Top Tories are panicking that soaring price rises and tax increases on workers’ pay could generate widespread anger.
Some of Boris Johnson’s leading MPs, and newspapers that have slavishly supported him, know that there is mass anger that could sweep over the government.
On Monday the Daily Mail quoted three Conservative MPs who chair select committees all saying the cost of living was the “number one issue facing the prime minister”.
Julian Knight, who heads the Commons digital, culture, media and sport committee, said, “Boris needs to wake up and listen to his party on energy and set a clear path out of the cost of living crisis. In the short term, he needs to abolish the VAT on energy bills and get rid of the green taxes.”
This is arrant hypocrisy coming from MPs who have backed every assault by the Tories on working class pay, benefits and rights. But it does show the extent of their fear.
Jacob Rees-Mogg, leader of the House of Commons, told the cabinet that the national insurance rise set for April could not be justified.
One government insider told the Financial Times newspaper that Rees-Mogg felt that “finding savings would be more frugal and responsible” than raising taxes. In other words, he wanted to attack workers in a different way through cuts.
There’s no doubt about the crisis. The energy price cap, which limits how much people pay, is set to rise from £1,277 a year to around £2,000 just as national insurance goes up.
The National Energy Action charity says around 6 million households will have to choose between paying for heating or spending money on food and other basics.
One widely supported measure, including by the Labour Party, is to scrap VAT on fuel bills.
But VAT makes up only 5 percent of bills, so removing it would take just £8.30 from the typical £166 a month bill from April. That would still be unaffordable for millions of people.
And another “solution” extending the warm homes discount also won’t work. It’s just £140 for the whole of the winter—not £140 a week as Boris Johnson told parliament twice last week.
The whole privatised system is rotten. So far, 26 British energy suppliers have gone bust since the start of August. The government’s response is to try to keep these profit-hungry corporations afloat by bunging them cash.
In December the regulator Ofgem approved £1.8 billion of costs linked to rescuing companies that had gone under. These will appear on household bills in April.
The rescue of Avro Energy, the second largest supplier to fail after Bulb, is so far costing bill payers over £680 million according to Ofgem.
The whole sector should be renationalised under democratic control. Ordinary people shouldn’t pay for company profits, obscene executive pay and bonuses, shareholders’ dividends, competitive advertising and all the other costs of the market.
But whether it’s tax rises or spiralling bills only a major increase in struggle—strikes, protests, occupations and riots—will stop workers paying the price.
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