Jon Molyneux: The crisis we face is inequality, not just inflation

·3-min read
The Bank of England
The Bank of England

This week, the Bank of England delivered updated economic forecasts that will be a hammer blow for millions who are already reeling from soaring living costs.

The bank now thinks inflation will keep rising higher and for longer than it previously thought - peaking at 13% early next year.

Other experts, like the Resolution Foundation, think it could hit 15%.

The economists’ answer to this is to - knowingly - bring about a recession, including by raising interest rates to the highest they’ve been in 27 years.

The real-world consequences of this? Energy bills of £300 a month for the average household. Families forced to skip meals. Pay cuts, job losses, and despair for thousands.

All this while the richest few will see growing interest on their savings make them even richer.

This is a full-blown national crisis - but the UK Government is missing in action.

It holds almost all the levers to do something about this - over setting fiscal and monetary policy, regulating the energy market and overseeing most social security - yet it is nowhere to be seen.

Instead, we have candidates to be the next UK Prime Minister putting on a grotesque sideshow for the benefit of out-of-touch Tory party members - fighting over who cares least about human rights and wildly promising to slash public spending, instead of dealing with the unfolding crisis which they’ve helped to cause as Boris Johnson’s cronies in Government.

And let’s be absolutely clear on this point. The UK Government is responsible for the scale and nature of this crisis.

Yes, there are global issues driving food and energy price inflation, but data published this week by the International Monetary Fund showed that the UK is experiencing those more severely and at far greater extremes than almost any other European country.

It showed that while the UK’s richest fifth will experience inflation running at around 7%, for the poorest, it will be more like 15%. That’s because poorer households already spend almost 60% of their cash on food, energy and essential bills - now those costs are set to soar even higher.

On the other hand, in Finland, one of Europe’s most equal countries, the real impact of inflation will be around 4% for both the best and least well-off. In the likes of France, Germany and Sweden the gap between richest and poorest is around 1%, and running at around 5% overall.

The fact is we don’t just have a cost-of-living crisis - we have a deep inequality crisis - but the Tories don’t care about that.

Green councillors will do all we can and we welcomed an update this week on the £3m which was committed in the most recent SNP and Green joint budget to help address the crisis.

That will include £1m help with energy costs, offering top-ups for those on pre-payment meters, and support for fuel write-offs, as well as expanding advice services to increase the incomes of disabled people, lone parents and low-income families.

These are important measures which will protect some of the most vulnerable from the worst impacts of the crisis.

But the scale of this crisis is beyond anything the council can affect and every day the UK Government sits on its hands is another hammer blow to people who urgently need action.

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