Historic cost of living crisis is going to affect us all – Christine Jardine MP

Even the weather seemed to have turned against us this weekend as the new financial year and rising fuel bills arrived in the midst of a cold snap.

On Friday morning, households up and down the country were totting up what the combination of a raised fuel cap, rocketing energy prices and inflation at its highest for decades would mean for them.

It is not a happy picture for any of us, but for some it will be particularly bleak.

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It was no wonder that, in the face of this onslaught, energy companies reported unprecedented numbers of customers recording meter readings in an effort to minimise the impact.

I wish that I was confident that it will make a significant difference for those to whom it will matter most.

My inbox is already heaving with people who are worried about how they, or a family member, will cope with increases which will take the average household energy bills to around £2,000 a year.

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There was scant comfort for many families in the Chancellor Rishi Sunak’s Spring statement. The £50 a year we could save from his fuel duty cut seems paltry in comparison to the £600 that would have been the typical benefit from the cut in VAT which he rejected.

Chancellor Rishi Sunak's response to the cost of living crisis has left him looking out of touch (Picture: House of Commons/PA)Chancellor Rishi Sunak's response to the cost of living crisis has left him looking out of touch (Picture: House of Commons/PA)
Chancellor Rishi Sunak's response to the cost of living crisis has left him looking out of touch (Picture: House of Commons/PA)

Similarly the targeted support that could have been available from a one-off windfall tax on the multi-national corporations which have benefitted from the combination of crises that have been visited on us will not happen.

And as if to rub salt in the wound, the National Insurance increase kicks in, more than a million people are pulled into paying income tax and pensioners are denied the increase that the coalition’s ‘triple lock’ would have guaranteed to keep up with inflation.

There was a very hollow ring to our out-of-touch Chancellor’s assertions on TV that it is simply not possible to do everything that people want.

At least some of the measures that could make a difference would have been very welcome. And some indication that the government is not completely out of touch.

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That detached view was not helped by the government minister on TV on Friday morning moaning about the cost of running his new electric car.

If the aim was to empathise, it didn’t quite hit the mark when we all now know that we are heading into the most costly and difficult period for households since the 1970s.

The assertion that this generation of youngsters will be the first to be less well off than their parents is one we have, sadly, become used to.

But now it doesn’t seem to matter where you stick a pin in the age demographic, the prospects are not good whether you are 25, 65 or 85.

Those of us who came from working-class backgrounds and started work in the mid-1980s were lucky enough to have access to housing, mortgages and private pensions that had not been easily available to our parents.

In our late 20s, all of my friends who wanted them had mortgages and cars. It became a cliché in those days to say we had all the things our parents wanted for us.

Now we find ourselves wondering if our own children will have all the things we took for granted. I don’t know many 20-somethings nowadays who can afford a mortgage without relying to some extent on the bank of Mum and or Dad.

One thing we wouldn’t have wished for them was the high mortgage rates and inflation we knew. But now it seems is coming around again. And it will be a shock for those who have no memory of double digit inflation or mortgages.

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Ironically many of those who enjoyed the best of those aspirational years are also now approaching, or have reached, retirement age and are wondering if it will now be what they had anticipated.

For those relying on state pension, the government’s decision to abandon the triple-lock, championed by the Liberal Democrats and guaranteeing their payments would keep up with inflation, this will be a tough year.

The basic state pension increases by 3.1 per cent this year, which is September 2021’s projected inflation figure.

Inflation is now expected to average out at 7.4 per cent this year, which would have been the triple-lock increase for pensioners, so that the real situation, based on the lower figure, means state pensioners will face a cut of £309 a year. And while the Tories claim that they will bring it back when the crisis is over, the damage will have been done by then and another generation of pensioners will be playing catch-up with inflation.

For thousands of women, of course, there is the added complication of an ever-shifting state pensionable age which has made financial planning close to impossible.

Even those who were lucky enough to put away a private pension will now be wondering what damage has been done by the hit the stock market has taken, particularly from the war in Ukraine.

The vast majority of families, of course, find themselves worrying about both their children and their parents.

How will they keep the house warm, the car running, feed the children and make sure their parents are OK, whether they still live in their own homes or have moved into care.

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None of us will escape except perhaps a handful of the super-rich.

But it should be the responsibility of our government to do what they can to ensure that they provide that insulation for the rest of us.

So far. Not so good.

Christine Jardine is the Scottish Liberal Democrat MP for Edinburgh West

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