More than two million people have missed or defaulted on at least one bill, rent or mortgage payment in the last year. The new research from consumer group Which, published on Wednesday, is another sign of the social emergency facing working class people.
Almost 60 percent of people surveyed said that their household had to make cutbacks or dip into savings to cover essentials last month. It’s a significant hike on the 40 percent a year ago—and the poorest workers are paying a heavy price.
Some 64 percent of people in households with an income of up to £21,000 said they’d had to make cutbacks. One woman on a low income of under £21,000 says “the prices of everything are rising so steeply”. “But wages and benefits are not,” she told the researchers from Which.
“My wages have gone up by about £10 a week yet my petrol has gone up by £40 a week. And the cost of a food shop feels extortionate! There’s no extra money coming in but the amount going out is increasing at an alarming rate.”
The cost of living crisis is hammering working class people’s living standards across the board. Another worker on a middle income of £28,000 to £34,000 added that the “value of personal savings is being eroded by inflation”.
At the same time as inflation rises, British capitalism remains stagnant after the shock of coronavirus and the war. A report from the Bank of England on Wednesday warned that the “economic outlook for Britain and globally materially”. This means households will “become more stretched over coming months” and “they will also be more vulnerable to further shocks”.
But the Tory government, the Bank of England and bosses have only one answer to this deepening cost of living crisis.
The Tories’ new chancellor Nadhim Zahawi has said he’s “determined to do more” to slash taxes. “I want to be one of the most competitive countries in the world for investment,” he said.
For the Tories, being “competitive” means a race to the bottom that only benefits the corporations and more attacks on working class people.
Meanwhile, Bank of England chief economist Huw Pill said on Wednesday that the central bank will “act forcefully” to push down inflation to 2.2 percent. He hinted that this “faster pace of tightening” would likely mean far steeper interest rate rises. Such a move would help push up unemployment—in the hope of disciplining workers into accepting lower wages.
Pill—who worked at banking giant Goldman Sachs—had previously said workers had to suffer a real-terms pay cut this year to get inflation under control. He claimed that if workers “try to maintain real wages, the more likely it is that domestically generated inflation will achieve its own self-sustaining momentum”.
Yet this upsurge in inflation is driven by higher profits—not a mythical “wage-price-spiral”—and the war in Ukraine. The Russian invasion sent shockwaves through the world economy, disrupting gas and food supplies. And then, in order to protect or even boost their profits, bosses have tried to hike their prices.
The new figures underline the need to build on the success of the RMT union’s three days of strikes on the railways last month. The RMT should call more strikes, and other union leaders should mobilise for a fightback to win inflation-busting pay increases. And, if they don’t, rank-and-file activists have to push them into action.
The party’s over for Boris Johnson, the Tories are weak and divided, the bosses fear workers’ anger—now is the time to strike.
There's a big list of Scottish strikes
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