After almost a year of inaction, the chancellor Rishi Sunak has finally decided to help cash-strapped Britons pay their energy bills. As welcome as his cost-of-living support package is, it is insufficient to meet the financial tsunami engulfing much of the the UK. And it comes far too late.
Firstly, many of the one-off, cost-of-living support payments are split into two, with the first arriving “from July”, 10 months after the government axed the £20 a week uplift to Universal Credit. The second payment arrives in “the autumn”, when the energy price cap is forecast to rise by £800 and the need to live in an adequately heated home is crucial.
Millions of households across the UK are in crisis now, struggling to cope with runaway energy bills, following the 54% increase to the energy price cap in April, and ever rising food prices. The government’s £150 council tax energy rebate was introduced to help absorb some of these increases. Yet, around 20% of those eligible for the rebate – mainly people that do not pay their council tax by direct debit and therefore are the poorest – have still not received their council tax energy rebate. This was supposed to arrive “in April”.
Furthermore, Sunak’s so-called “significant financial intervention” does nothing to address the elephant in the room. Which is that the value of state benefits, which rose by 3.1% in April, is too low to meet basic living costs, let alone keep up with inflation, which is running rampant at 9% and is forecast to soar above 10% over the summer.
All things considered, this suggests that those low-income households that manage to make it through to October, when the second half of the payments arrive, will be plunged into crisis because the energy price cap will rise again. As long as people are forced to live on an income so low it does not cover the essentials, this cost-of-living support package is simply a stay of execution; a sticking plaster that barely covers a gaping wound.
The financial, social and health consequences of the chancellor’s reluctance to provide early meaningful help are enormous. Around 6.5 million households were pitched into fuel poverty when the price cap rose by almost £700 in April, while three out four pensioners are anxious and depressed because they cannot afford to heat their homes and are worried about the rising cost of living.
The cost of dealing with the fallout from the chancellor’s inaction will be millions and will take decades to clear, social commentators have warned. And yet, all this unnecessary suffering could have been averted if the government had simply listened to the clarion calls that were being issued loudly, left, right and centre.
