Tory chancellor Rishi Sunak was set to make his Spring Statement on Wednesday as the cost of living crisis hits tens of millions of working class people.But whatever small measures he introduces to alleviate the coming catastrophe, they won’t tackle the roots of hardship and poverty.
Sunak has already shrugged his shoulders, saying, “I can’t solve every problem” and “It’s not going to be easy.” That’s because he won’t interfere with profit‑making or take ownership and control of energy and fuel away from the fat cats. He has hinted at introducing a fuel duty cut to reduce petrol prices at pumps. But a 5p a litre reduction would make little real difference, especially to the one in five households who have no car.
Meanwhile average household energy bills will rise by 54 percent in two weeks’ time to almost £2,000 a year and will increase again to roughly £3,000 a year in October. Reversing the 1.25 percentage hike on National Insurance contributions set to be introduced in April would help relieve the pressure on low-income families.
Instead, Sunak may just raise the thresholds at which people begin to pay the tax. He added that a £200 discount on bills in October—to be repaid with higher bills in future years—“will make a big difference”. It won’t save a penny in what’s paid out eventually.
The reality for millions is parents skipping meals and children going hungry or pensioners keeping the heating off. Some 10 million people are expected to experience fuel poverty.
Analysis by the TUC union grouping shows the government’s decision to suspend the pensions triple lock last September will cost pensioners almost £500 a year.
Since 2011 the triple lock has guaranteed that the state pension rises each year by the highest out of average earnings growth, cost of living increases, or 2.5 percent. But in April the state pension will increase by just 3.1 percent instead of the 8.3 percent due. This costs someone on the new full state pension £487 a year and someone on the full basic state pension £373 a year.
Pensioners are particularly vulnerable to price hikes, as energy bills typically make up 6.6 percent of weekly spending for over 75s. In comparison they make up 4.2 percent of weekly spending for households of all ages.
As ordinary people suffer, British gas and electricity distribution companies enjoy higher profit margins than any other sector. The regional infrastructure networks that transport electricity from power stations to users see profits worth 42.5p on every £1 of sales.
Gas distributors are grabbing a return of 40.5 percent. These fat profits meant regional electricity networks paid out £3.6 billion in dividends to their owners between 2017 and 2021. Gas distribution networks handed out £2.4 billion.
Sunak’s latest message will do nothing to stop prices rising and working people freezing and starving as bosses profit. Ramped up action against the Tories, in the form of strikes and protests, is vital to stopping the crisis for ordinary people spiralling further.
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