As millions of families get ready to choose between starving and freezing, the biggest question in British politics right now is what government support is going to come in the next few months, and who exactly is going to get help. With Boris Johnson’s “out of office” on, and the current chancellor missing in action, it is left to the Tory leadership candidates to play at governing. On Sunday, the all but guaranteed victor, Liz Truss, announced she would “rush through” her £30bn worth of tax cuts six months earlier than planned, to “tackle the cost of living crisis”.
It doesn’t take an economist to realise that, far from “tackling the cost of living crisis”, introducing tax cuts is a dire way to target support: it just adds more cash to upper middle-class families’ pockets while the very poorest – many of whom pay little or no income tax – don’t benefit. Just look at the details of Truss’s £30bn cut: £19bn of it would go not to struggling families, but to businesses skirting corporation tax rises. Indeed, even Truss’s plan to scrap the national insurance rise would benefit the wealthiest: 85% of the £8bn cost would go to the top half of earners. It is Titanic economics, where the country is sinking and only the rich get a life raft.
As inconvenient as it is for a party that has spent years running down the benefits system, common sense says one of the best ways to help people most vulnerable in a cost of living crisis is to bolster social security. After pressure from charities, ministers have pledged to increase benefits next April by this September’s rate of inflation. But by then, prices will have rocketed again, and families will have been left to get through a cold winter alone. Analysis shows current government energy support schemes for low-income households will leave them up to £1,600 a year short. In light of this, the National Institute of Economic Research recommend urgently increasing universal credit by at least £25 a week for a minimum of six months from October – as well as increasing the energy grant to low-income families – as the most efficient form of state spending. If legacy benefits were also included in the rise, the move would simultaneously reach low earners, family carers and disabled people unable to work (who will disproportionately suffer with rising energy costs).
Against this clearcut case for strengthening the social security system, it is telling that the Tory leadership candidates have been busy discrediting “people on welfare”. When asked how she would help families struggling with rising bills, Truss framed her choice to cut taxes as being better than “giving out handouts”, as if state support was a gift from the benevolent rich rather than an entitlement funded by society. Her team later tried to backtrack, but the anti-welfare dog-whistle was loud enough for all to hear. At a recent hustings with Conservative party members, Sunak meanwhile pledged “to get much tougher on welfare” if he were to win, and said inflation was rising because there were “too many unemployed people”. Back in reality, UK unemployment is actually at its lowest level in 50 years, while about 40% of universal credit claimants are in work.
Those MPs eagerly pitching for a cabinet post in the new government have been just as willing to demonise the poorest for power. The former candidate Suella Braverman vowed to tackle the “stubborn” unemployed who “refuse” to get jobs, while Kemi Badenoch blamed “family break-ups” for housing demand (not the lack of social housing, naturally). A decade on, the Tories are back using George Osborne’s old “skiver v striver” playbook: the easiest way to get the public on side for failing to help people in poverty is to convince them that they don’t deserve it.
This would be grim at the best of times, but it is grotesque in the current climate. Benefit rates in the UK are at their lowest level in 50 years – at £77 a week, the basic rate for those over 25 is a meagre 13% of average pay. This follows a decade of benefit sanctions and freezes, which have left many families in a crisis of insecurity relating to debt and arrears, and worsening physical and mental health. Ahead of the winter, local councils are already planning “warm banks” – public spaces, like libraries, where impoverished people can go to avoid a freezing home. The idea that this impending socioeconomic emergency will be alleviated with tax cuts for the middle classes is as impractical as it is immoral.
The scale of the crisis ahead will not be solved by changes to the benefits system alone. The “energy furlough scheme” proposed by the Liberal Democrats on Monday, under which the government would fully absorb the cost of the £36bn price rise, is a rare example of politicians grasping the emergency that we face. Back in January, the Joseph Rowntree Foundation predicted single adult households in poverty would have to spend half their income on energy after the April price cap rise. With new projections suggesting the average annual household energy bill will reach £3,359 later this year, the Conservatives refusing to at the very least sufficiently increase people’s benefits starts to look less a matter of ideology than outright cruelty. A national catastrophe is coming, and the candidates to be Britain’s next prime minister are stuck peddling nasty divisions from the past. Life rafts may be on the way but, as it ever was, the poorest will be left to drown.
Frances Ryan is a Guardian columnist
