Eastbourne declares cost of living emergency

The Independent reports that, at a Council meeting today, Lib Dem run Eastbourne Council will be the first to declare a cost of living emergency.

You may well know Eastbourne as a prosperous south coast town, but much of the local economy derives from tourism, so it has been particularly badly hit by the pandemic.

According to the article:

Eastbourne Foodbank has been the busiest in the UK over the past year – distributing more parcels per head than any other food bank, according to the Trussell Trust network.

Councillor Josh Babarinde said the emergency declaration would help Eastbourne Borough Council work more effectively with charities, as well as offering a “wake-up call” to Boris Johnson’s government.

“We need immediate action from the government – they have to realise that this cost of crisis has become an emergency because of their inaction,” said the Lib Dem councillor.

Josh Babarinde is also quoted as saying:

“I spoke to an elderly lady who said she was going to have to turn off her TV completely, her lifeline, her only company, because of electricity costs. These are awful choices people should not be having to make in our society.”

 

* Mary Reid is a contributing editor on Lib Dem Voice. She was a councillor in Kingston upon Thames, where she is still very active with the local party, and is the Hon President of Kingston Lib Dems.

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12 Comments

  • Steve Trevethan 18th May '22 - 6:01pm

    Ways to tackle inflation:

    1) Cut government tax and duty on energy to levels of 04/2021
    2) Base electricity pricing on average costs from all sources
    3) Cut interest rates
    4) Join the Customs Union and Single Market to cut costs
    5) Stop the trade war in Ireland
    6) Increase benefits and pensions now
    7) Increase minimum wage
    8) Factor in the benefits of keeping people warm and properly fed
    9) Use Q. E.
    10) Invest in green energy now
    11) Create strategic fuel reserves
    12 Stop the B. o E.’s ruinous approach to inflation management
    13) Understand, differentiate and manage the real causes of inflation, including any new ones
    14) Teach politicians some decent, relevant economics

    https://www.taxresearch.org.uk/Blog/2022/05/18/ways-to-tackle-inflation-all-that-needs-to-be-said-in-

  • Chris Moore 18th May '22 - 6:17pm

    3, 6, 7, 9 increase inflation.

  • Steve Trevethan 19th May '22 - 3:03pm

    Might the money extracted by interest go to the bankers and their associates and not into the public purse?
    Might such extracted money be taken from the not rich, who include mortgage payers, who are also known as debtors and given to the rich aka creditors?
    Might Q. E. have been used to address financial matters associated with Covid?
    If so, where is the problem in using it to prevent fellow citizens and their children from going hungry and cold?
    It is hoped that the attached article addresses points 6 and 7?
    Is the economy there to support its society, or is the society there to support its economy?

    https://www.mirror.co.uk/news/politics/six-things-government-not-doing-27002461

  • Chris Moore 19th May '22 - 4:31pm

    I didn’t say I was against the measures: I said they increased inflation.

  • David Evans 19th May '22 - 5:48pm

    Steve, there seem to be a number of contradictions in your list. Those most immediately apparent are:
    12 Stop the B. o E.’s ruinous approach to inflation management
    3) Cut interest rates
    9) Use Q. E.

    Bearing in mind that the B. o E.’s approach to inflation management has been to Use QE to cut interest rates, there seems to be a serious misunderstanding there.

  • Jenny Barnes 19th May '22 - 7:03pm

    “Every complex problem has a solution which is simple, direct, plausible — and wrong.”
    Attributed to various sources including Mark Twain.
    If you want to reduce UK inflation, then there are 3 levers you can pull:
    Increase tax
    Decrease public expenditure
    Increase intersest rates

    Inflation is not just an increase in one price, but the symptom of too much money chasing too few resources – the interventions above reduce the amount of money in circulation and thus the general price level. It’s unlikely that the cost of energy or food would drop in this case – cuts in demand for holidays, eating out, cars and such-like would be the result, contracting the economy.
    To support the poor an immediate increase in Universal credit would be needed, and as that is an increase in public expenditure tax on something would need to increase. Capital gains on housing looks like a juicy target.

