01 June 2022

A Welcome Lifeline: a response to the cost of living support package

Despite my cynicism, today is a momentous day! With UK inflation at an eye watering 9% and a week of prevaricating, refusing to offer additional assistance with the “Cost of Living Crisis”, on 26 May 2022, Chancellor Rishi Sunak u-turned, announcing his £15 billion support package for households on the lowest incomes.

With the energy price cap set to soar to £2800 in October, it’s clear the removal of the temporary £20 Universal Credit (UC) uplift in September 2021 despite the ongoing Pandemic was ill-advised. The Chancellor is absolutely right to throw struggling households an additional lifeline to keep them afloat in such unprecedented times - funded via an albeit temporary 25% Energy Profits Levy aka  “Windfall Tax” on oil & gas companies’ obscene profits.

Everyone appears to benefit; folk like me & the other 1.9 million recipients of legacy benefits alongside those in receipt of UC - a total of approximately 8 million of the lowest income households. The original £200 repayable energy rebate announced in the Spring Budget has been scrapped, doubled to £400 & no longer has to be repaid; a relief, as my neurological condition worsens when I am cold, but I’ve avoided switching the heating on.

The needs of people in receipt of disability benefits, typically those that incur higher costs due to their conditions have finally been recognised. The “one off” £150 payment will help my son fuel his Motability car, allow me to ensure my mobility scooter remains charged & ready to go thus  maintaining our independence, whilst millions more will be able to ensure vital equipment stays switched on rather than having to choose what to cut back on.

Having received a £150 council tax rebate as part of the initial Cost of Living Support package, plus an additional £25 from my local Council’s Household Support Fund (HSF) will help counteract the doubling of my energy firm's monthly direct debit. It’s good to know the HSF will be extended from October until March 2023 to support folk through Winter.

However, disparities remain. The Joseph Rowntree Foundation states that during the Government’s decade-long era of austerity prior to the pandemic, the number of people living in poverty has risen to over 14 million; 7 million living in households where one or more people are disabled and/or live with chronic ill health conditions.

Whilst the needs of disabled & chronically ill people are finally (!) being recognised, some people are still missing out. Where is the help for the homeless, migrants & asylum seekers when the energy rebate is applicable to all households and is not means tested?

I live in England, benefitting from the HSF. Folk living in Scotland, Wales & Northern Ireland will be supported via their Barnett formula-decided share.Yet geographical differences in the cost of living are not considered. With my eldest son now living in Scotland, I am acutely aware of how expensive it is to live there. Petrol & diesel is prohibitively expensive, despite the 5p reduction in fuel duty. Similarly, folk that solely rely on heating oil will miss out on help with energy payments as they are not covered.

Yet the “Windfall Tax” is a misnomer; oil & gas companies, rather than being penalised, will receive tax relief in order to invest in more oil & gas production, maintaining dependency on fossil fuels rather than renewables for years to come; fuelling further climate change. No such incentives for the electricity sector.

In short; Irrespective of timing, I welcome the Chancellor's intervention. He has exercised the political will necessary to counteract the cost of living crisis, albeit temporarily. It remains incumbent on him to maintain financial stability in what remains an unstable world by making permanent changes, without inadvertently encouraging fossil fuel dependency, so everyone in the UK can weather the future storms to come.

Photo by nrd on Unsplash
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