LONG READ

2022: The Year of a Cost of Living Catastrophe

Too many people in our society live insecure and precarious lives as a result of low incomes, few opportunities to improve their situation and vulnerability to changes in circumstances which more affluent citizens can barely imagine. Soaring food costs and the energy bill crisis drove inflation to 5.4% in the 12 months to December 2021, up from 5.1% the month before, in another blow to struggling families and the poorest people. 

With the price cap on energy set to be revised upwards in April this year, fuel bills could increase by another 50% in the next few months, typically adding £600/year to bills, a nightmare that’ll throw millions into fuel poverty according to Martin Lewis, the Money Saving Expert. He told the BBC:

“We are going to have to put money into the system or we are going to have an absolute poverty crisis, with people being unable to eat or dying because of the cold”.

At the same time, the Resolution Foundation predicts that the share of English households experiencing ‘fuel stress’ (i.e. spending more than 10 per cent of their household budget on energy) will triple from 9 per cent to 27 per cent, equivalent to an additional 4 million households.

In a long thread on Twitter which reached over fifteen million people, the Bootstrap Cook, Jack Munroe explained the real cost of inflation as it happens to real people with the least money. She gave examples of the rise in prices of everyday staples like bread and pasta:

The cheapest pasta in my local supermarket (one of the Big Four), was 29p for 500g. Today it’s 70p. That’s a 141% price increase as it hits the poorest and most vulnerable households.

The cheapest rice at the same supermarket was 45p for a kilogram bag. Today it’s £1 for 500g.

Jack Monroe has been campaigning about food prices and how the poorest are the hardest hit for a decade now, giving evidence to many parliamentary inquiries and Commissions. The money men, the politicians and civil servants, the DWP etc. have largely ignored her. Now she is compiling a new price index which more faithfully reflects the “insidiously creeping prices of most basic versions of essential items at the supermarket” on which so may depend to stave off hunger. Let us be clear, the problem of food poverty is partly the result of a social security system which is not fit for purpose, which does not protect low income families and households from extreme hardship.   

Food Poverty

Food poverty, has been defined by Professor Tim Lang, Professor of Food Policy at City University London’s Centre for Food Policy as “worse diet, worse access, worse health, higher percentage of income on food and less choice from a restricted range of foods.” In an article for the Guardian he notes that “there’s a staggering gap between rich and poor in terms of wealth and income and therefore access to food.” He continues: “Food is the biggest driver of NHS spending as a result of obesity, diabetes and heart disease.” Food may look cheap, he adds, but too much of it creates vast, unsustainable costs elsewhere”.

The huge growth in charitable food banks over recent years illustrates that many people live precariously on the edge of hunger, or are stuck in long-term food poverty. The Trussell Trust releases twice yearly stats on the number of emergency food parcels they distribute: between 1 April 2021 and 30 September 2021, they gave out 936,000 food parcels to families with children – an average of two every minute, and a year-on year increase of 36%. A record 2.5m food parcels were given out to people in crisis by the UK’s biggest food bank charity during the first year of the pandemic as low-income families experienced what it called “historic” levels of need. The Trussell Trust notes that these figures actually underestimate the level of food aid demand.

Levelling?

By contrast the richest 1% of UK households is worth at least £3.6m each according to new ONS figures released in January while the poorest 10% of households have just £15,400 or less, with almost half burdened with more debts than they have in assets. As the ONS says in this report:

“The wealthiest 10% of households held 43% of all the wealth in Great Britain in the latest period; in comparison, the bottom 50% held only 9%.”

Household wealth - ONS
Household wealth – ONS

Johnson , the soi–disant ‘Leveller’, responding to these figures at PMQs in early January,  wrongly claimed that “inequality is down in this country”. The levelling up agenda, cynically designed to win the Red Wall over, was a cornerstone of the 2019 Tory Manifesto which promised that a Conservative government would unite and level up, spreading opportunity across the whole United Kingdom. We still await Michael Gove’s delayed White Paper to see exactly how this translates into action. With a government mired in sleaze and corruption and now preoccupied with an internal civil war over the future of the Prime Minister tainted by ‘Partygate’, we must wonder if the government has the appetite and energy to pursue this agenda, if indeed it ever had. How will it make life more tolerable for those who cannot afford to eat properly, are fearful of the inevitable energy price increases and have lost hope of any improvement in their lives?

Meanwhile in the ‘affluent’ Cotswolds …

In an area often believed to be highly prosperous, deep within the Blue Wall, the Cotswolds too has its pockets of deprivation and often the poorest have no voice, no representation. It is not all honey-coloured stone cottages nestled in beautiful rolling hills. The local MP, Geoffrey Clifton-Brown is more famous for his fracas at the Conservative Party Conference than anything else. His voting record tells us that he has consistently voted for cuts in welfare benefits. He does not hold constituency surgeries and in 2019 was ranked bottom of a list of MPs based on their openness and responsiveness to their constituents.

Cirencester  Foodbank which spans a wide area from Tetbury in the west to Fairford and Lechlade in the east has four key objectives:

  • To increase its reach to the more remote villages;
  • To reach those unable to travel;
  • To supplement the food parcels with fresh fruit and vegetables and importantly
  • To help clients out of food poverty with its partners, such as the Citizens Advice Bureau.

