This may destroy them, a cost of living explosion such as few have known in their lifetimes. The £350 of support for most households, announced today by Rishi Sunak, the chancellor amounts to only a fraction of the extra bills heading towards most households. It came on the day that the Bank of England raised interest rates, and on the day Shell boasted of a “momentous” 14-fold rise in its profits to £12bn. Labour’s promise of a windfall on soaring energy company profits never looked more prudent.
Expect people to understand all too well that these easements Sunak offers are nothing more than disguised loans. This “heat now, freeze later” debt will be clawed back from every future energy bill until 2027 – and prices may rise again. Labour’s Chris Bryant spelled out in parliament why £350 doesn’t “touch the sides” of the problem for his constituents in Rhondda: household costs are increasing by £2,875 a year, he said, in a constituency where the average wage is £27,000.
How crafty to shift some of the payment of this temporary relief on to local authorities, through the rebate on council tax bills. Prof Tony Travers, of the London School of Economics, warns that as this is just a one-off, when council tax bills soar next year the blame is likely to fall on hard-pressed local authorities, not on Westminster. “Many councils will try to make more cuts to keep that rise down,” he tells me – but there is no more to cut.
Just before the 2010 election, I first heard a soon-to-be Tory minister tell colleagues with glee they would “devolve the axe” to councils – and so they did, with local authorities bearing the brunt of austerity. In this week’s “levelling up” white paper, with its lyrical evocations of localism in Jericho and a hymn to the Medicis, Gove absurdly promised to “turbo-charge the whole of the country” on less than a shoestring. He said nothing of the last decade’s devastation of local libraries, swimming pools, bin collections and pothole repairs. Labour’s Lisa Nandy says levelling up would make up for just £1 for every £13 lost by councils since 2010. “We get a partial refund and they expect us to be grateful.”
Everything about this energy policy is wrongheaded. The Social Market Foundation and the Joseph Rowntree Foundation want any subsidy delivered as cash directly into people’s pockets – £500 to all on low incomes on universal credit, which was an efficient way during the pandemic of paying out that £20 uplift (and then snatching it back). It’s greener and more dignified to give people money to spend as they choose, not forcing it on to their energy bills: with out-of-work benefits their lowest for 30 years, hard-pressed families may need to choose to spend less on energy and more on other necessities.
I regularly keep in touch with the Big Help project in Merseyside’s Knowsley, one of the very poorest authorities in England, with seven food banks and 11 food clubs. Toni Bell, one of the managers, says already existing price rises are drawing in more full-time workers who have never asked for help, often needing debt advice as well as energy vouchers and food. Rock-solid Labour Knowsley has had no levelling up money to date, unlike many wealthy Tory seats, such as Sajid Javid’s Bromsgrove, which was given £15m.
Here’s the question: are public attitudes changing towards the poorest in society, as British Social Attitudes has recently begun indicating? Nearly half of households on universal credit have suffered what’s politely called “food insecurity”. That means sometimes going hungry, as Marcus Rashford has described so movingly about his childhood. One in three children now live below the poverty line, according to the government’s own report, 700,000 more since 2012. That’s been a hard fact for most people to believe: one in three children you see in the street. Really?
Just possibly, the price shocks this year, felt by almost everyone, will bring home to more voters how severe poverty is in Britain. Maybe the experience will put an end to brutal Benefits Street-style TV shows and imagery of feckless layabouts, with Middle England itself feeling the pinch. The reason so many children half starve, have no holidays or treats and lack the basics to share the same ordinary lives as schoolfriends is quite simple: not enough voters care enough about it. Could that be on the turn now? Might the Tories in their callousness find themselves on the wrong side of history, wrongfooted by a surge in public sympathy?
I note a story from this week in the Bournemouth Echo: “Dorset MP questions food bank use as numbers rocket.” The local food bank reports a 43% rise in the number of clients. But Poole’s MP, Sir Robert Syms, said: “Well, I’m a bit surprised because at the moment unemployment continues to fall and the economy is continuing to grow and I can’t see any particular reason why [the number of food bank users] would pick up … I can’t see yet how energy bills would have made that much of an impact on people’s finances.” The news story went on: “Sir Robert added he would ‘have a word’ with the Department for Work and Pensions to see if there were more people applying for help.”
Well, as MP for the millionaires of Sandbanks he may not know much about the DWP, and his Dorset is among the regions that have had the fewest cuts in the last decade, while Liverpool has had the most. There’s a lot of levelling up to be done, not least in hearts and minds and Tory attitudes.
Polly Toynbee is a Guardian columnist
