Working bad look at Sunak to soften blow from rising fuel costs in UK

Good things come first, explains Michelle Nicholls, a self-employed cleaner in the English town of Harlow in Essex, just northeast of London, who earns £8,000 a year.

Since food costs hit the escalator and petrol prices soared, the 47-year-old and her partner, who works as a delivery boy and earns £25,000 pre-tax, have had to cut back on weekend trips to see friends and family, as well as occasional nights out.

After that, her dance lessons and field trips for her 13-year-old son follow, Nicholls said. In recent weeks, the cost of her basic weekly shop has risen from £80 to £119.

If the energy bill doubles next month and national insurance premiums go up, she doesn’t know how the family will survive. “There’s not much left to go out and have fun. That’s already squeezed,” she said.

With the economic shocks of the war in Ukraine further fueling inflation, Chancellor Rishi Sunak will be under mounting pressure to find ways to ease the worsening cost of living crisis when he delivers his spring statement next week.

In Harlow, 61% of residents have less than £125 in disposable monthly income © Charlie Bibby/FT

Harlow, where 61 percent of residents have less than £125 in disposable monthly income, has had a particularly hard time, according to the council. The city, which is mainly made up of white working class, has been a parliamentary seat occupied by the ruling party since the 1980s. Incumbent Conservative MP Robert Halfon is a longtime campaigner against fuel taxes.

For low-income people like Nicholls, inflation is a cruel postscript to the coronavirus pandemic. It brings their existence back and causes renewed fear, just as business had opened after two years of social isolation.

“I know they don’t have a magic money tree in Downing Street, but I hope they can help us,” Nicholls said.

Harlow Councilor Dan Swords: ‘There are times when everyone needs help and this is one of them’ © Charlie Bibby/FT

“People don’t blame the government for these problems, but they will if they don’t do something about it,” said Dan Swords, the youngest councilor in Harlow at 21, who helped Conservatives rebuild the traditional Labor council. last May by campaigning for a cut to local taxes.

“There are times when everyone needs help and this is one of them,” he said, arguing that after all the restrictions imposed during the pandemic, there is a greater responsibility on the government to help people regain their strength. come. “Just taking the sting out isn’t enough.”

According to the Resolution Foundation think tank, disposable income could fall by 4 percent or £1,000 for the average family in the 12 months to April 2023. The poorest will be hardest hit as they spend a greater share of their income on food and energy, where prices are likely to rise the most.

Family budgets are feeling the brunt: food inflation is at its highest since 2013, and petrol and diesel prices have hit record levels. But the tightness is set to worsen dramatically from next month through a combination of tax hikes and a jump in average annual energy bills to nearly £2,000, even if wages and benefits lag behind inflation.

The Bank of England warned on Thursday that the effects of Russia’s invasion of Ukraine could push inflation up to 8 percent in the spring, adding that monetary policy was powerless to avert the energy shock that could hit Britain’s income and revenues. spending pressure.

The Institute for Fiscal Studies has calculated that Sunak would have to spend an additional £12 billion to provide the same level of protection against rising prices as he planned when he unveiled a £9 billion package in February to help households with rising energy bills. .

Laura Ciftci, headmistress of Jerounds Primary Academy, sees steady increase in students eligible for free school meals © Charlie Bibby/FT

Siobhan Dean, Learning Support Assistant at Jerounds: ‘There will come a time when people like me have to start selling things’ © Charlie Bibby/FT

The Citizens Advice bureau in Harlow has seen the number of people needing help with energy debts increase by 127 percent since last year. According to Laura Ciftci, head teacher of Jerounds Primary Academy, there has also been a steady increase in students eligible for free school meals.

Halfon has called on the government to cut fuel taxes and cut the green tax on utility bills to ease the pain. He has a track record of similar successful campaigns in the past and was labeled ‘the most expensive MP’ by Prime Minister David Cameron.

“It’s the people who were just managing that have the hardest time. These are not people who sit at home all day on the couch. They work,” he said, arguing that the Treasury should use a £3bn VAT windfall as a result of rising fuel prices.

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Steve LeMay, the retired owner of a large family business in the city, echoed Halfon and called on the government to cut taxes on gasoline. “There will be people who think that if it goes up to £2 a litre, they won’t be able to use their car.”

At Jerounds Academy school, Siobhan Dean, a learning support assistant with a net salary of £1,000 a month, has already decided not to use her car anymore. Her husband, who works in building maintenance, volunteered for a 20 percent pay cut during the pandemic, and the family, with three children, was struggling.

The government, she argued, should force energy and oil companies to save some profits in buffer accounts in good times, to keep consumer prices at sustainable levels during times like these.

Taxi driver Martin Davies: ‘It will be a bit like during Covid. Although you earn more now, the costs take away all your profits’ © Charlie Bibby/FT

“There comes a time when people like me have to start selling things,” she said, adding: “We see families having to choose whether to heat their homes or feed their children.”

Meanwhile, inflation undermines the economic rationale of some jobs. Taxi drivers at Harlow train station were desperate. Martin Davies, who has been driving a taxi for 15 years, said that with a diesel price of £1.79 a liter he needed to earn £550 a week to break even after paying the taxi company and renting his car. Still, his customers were squeezed and made less use of taxis.

“It will be a bit like during Covid. Although you earn more now, the costs absorb all your profits.”

This post Working bad look at Sunak to soften blow from rising fuel costs in UK

was original published at “https://www.ft.com/content/6f6eed94-8e3d-4346-86cd-38cabf2b81ca”