JRF - Do leadership candidates plans match the scale of the coming emergency in the cost of living?

From: Think Tanks
Published: Tue Aug 09 2022


  • Government's support package only half of what is now needed as rise in the cost of living for lowest income families predicted to increase to over 2,500
  • JRF is urging both candidates to be the UK's next Prime Minister to bring forward a large support package doubling the help to the worst-off families

The latest analysis carried out by the independent Joseph Rowntree Foundation (JRF) shows families needing 2550 to meet extra costs from the current crisis.

JRF is urging the Government to finish the job it has started by doubling the help to low-income families, as price rises to come will mean unnecessary suffering on an immense scale for millions.

Working-age low-income households feel powerless because rising costs mean the 1,200 the Government has pledged doesn't even cover half the costs they'll face this year, according to JRF.

Proposals so far from the leadership candidates are not targeted at those who need the help most:

  • Cutting VAT on fuel - this would help those who use more energy rather than those who need most help with their bills. According to the IFS, it only saves the typical consumer 154 per year - a sum dwarfed by energy bills running to thousands.
  • Reversing the rise in NICs - for every 7 spent on this measure 6 goes to the top half of the income distribution, leaving the worst off exposed to price hikes for essentials.
  • Suspending green levies on energy bills - onlyreduces bills by about 150 a year, again dwarfed by the sums now expected for families this winter.

Katie Schmuecker, Principal Policy Advisor at Joseph Rowntree Foundation said:

Last week the nation was confronted by sobering, and for many frightening predictions from the Bank of England about the months to come. Now that this is rightly at the centre of the battle for number 10, the political debate must lead to swift action which matches the scale of the coming emergency. Failure to respond will put many families beyond having to choose between heating and eating in the run up to Christmas, they will be unable to afford either.

"Every day without a concrete plan to address this glaring gap is increasing anxiety for in low-income families who do not know how they will get through the winter.

The public believe tackling this crisis head on is more of a priority than tinkering with tax policy. The scale of the intervention required could have been smaller if the UK's social security system hadn't been cut back and degraded for more than a decade, leaving many families exposed to economic shocks.

As well as at least doubling the financial support package for people using the benefit system, a simple way to help lots of people quickly is to make debt deduction repayment rates more affordable. This would stop so many falling needlessly into further hardship.

Company: Think Tanks

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