UK cost of living surges, dwarfing Sunak’s one-off payments

Simon Whelan

Household energy bills will grow 23 times faster than wages and 38 times faster than benefits by the end of this year, according to research published yesterday by the Trades Union Congress (TUC).

October’s scheduled £800 rise in fuel bills—on top of April’s 32 percent increase—means gas and electricity bills will have risen by 119 percent in just one year. By contrast, wages will have increased by just 5.2 percent, while benefits will have risen by only 3.1 percent.

(Credit: PxHere)

Chancellor Rishi Sunak’s £15 billion Cost of Living package will make barely a dent in the cost-of-living crisis engulfing tens of millions of people.

14.5 million people are living in poverty, according to the Joseph Rowntree Foundation. Data from Loughborough University reveals that goods and services for a typical family with two young children are about £400 a month more expensive than they were last year. Rising energy prices added another £120 to families’ monthly costs, with cheaper tariffs ended.

While the Johnson government has claimed that “work is the best route out of poverty”, 57 percent of impoverished Britons—some 8 million people—are already in work. Wages are lower now than in 2008, with the Office for Budget Responsibility predicting that pay will not return to pre-2008 levels until 2025.

“If real weekly wages had continued growing at the pre-2008 rate, they’d now be £111 per week higher than they are”, the TUC found. Public sector pay fell by £30 in March alone, while average weekly earnings fell by £16 per week. These figures are a staggering self-indictment of the TUC and its affiliated unions that have presided over 17-years of outright wage suppression—the longest wage freeze on some measures since the Battle of Waterloo.

Delivering his package of measures on Thursday, Sunak declared, “no government can solve every problem, particularly the complex and global challenge of inflation.” But the surge in energy and food prices is a direct outcome of policies pursued by capitalist governments to enrich the financial oligarchy.

Surging corporate profits are responsible for 60 percent of increases in inflation, according to a recent report on global income inequality published by Oxfam. The charity found that corporate profits grew more during the pandemic than in the previous 23 years, as governments directed trillions of “bail-out” funds into the coffers of the banks and corporations.

This year’s Sunday Times Rich List showed the wealth of the top 20 entrants grew by £30 billion in the past 12 months and has more than doubled in the past 10 years. The High Pay Centre (HPC) that monitors the income of top earners, reported this week that if household wealth had grown at the same rate as the top 20 Rich List entrants since 2012, every UK household would be £205,000 better off.

The HPC commented, “Imagine the difference that the £30 billion increase in the wealth of the top 20 people on the list could have made if invested in hospitals, schools, green energy, public transport or support for the world’s poorest countries, rather than accruing to people who were already billionaires anyway.”