  • >If you want to reduce UK inflation, then there are 3 levers you can pull:
    Increase tax
    Decrease public expenditure
    Increase intersest rates

    And none of these have any effect on global markets and the forces that are causing the prices of essential imports to increase…

  • Steve Trevethan,

    Cut VAT should be added to your list.

    Jenny Barnes,

    If inflation is caused by the economy overheating because there is too much demand in the economy then your three ways to cut inflation are the correct ones. (As you say too much money chasing too few goods.) However, our inflation is not caused by an overheating economy, there is still spare capacity in the economy. Therefore doing any of the three things you suggest will make the coming recession worse, because they reduce demand in the economy.

    As Roland points out our inflation is caused by global markets. As most of the inflation is caused by the increased price of energy and oil the best way a government can stop these inflationary pressures getting into their economy is to ensure that the prices for these items do not rise in their economy. An alternative way is to ensure everyone who has to pay the increased prices has the extra money needed. This is much more difficult to achieve. Giving Council Tax payers enough to pay their increased energy bills would go some way to doing this, but other methods would need to be used to get money to businesses to pay for their increased costs and to the public to pay for their increased spending on petrol.

  • Jenny Barnes 20th May '22 - 11:39am

    “The unemployment rate for January to March 2022 decreased by 0.3 percentage points on the quarter to 3.7%. For the first time since records began, there are fewer unemployed people than job vacancies.

    The economic inactivity rate increased by 0.1 percentage points to 21.4% in January to March 2022. Recent increases in economic inactivity have been driven by those aged 50 to 64 years.” ONS https://tinyurl.com/5h5tw99b 11:35 20/05/2022

    I’d say that indicates an economy running hot. Energy and food demand doesn’t change much with price, so reduction in expenditure has to come from discretionary spend – the rest of retail, eating out, holidays, etc. Nor does energy supply, especially as the cost of each marginal unit is increasing, so an increase in demand can lead to large price increases. Not to mention what happens when you try to cut a major supplier like Russia out of the mix .

  • Steve Trevethan 20th May '22 - 12:50pm

    Might we be facing two problems at the same time, which may or maybe not significantly connected?
    One is increasing poverty and the other is increasing inflation.
    Might poverty require the greater/better distribution of money to those in and near need?
    Might inflation need less money going to the very rich, who are increasing in number, as the data on the increasing number of million/billionaires indicates?
    Might tailored detaxation and tailored taxation help?
    Might it be the case that monetary extractions/bank rates only benefit the bankers and their associates, whereas taxation goes into the public purse?

  • Jenny Barnes 20th May '22 - 3:25pm

    Yes. An increase in UC and a tax on property gains might work well. As I said earlier.
    house prices rose 10% in 2021, the average UK house price is a tad under £280k, so on average property owners made £28k last year for doing nothing. The median income in the UK that year was just under £31k, which of course incurs tax, while the £28k is tax free. A 40% tax on the capital gain would seem equitable (£11k). You have to ask “Who is paying that £28k?” and of course the answer is people renting and otherwise without housing. So using that to fund a UC / benefit uplift looks good.

  • Jenny Barnes,

    The UK economy declined by 0.1% in March 2022. I don’t think this is an ‘economy running hot’. The UK unemployment rate is 3.7% as you say. From the end of the Second World War until 1963 UK unemployment rate was below 3%, and until 1970 it was under 3.75%. I don’t consider an unemployment rate of 3.7% as full employment. Five English regions have higher unemployment rates than this.

    North East 5%
    London – 4.7%
    West Midlands 4.6%
    North West – 4.3%
    Yorkshire & The Humber – 4%

    As you say people have to spend more of their money on energy as the price increases and they therefore reduce their ‘discretionary spend’. This is why total demand for goods is reducing. This is why we are heading towards a recession.

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