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Temporary support will not end the cost of living crisis – we need a long term strategy

Temporary support will not end the cost of living crisis – we need a long term strategy
3 min read

At a recent Treasury Select Committee hearing, the governor of the Bank of England warned of an "apocalyptic” situation with food prices fast approaching. This is on top of the doubling of energy costs currently driving many to wonder how they will cope.

Over one million more people will fall into absolute poverty this year - including 500,000 children. In my Wallasey constituency, I meet pensioners scared to turn on their heating, patients discharged from hospital worrying that they can’t afford to plug in medical equipment ventilators or refrigerate their medication. I’ve met food bank users who won’t take fresh food because they can’t afford to cook it and mums skipping meals to feed the kids.

After months of inexcusable delay, the government finally announced a package of support. Claiming Labour’s windfall tax as their own, they announced Cost of Living Payments funded by a tax on the huge unearned profits of gas and oil companies, and a U-turn on the previously repayable Energy Bills Support Scheme – now doubled and turned into a grant rather than a loan.

Dragged kicking and screaming into action by over five months of pressure from Labour, this package coincidentally arrived just the day after Sue Gray’s report on the Downing Street parties – it seems this government has a remarkable knack of finding money exactly when they need a diversion from yet more prime ministerial wrongdoing. 

They have a habit of blaming the poor for being poor rather than searching for workable solutions

Whilst action from the government is welcome, it is too little too late. Without a long-term strategy to tackle the causes of the crisis, their package is little more than a temporary remedy.

The package comes from the very same Chancellor who claimed only weeks ago it would be “silly” to introduce additional support before autumn and whose backbenches contain MPs who believe that families reliant on food banks “cannot cook properly” and “cannot budget”. They have a habit of blaming the poor for being poor rather than searching for workable solutions.

Labour would’ve introduced an Emergency Budget alongside our windfall tax, outlining a long-term strategy to tackle this crisis: an end to the National Insurance hike, a cut to business rates for small businesses and most importantly plans to grow and protect our economy for the future. Without long-term energy security, this crisis will not end.

Despite the Chancellor’s claims, the majority of his £37bn package will only compensate for the £35.4 billion in personal tax rises he has introduced over the last two years. If the government were serious about cutting bills for families, they would’ve tackled the shocking £11.8 billion lost to fraud and error through Covid schemes. Chasing this down would’ve freed up almost exactly the quantity of money their ill-thought-out National Insurance hike will bring in.

If we are to tackle the energy crisis for the future, action on green energy security is essential. For too long Britain has lagged behind on renewables. Labour would double our onshore wind capacity and triple our solar capabilities by 2030, whilst investing in home insulation to both cut bills and reduce reliance on gas imports. The energy market is in desperate need of regulation - consumers cannot continue to suffer whilst companies line their pockets and play hard and fast with the rules.

Labour has laid out clearly how we would exit this crisis. The government might’ve finally pulled their heads out of the sand, but without a long-term plan to match, the cost of living crisis is far from solved.

 

Angela Eagle is the Labour MP for Wallasey.

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