Truss and Sunak still haven’t grasped the magnitude of Britain’s cost of living crisis
Britain is facing a cost of living crisis this winter more brutal than any in living memory. Annual energy bills for the average household are set to hit £300 a month from October, almost double the current level. Spending power will be sucked out of the economy as millions of households struggle – and fail – to make ends meet. The courts will be clogged up with people prosecuted for falling behind with their payments.
That’s the situation facing the two hopefuls slugging it out to be the country’s next prime minister, yet neither Liz Truss nor Rishi Sunak yet seems to have grasped the magnitude of the problem, in public at least.
Truss’s contribution to the debate has been a plan to reverse the increase in national insurance contributions Sunak introduced as chancellor and which came into force in April. This would save the median worker – someone smack in the middle of the income distribution – £170 a year. As Sunak’s team rightly note, this wouldn’t “touch the sides” given the likely £1,600 a year increase in the energy price cap.
For his part, Sunak has left himself open to the same “not nearly enough” accusation with his proposal for a one-off cut to VAT on domestic energy bills this winter. That would save the average household £160 a year.
Sunak’s £15bn package in late May cut bills for all households by £400, with additional payments worth £650 for 8 million of the poorest households. This, though was based on an energy price cap expected to be about £2,800 a year, rather than the figure of around £3,600 that will be announced by the regulator Ofgem at the end of this month and come into force in October.
A lot more help is going to be needed and were it not for the fact that Boris Johnson is a lame duck prime
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