Tag Archives: cost of living crisis

Forget cutting VAT: social tariffs would help tackle the cost-of-living crisis

The cost-of-living crisis should be the number one priority for all political parties this summer. With the energy price cap due to rise by an eye watering 70%, on top of the 54% rise earlier this year, a cruel winter beckons, one that for some, make no mistake, will be fatal.

Martin Lewis, the Money Saving Expert, has spent the summer pleading fruitlessly for solutions from government. Meanwhile, Labour has chosen to squander their time arguing about whether the Shadow Cabinet should join the picket lines of those on strike.

There is a huge space for the Liberal Democrats to propose powerful, radical policy that will make a real difference to those that need it most.

A temporary cut in VAT, to be debated at Autumn Conference as our headline solution, is not that policy.

I’m no great fan of VAT, but timing is everything and the timing of this cut is wrong. On straightforward grounds of fairness, to give away the most to those who already have the most – as cutting a tax on spending would boil down to – is simply perverse right now. Moreover, both the Institute for Fiscal Studies and the Institute for Government warn strongly against the policy, citing the prolonged inflation and interest rate rises that will likely result as serious long-term risks for the economy and households.

Posted in Op-eds | 24 Comments

Women’s Aid highlights impact of cost of living crisis on women experiencing domestic abuse

Steep rises in the cost of food and energy are hard enough to deal with if you are on a low income. If you are in a situation where you are not safe at home, the impact is so much worse.

Women’s Aid have published the results of a survey of women who have experienced domestic abuse and the results make terrifying reading.

They found that:

Almost all survivors (96%) responding had seen a negative impact on the amount of money available to them as a result of cost of living increases. 

Two thirds (66%) of survivors told us that abusers are now using the cost of living increase and concerns about financial hardship as a tool for coercive control, including to justify further restricting their access to money. 

Almost three quarters (73%) of women living with and having financial links with the abuser said that the cost of living crisis had either prevented them from leaving or made it harder for them to leave. 

It is hard enough to leave an abusive partner and it is awful to think that there are even more barriers to women reaching safety because of the current economic situation.

Women’s Aid call for the following:

An Emergency Domestic Abuse Fund to support  survivors of domestic abuse through this crisis period, to pay for essential items and energy bills. 

Reduced energy costs for all refuges during the cost of living crisis, for example by extending the remit of Warm Home Discount Scheme to include refuges;

Better provision of legal services for survivors; reduce the impact of legal aid costs for survivors; fairer access to legal aid and other advocacy services and interest-free loans for legal support where necessary.

Their Chief Executive, Farah Nazeer, said:

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Five Policies for a Manifesto: In Case of Snap Election, break glass

There’s been a lot of speculation, before and following the fall of Boris Johnson, that there could be a snap General Election this year – initially that Johnson himself might call one as a final desperate throw of the dice; later that whoever is new Tory leader would see the economic prospects as increasingly dire and go for a personal mandate to give themselves five years to try to ride out the coming Winter of Discontent. 

Both Rishi Sunak and Liz Truss have now ruled out an early election. But they’ve promised a lot of other things they cannot deliver too.

So it would be wise to be thinking about what we want to see in a Liberal Democrat manifesto.

A snap election would be dominated by the cost of living crisis, so I’ve given some thought to how we might address some of the “freedom from poverty, ignorance and conformity” with particular emphasis on the “freedom from poverty”, and looked a little to Maslow’s famous pyramid of needs.

Everyone will come up with their own answers. These are the answers that I thought of. 

1st Food and Water: 

No one should starve in this country. 

We will introduce a national basic income so everyone will have some means to feed themselves. We will include extra allowances based on need for medical equipment. 

We will protect and value our farming and fishing industries, and rebuild our relationship with the EU, our closest and largest market for buying and selling food, to lower barriers and bring down food prices.

We will invest in development of new vertical farming and hydroponics, for a food production and security and to reduce the pressure on intensive farming methods.

Britain is a famously rainy island but embarrassingly short of water.

We will address water-resilience through addressing the issue of losses through leakage, new reserve reservoirs, and de-salination plants. 

