AAs millions of families prepare to choose between starving and freezing, the biggest question in British politics right now is how much government support will come in the coming months, and who exactly will get help . With Boris Johnson ‘disappearing’ and the current chancellor missing, it is up to the Tory leadership candidates to play government. On Sunday, almost guaranteed winner Liz Truss announced she would ‘rush’ her £30bn in tax cuts six months ahead of schedule, to ‘tackle the cost of living crisis’ .
You don’t need to be an economist to realize that, far from “tackle the cost of living crisis”, the introduction of tax cuts is a formidable way to target aid: it simply adds more money to the pockets of upper-middle-class families while the poorest – many of whom pay little or no income tax – do not benefit. Just look at the details of Truss’ £30billion cut: £19billion would go not to struggling families, but to companies skirting corporation tax increases. Indeed, even Truss’ plan to scrap the National Insurance hike would benefit the wealthiest: 85% of the £8billion cost would go to the top half of earners. It’s the Titanic economy, where the country is sinking and only the rich get a life raft.
As inconvenient as it may be for a party that has spent years cutting the benefit system, common sense says that one of the best ways to help those most vulnerable in a cost of living crisis is to strengthen social security. Under pressure from charities, the ministers have pledged to increase benefits next April based on the September inflation rate. But by then, prices will have skyrocketed again and families will have had to weather a cold winter alone. Analysis shows that current government energy support schemes for low-income households will leave them up to £1,600 a year less. In light of this, the National Institute for Economic Research recommends an urgent increase in Universal Credit by at least £25 a week for at least six months from October – as well as an increase in the energy subsidy to low-income families – as the most efficient form of government spending. If benefits inherited from the past were also included in the hike, the move would simultaneously hit low-income earners, family carers and disabled people unable to work (who will suffer disproportionately from rising energy costs).
Against this clear argument for strengthening the social security system, it is telling that the Conservative leadership candidates have been busy discrediting “people on welfare”. When asked how she would help families struggling with rising bills, Truss touted her choice to cut taxes as better than ‘handing out handouts’, as if state support was a gift of the benevolent wealthy rather than a right funded by society. His team then tried to back out, but the anti-welfare whistle was loud enough for everyone to hear. During a recent election campaign with members of the Conservative Party, Sunak meanwhile pledged “to get much tougher on welfare” if he were to win, and said inflation was rising because there were “too many unemployed”. Back to reality, unemployment in the UK is actually at its lowest level in 50 years, while around 40% of Universal Credit claimants are in work.
Those MPs eagerly vying for office in the new government have been equally willing to demonize the poor for power. Former contestant Suella Braverman pledged to tackle ‘stubborn’ unemployed workers who ‘refuse’ to find jobs, while Kemi Badenoch blamed ‘family breakdowns’ for housing demand (not lack of social housing, of course). A decade later, the Tories are again using George Osborne’s old “skiver versus athlete” playbook: the easiest way to convince the public that they haven’t helped people in poverty is to convince them that they don’t deserve it.
It would be gloomy at the best of times, but it’s preposterous in the current climate. UK benefit rates are at their lowest level in 50 years – at £77 a week, the base rate for over-25s is a measly 13% of the average salary. This follows a decade of sanctions and benefit freezes, which have left many families in a crisis of insecurity linked to debt and arrears, and deteriorating physical and mental health. Ahead of winter, local councils are already planning for ‘hot banks’ – public spaces, such as libraries, where the poor can go to avoid a freezing house. The idea that this impending socio-economic emergency will be mitigated by tax cuts for the middle classes is as impractical as it is immoral.
The magnitude of the coming crisis will not be solved by changes to the benefit system alone. The ‘energy furlough scheme’ proposed by the Liberal Democrats on Monday, under which the Government would fully absorb the cost of the £36billion price hike, is a rare example of politicians grasping the urgency we face . Last January, the Joseph Rowntree Foundation predicted that poor single adult households would have to spend half their income on energy after the price cap was raised in April. With new projections suggesting the average annual household energy bill will hit £3,359 later this year, Tories refusing to increase social benefits at least enough are starting to look less like a matter of ideology than pure cruelty . A national catastrophe is approaching and the candidates for the post of British Prime Minister are stuck peddling ugly divisions from the past. Life rafts may be on the way but, as always, the poorest will be left to drown.