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The Guardian - UK
The Guardian - UK
Business
Michael Savage Policy editor

‘Negative budgets’: cost of living crisis could lose the Tories dozens of seats

A pile on coins on top of banknotes
Citizens Advice says that about 5 million people are affected by negative budgets. Photograph: Dominic Lipinski/PA

Rishi Sunak has been warned that scores of his most vulnerable seats risk being lost over an increasingly neglected cost of living crisis raging in marginal constituencies across the UK.

The seats held by Iain Duncan Smith and justice secretary Alex Chalk are among 85 Tory constituencies with a critical number of voters whose monthly outgoings are now higher than their income.

The new research comes amid concerns that falling inflation has led to the cost of living crisis dropping down the political agenda, despite households being left with energy bills far higher than they were three years ago and a widening group of people struggling to make ends meet.

The issue of “negative budgets” – where a family’s outgoings are no longer covered by their income – has become a key concern of Citizens Advice, which has been carrying out detailed research on the phenomenon.

While the problem is affecting a wider group of people, the group says there are now more far-reaching political implications for both main parties should they fail to consider radical action.

Its constituency-level research identified 85 seats won by the Tories in 2019 where the MP’s majority is smaller than the number of people with a negative budget.

It is also true of the 100 most marginal seats across Britain overall. It mirrors the regular Opinium polls for the Observer, which continue to suggest that the NHS and the cost of living are by far the most important issues heading into the election later this year.

Citizens Advice said that about 5 million people were affected by negative budgets, while a further 2 million were staying out of the red by cutting their essential spending on things such as meals, energy, and seeing friends and family, to unsafe levels.

The Conservatives have said that they are tackling the cost of living crisis by making two cuts to national insurance, a move they say saves the average worker more than £900 a year from April. However, higher earners save more than those on low incomes.

While Labour has focused many of its attacks on the cost of living, it has been criticised for not producing specific policies to tackle it in the short term, beyond vowing to handle the economy better than the Tories and pursuing economic growth.

Clare Moriarty, a former senior government official who now leads Citizens Advice, warned that falling inflation did not stop the cost of living being the critical factor for voters this year.

“For most of our history, Citizens Advice has seen people in moments of crisis,” she said. “But now, more and more people are stuck in a quicksand of hardship. What would’ve been a shocking level of living standards just a few years ago has sadly become the everyday reality for many in our society.

“Our advice can be life-changing, but our advisers can’t tackle the scale of this challenge alone. Falling inflation doesn’t mean this problem is over. For example, energy bills are still 48% higher than they were three years ago.

“Voters up and down the country want to hear what the next government will do to tackle plummeting living standards. But so far, politicians haven’t done enough to give them hope that any party has a plan to really turn the tide on the issue.”

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