PA Images)

Rishi Sunak is under pressure to do more to help with the cost of living. (Photo: Oli Scarff via PA Wire/PA Images)

Why was the Queen’s Speech such a let-down?

The Queen’s Speech setting out the government’s legislative plans for the next 12 months – delivered by Prince Charles after Her Majesty withdrew over health concerns – contained a total of 38 bills.

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

The prime minister said: “We must remember that for every pound of taxpayer’s money we spend on reducing bills now, it is a pound we are not investing in bringing down bills and prices over the longer term.

“And that if anything, this moment makes clear our best remedy lies in urgently
delivering on our mission to turbo charge 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. (Photo: Alastair Grant via PA Wire/PA Images)
The Prince of Wales delivers the Queen's Speech during the State Opening of Parliament in the House of Lords. (Photo: Alastair Grant via PA Wire/PA Images)

The Prince of Wales delivers the Queen's Speech during the State Opening of Parliament in the House of Lords. (Photo: 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 on an extra package of financial measures to help struggling voters. But as a fiscal conservative, the chancellor will be resisting any such moves at this time.

This probably explains the bizarre 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 say more on the cost of living “in the days to come”, immediately increasing speculation of an emergency budget.

But sources close to Sunak quickly made clear that they knew nothing about it, and insisted no new measures were due before the autumn.

One ally of the Chancellor told HuffPost UK there were “no announcements as far as we are aware”.

They added: “Rishi has always been clear that we would set out plans for support on energy bills for autumn when we know what the [energy] price cap is going to be – but we’re not there yet.”

Does the government have any plan at all?

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

Although no new announcements were made afterwards, it is understood that the PM and chancellor are eyeing a potential tax cut before MPs depart for the summer recess.

Talk of a windfall tax on energy firms’ profits – as demanded by Labour – is also increasing, despite both Johnson and Sunak repeatedly voicing their scepticism about such a move, arguing that it could hamper investment.

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

But critics say those on those on 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 (Photo: Oli Scarff via PA Wire/PA Images)
Boris Johnson chairs a cabinet meeting in Stoke-on-Trent (Photo: Oli Scarff via PA Wire/PA Images)

Boris Johnson chairs a cabinet meeting in Stoke-on-Trent (Photo: Oli Scarff via PA Wire/PA Images)

What should the government be doing right now?

HuffPost UK contacted a range of charities to get their take on the crisis and ask what they believe Johnson and co should do without delay to alleviate the suffering of so many people across the country.

The universal view was that the government should be using the benefits system to urgently target support at those who need it most.

Katie Schmuecker, principal policy adviser at the Joseph Rowntree Foundation, said: “The widening gap between the incomes of the poorest and what they need to afford the essentials is not just something that happens naturally – it is a political choice.

“The chancellor could have used the Spring Statement to ensure that benefits were uprated in line with this year’s very high inflation, and it is not too late to act to protect people from the worst of this crisis. It just needs a political will and speedy action.”

Tom Marsland, policy manager at disability equality charity Scope, said disabled people were already dealing with the increased cost of electric wheelchairs, ventilators or adapted vehicles, before factoring in soaring energy bills.

“The Queen’s Speech was an opportunity to help disabled people, but this didn’t happen,” he said.

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

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

Polly Neate chief executive of Shelter, said: “Housing is at the root of the cost-of-living crisis. Private rents are higher than ever, bills are skyrocketing, and housing benefit is lagging dangerously behind. We’ve heard from renters whose landlords have said unless they agree to a hike in their rent they will be kicked out.

“As a priority, the government needs to end the freeze on housing benefit so people can still pay their rent. It must also scrap no-fault evictions as quickly as possible to prevent more people from losing their homes unnecessarily, and the additional financial hardship that brings.”

Peter Grigg, chief Executive of Home-Start UK, said: “As a minimum, the government should ensure benefits rise in line with the cost of living. Benefits are rising by 3.1 per cent, but inflation is around 8 per cent and prices and energy bills rising even higher.

“So for low-income families this all means an income drop. If we can’t find ways to reduce bills and increase financial support for families, it will be pushing even more parents and children into poverty. Our children deserve better.”

Emma Revie, chief executive of the Trussell Trust, said: “We are calling on the UK government to bring benefits in line with the true cost of living. As an urgent first step benefits should be increased by at least 7 per cent.

“In the longer term, we need the government to introduce a commitment in the benefits system to ensure that everyone has enough money in their pockets to be prevented from falling into destitution. By failing to make benefits 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 said: “A commitment to a new Food Bill would have demonstrated that the government was serious about tackling the problems in the food system and making sustainable long-term action to reduce spiralling food insecurity levels a priority. Families need and deserve more support.”

The economist’s view

HuffPost UK also asked the highly-respected Resolution Foundation for its view on what the government could be doing, but is currently failing to.

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

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

“Another big rise in the energy price cap this October means that further help with energy bills is inevitable. And while further universal support will be welcome, the Government must also target support at the low-and-middle income families who are at the sharp end of rising cost pressures.

“The most effective way to do this is to bring forward the big increase in benefits due next spring to this autumn, or even sooner if possible. This would deliver significant cash support to millions of hard-hit households, hold back rising poverty levels and would carry no long-term cost to the Treasury.”

This article originally appeared on HuffPost UK and has been updated.

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