The Guardian view on the cost of living: a crisis made in Downing Street
One day this week the prime minister promises that help with food and fuel prices will be announced in “the days to come”. The very next morning, one of his most senior ministers, Michael Gove, adopts a scouse accent and orders everyone to “calm down”. Surveys show that more than 2 million adults in the UK cannot afford to eat every day and the cabinet suggests it could help by relaxing the rules on MOTs. You might call this stuff a joke – only no one is laughing.
The government is right to point out that many of the forces driving up the cost of basics are global and affecting numerous countries all at once. But it is also high time that ministers from the party of individual responsibility looked themselves in the mirror and acknowledged how, through their own complacency and carelessness, they have expanded and intensified this crisis. A social emergency is already upon us and yet ministers continue to act as if they have all the time in the world. The result is that this year more people will suffer and starve. Part of the responsibility for this disaster can be laid squarely outside the doors of Boris Johnson and Rishi Sunak.
When the chancellor delivered his spring budget, Russia had already invaded Ukraine. Oil and gas prices were already rocketing. He offered some help to households, but not enough, and promised to cut taxes at some point in the future.
When he gave his statement last autumn, it was already clear that falling living standards were going to be the economic theme that defined not just this year, but this half-decade. The chancellor offered some half measures on universal credit and the rest, and boasted about a budget for “the age of optimism”. Such phrases may have felt good that afternoon in the House of Commons, but not anywhere else – and now they sound frankly hubristic.
Mr Sunak had many chances and faced countless requests to make the pandemic-era uplift in universal credit permanent and to make benefits more generous. He ignored them all. Benefits are rising this year by less than half the rate of inflation and the very poorest members of society are squarely among those being hardest hit. Jacob ReesMogg, among Mr Johnson’s most prominent defenders of late, once described food banks as “rather uplifting”. Given what the Trussell Trust charity reports about the demand for their cans and packets, the minister will spend most of this year in a state of veritable ecstasy.
On the day this administration finally tries to do something meaningful on fuel prices – be that a windfall tax on the oil giants or another policy – let it be called what it is: a U-turn, made late in the day because it couldn’t be bothered to act earlier. And time is of the utmost importance. Economists are already warning that a million households will be in destitution this year – unable to afford essentials such as eating and heating – unless their incomes go up.
The cost of living crisis is often discussed as if it were all about rising prices, but that is only part of the picture. The rest of it is to do with stagnating or falling income, and the average British worker is currently enduring the third squeeze on real incomes in just over a decade. That fact alone underlines what a miserable period this past decade has been for the UK economy, with interest rates at near zero and ministers constantly promising that a boom lay just around the corner.
From George Osborne to Philip Hammond to Mr Sunak, each chancellor has pledged unprecedented investment, exports and growth. What the UK has instead is tepid growth and record inequality. That is a shameful record for the party that has been in power since 2010. You might call it an indictment.