We will end the discharge of sewage into our rivers and beaches.

2nd Warmth and Light: 

We will build onshore and offshore wind turbines and tidal lagoons to provide sustainable low-cost electricity for all. We will make energy the new UK cash crop. 

With our mix of wind and tide power, Britain should have more than enough renewable energy supply to provide for the needs of the UK and more.

We will invest in and build new forms of power storage, including pumped water (like Dinorwic) compressed-air under-sea storage, molten salt/sand technologies, and battery storage to create a new National Grid for the 21st century, so that British companies can become the dominant players in what is obviously going to be one of the biggest markets in the world.

3rd Shelter: 

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Universal Credit – reform, repeal or revolution?

I ought to start off with what might be described as a confession. I rather welcomed the concept of Universal Credit when it was first mooted – the notion that you might combine a number of different benefits, with different application processes and eligibility criteria, into one benefit, struck me as a bit of a no-brainer. I am, after all, a bureaucrat. And, from a user perspective, simplifying what was necessary to establish a claim could only help more people to get the support that they were due.

But what happened next was the inevitable result of deliberate underfunding and a failure to ensure that the systems were in place and fully tested before being rolled out. What followed was a slowly unfolding nightmare for everyone involved but mostly for those who needed a working system most, the claimants. Higher taper levels for earned income destroyed the incentive to seek work, maladministration and a punitive sanctions system meant that claimants suffered from a complete lack of support when they were at their most vulnerable. And sadly, little has changed. The temporary £20 per week increase during the pandemic made a sizeable difference to many, but reversion to the previously existing arrangements, combined with the surge in inflation and energy costs, has thrown hundreds of thousands of households into crisis.

So, what is to be done? Can you fix the Universal Credit system, or should it just be burned to the ground and a new start made?

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Davey: We’ll work with others to out this indecent government

In a podcast interview for Politics Home, Ed Davey said there is no formal pact with Labour but it was simply rational behaviour for both parties to put their resources where they have the best chance of winning.

He said the Lib Dems intend to take on Labour in areas where we can think we can beat them.

The interview also covered Partygate, the economy and the cost of living crisis, Tiverton and Honiton, and Lib Dem values.

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Farron: Farmers at sharp end of cost of living crisis need support

Writing in The House yesterday, Tim Farron said:

British farming communities are a crucial cog in the cost of living fighting machine. But farming families themselves are facing an even more acute cost of living emergency.

He said input costs are spiralling making crops and livestock more expensive to produce. In 12 months, the price of animal feed has shot up by 60 per cent. In some cases, fertiliser prices have quadrupled because production uses gas. Twelve months ago, a tonne of ammonium nitrate fertiliser cost £280 – it now costs £1,000.

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Ed Davey calls for Windfall Tax on energy companies to help people cope with rising prices

Ed Davey went on BBC Breakfast this morning to call for a windfall tax on energy companies as BP announced soaring profits for the first three months on this year. Funds raised would be used to give people who are struggling with high bills “a really big tax cut.” Ed said that the Conservatives were totally out of touch with what was going on in the country.

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Daisy Cooper highlights failure of Government to support 2 million pensioners

As Boris Johnson showcases his lack of understanding about the problems vulnerable people are facing as energy and food costs soar, Lib Dem Deputy Leader Daisy Cooper has highlighted that 2 million pensioners will not qualify for the Government’s Council Tax rebate.

The Prime Minister’s interview on Good Morning Britain was a further embarrassment for the Government. Susanna Reid told him about Elsie, a 77 year old pensioner, who gets just the basic State Pension and whose energy bills have gone up from £17 per month to £85 per month. She doesn’t qualify for the Council Tax rebate. She is eating just one meal a day and is spending her days travelling on buses to keep warm. Johnson’s first reaction was to congratulate himself for introducing the bus pass that Elsie was using and he had nothing else to offer her to make life easier for her.

Daisy Cooper was quick to highlight that there are over 2 million pensioners who, like Elsie, won’t benefit from the Council Tax Rebate. It is worth reminding ourselves that this is just £150 which barely covers 2 months of Elsie’s fuel increase.

Daisy said:

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