Its most recent report on Food Poverty in the South Cotswolds highlights the fact that there are growing number of families who do not qualify for free school meals and struggle on low incomes and insecure work.

I have been talking to a few people here in the Cotswolds who through age, ill heath, disability and changing personal circumstances, are on the bread line and fear that they cannot meet their living costs without help.

  • This is Jim

Jim is 89 years old. He was born and brought up in rural Gloucestershire, an agricultural worker for most of his adult life on low wages and with no opportunity to save or pay into a pension scheme. He lives alone on his State Pension. This year the government abandoned the triple lock on pensions). With no savings to fall back on, he pays for his energy with a prepayment pay as you go meter which can be more expensive than a standard credit meter. His home is heated with old night storage heaters which in the winter months need to be supplemented with expensive plug in electric heaters. The house is damp because it is poorly insulated and is not warm enough.

When I get up in the morning, I boil the kettle to fill a thermos with enough water for hot drinks for the day. I do everything I can to keep my energy use down. If I am getting low on credit on my meter, I don’t cook any hot food that day but make sandwiches. I often go to the Library for a few hours because it’s warm there and I can read the papers. I do get a lovely roast dinner once in a while at a local charity which also helped me to get a food parcel from the Foodbank in town when I was really stuck. I always look for the cheapest food when I do my shopping, stuff nearing its sell by date or special offers. I go to bed at 8pm to keep warm in winter with extra blankets on the bed.

  • This is Josie

Josie is in her mid ‘50s and, before being diagnosed with a neuro-degenerative disease 6 years ago, worked in a well-paid job in sales. Following her diagnosis, she has been unable to work and has significant mobility issues. Her sole income is Personal Independence Payments. She lives in a small village without decent public transport so she is very isolated. She had to seek help from a local charity and Citizens Advice in order to attend DWP assessments because the DWP would not accept her reasons (no transport) for wanting to change an appointment.

As I am disabled, I rely on Personal Independence Payments for my income. I had to undergo several DWP reviews, all the way to Swindon, to be eligible for this, a process which was frightening and humiliating.  I did receive an additional £140 off my energy bill in December through the Warm Home Discount but I have now used that up because I had to have heating in the recent cold snap. I just don’t know how I will be able to afford the bills when they rise in April. Another problem is getting about. I had to give up driving because my eyesight is deteriorating. There is a bus to town from my village twice a week so I either have to rely on friends to give me a lift or pay for a taxi. This takes a huge chunk out of the money on which I have to live.

  • This is Tom

Tom is a single parent who works part time as a self-employed delivery driver, part of the growing number of workers in the gig economy.  His reliance on Universal Credit while the children are young creates a precarious and worrying life for him and his family. He would like to find more hours of work to improve his income but the cost of after school child care acts as a barrier. The danger of falling into debt, often being forced to use payday loan merchants is common among this section of the working population. 

I have two young children, one 5 and the older one is 7. My wife passed away 2 years ago so I am their sole carer. I cannot work more hours because I need to collect them from school and look after them full time in the school holidays. Relying on income top ups from Universal Credit has been a nightmare. Waiting for a first payment put me in debt. I often have to borrow money from my parents just to make ends meet, to put food on the table and to buy them shoes and new clothes. My job doesn’t offer regular and secure hours. In October my income fell when the Covid extra payment was stopped. There are very few treats for them, no holidays away, no days out. I feel very guilty that I cannot give them the childhood we wanted for them.

Predominantly rural areas like the Cotswolds share the same social and economic problems and the same inequalities as every other area in the UK. In particular, poor infrastructure, scarce public transport and a lack of affordable housing are significant problems. It’s not all champagne quaffing celebrities and a playground for the rich.

Income down / Prices up

The loss of the uplift in Universal Credit in October 2021 has had a serious impact for the 5.8 million people on universal credit, nearly 40 per cent of them in work. The Joseph Rowntree Foundation,  (JRF) among a whole host of charities opposing the cut, such as Save The Children, estimates that the cut will plunge half a million more people into poverty, including 200,000 children. Families with children, particularly single-parent families, will be disproportionately impacted, that is six in 10 of all single-parent families.

JRF works to solve the persistent levels of poverty in the UK. Their most recent report brings into focus the nature and scale of poverty in the context of the pandemic. Many were already at risk before Covid created such turmoil for us all and were often the hardest hit. Before coronavirus, JRF states that 14.5 million people in the UK were caught up in poverty, equating to more than one in five people. Since 2021, these people have borne the brunt of the impact of the pandemic.

For many the coming price rises in food, energy, Council Tax and rent  as well as an increase in NI contributions and stagnation in wages will make this the year when those ‘scarcely managing’ face a cost of living catastrophe. As the Resolution Foundation think tank points out, the expansion of the welfare state in the post war period is not matched by a rise in the generosity of the basic level of benefits: unemployment benefit in 2022-23 will be at its lowest level in real-terms since 1990-91 and is only slightly above the destitution income level of £70 per week.

True ‘levelling up’ must be focused on breaking the grip of poverty, providing secure well paid work and decent affordable homes for all, and making the social security system fit for purpose so that those citizens who rely on it can live decent lives without fear.

Ed: For advice and help if you are struggling with the spiralling cost of living:
Citizens Advice 0808 223 1133
Money Helper  guidance and support
Age UK offer help and support in local areas
Turn2us provides practical help for people struggling financially
National Energy Action leading fuel poverty charity

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