On 7th November, King Charles III will open the next session of the UK parliament. It is likely to be the last before the general election expected to take place towards the end of 2024.
The King’s speech, written by the government, is the key part of state opening of parliament. It sets out the government’s policy priorities and legislative programme. So what can we expect, or not expect, the Conservative government to do to save its skin?
After 13 years in office and five Prime Ministers the government is spent and is unlikely to reverse any of its economic policies that have resulted in the highest ever public debt of £2.6 trillion (97.8% of GDP) and highest rate of inflation for 41 years.
The government won’t end austerity and real wage cuts. The average real wage is lower than in 2005. 14.4m were living in poverty in 2021/2022. 3.8m people experienced destitution in 2022, including around one million children. In the period 2012-2019, government imposed austerity caused nearly 335,000 excess deaths (nearly 48,000 a year) in England and Scotland.
A government obsessed with privatisation, outsourcing and cuts to public spending may pay lip-service to public investment, but won’t do much to deal with crumbling schools and public buildings. Parts of the National Health Service have been privatised by stealth and the government won’t do much to relieve the healthcare crisis. Some 7.8m people in England are waiting for hospital appointment (1 in 7 of the population). Some .2.6m are chronically ill and unable to work. In the five years to 2022, around 1.5m died whilst awaiting a hospital appointment.
The government is trapped by its subservience to defunct ideologies. It won’t modify Brexit and reach out to Europe to boost investment, trade and jobs. It won’t increase investment in infrastructure. In an OECD league table of investment in productive assets, the UK is ranked at number 35 out of 38 countries.
Perhaps, there was a time when governments declared war on poverty. After all, no economy can flourish whilst masses are in poverty and can’t buy the goods and services produced by businesses. Now, the British state has declared war on low and middle income families.
The squeeze on workers has reduced their share of the gross domestic product (GDP), in the form of wages and salaries, from 65.1% in 1976 to around 50% at the end of second quarter of 2023. Between1980 and 2014, real GDP growth averaged around 2.2% per year and the economy has grown sporadically since then. However, most people have seen little benefit of that growth.
One study estimates that “if wages had continued to grow as they were before the financial crash of 2008, real average weekly earnings would be around £11,000 per year higher than they currently are – a 37 per cent lost wages gap”. The real average earnings are unchanged since 2005.
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The war on the poor cannot provide economic or social stability. It has destroyed lives and inhibited social development. The institutions of government need to listen to saner voices, trade unions and non-governmental organisations to build a fair and just society through redistribution, higher public investment and by freeing themselves from the shackles of neoliberal economics.
Prem Sikka is an Emeritus Professor of Accounting at the University of Essex and the University of Sheffield, a Labour member of the House of Lords, and Contributing Editor at Left Foot Forward.
Domestic energy prices more than doubled during 2022 compared with the year before. This meant that the number of UK households in fuel poverty who could not afford to heat their homes to a safe level rose from 4.5 million to 7.3 million.
The UK government attempted to alleviate the impact of rocketing bills with a package of support measures. This included capping the unit cost of electricity and gas, a £400 rebate to all households using mains gas for heating and £200 for those using alternative fuels, and a further £650 “cost of living payment” to claimants of means-tested benefits.
Many of these schemes ended in spring 2023. And with wholesale gas costs and the government’s energy price cap having come down somewhat, you could be forgiven for thinking that the worst of the energy crisis has passed.
But that’s not the case for many billpayers – in fact, this winter is likely to be worse than the last for many households.
The energy price cap, introduced in 2019 by market regulator Ofgem, limits how much people pay for each unit of gas and electricity. The latest price cap, set on October 1 2023, means that a typical household will pay £1,834 a year for energy – less than £2,000 for the first time in 18 months.
This might sound like good news, but it’s still a substantial increase on the pre-crisis cap. In August 2021, the most a typical household could expect to pay in a year for energy was £1,277.
Although the unit prices of electricity and gas have fallen, there has been a steep increase in standing charges. These are a levy on all energy bills which cover the costs associated with supplying energy to homes.
Standing charges have gone up from around £186 a year pre-crisis to just over £300 now – effectively adding £110 to bills.
Standing charges pay for the upkeep of the UK’s energy supply network. KingTa/Shutterstock
Standing charges are regressive because they are the same for everyone, regardless of how much energy you consume. Poorer households often use much less energy than wealthier ones, so standing charges make up a larger proportion of their energy costs.
The £400 energy bill rebate paid to all households last winter has now ended. Meanwhile, cost of living payments to claimants of means-tested benefits have increased from £650 to £900 a year. This will be helpful to those who qualify, but one third of households eligible for means-tested welfare payments do not claim them due to stigma, lack of awareness or bad experiences with the assessment process, and so will receive no assistance.
Many households who do receive these cost of living payments will spend it on other expenses, such as food, rather than heating their home. This reflects the fact that energy is often seen by struggling households as something that can be rationed.
If you’re in a household that does not qualify for the cost of living payment then the savings of around £150 that resulted from the lowering of the cap will soon be more than cancelled out by the lack of a rebate.
Cold homes can kill
Despite the financial support offered last winter, average levels of energy debt for people contacting Citizens Advice in England and Wales have risen sharply over the last year, from around £1,400 per household on average in March 2022 to £1,711 in July 2023. One-third of UK energy customers are now in arrears.
So although energy bills have fallen slightly, many households are less resilient to financial shocks than they were in early 2022. Volatile energy prices are predicted to last until the end of the decade.
Research last winter found that households in fuel poverty were underheating their homes, causing damp and mould that can create serious health problems and exacerbating anguish and stress. The health risks of a cold home increase with repeated exposure.
As temperatures begin to fall again, a range of measures are urgently needed to prevent a crisis worse than that of last winter.
What can be done to help?
Since energy prices are expected to remain high for years, long-term solutions are vital. There must be increased investment in efforts to insulate the UK’s leaky housing stock. But with winter just weeks away, what can the government do right now?
To start, it could offer greater energy bill rebates. Given the scale of the fuel poverty problem, eligibility for these rebates must be wide enough for anyone on a below average income to receive help.
Alternatively, the government could make the rebates universal again, and potentially recoup the costs by increasing taxes on the most wealthy or energy company profits. At the very least, unclaimed energy bill support from last winter should be used to support those likely to struggle in the coming winter, rather than being returned to the treasury.
Cut funding for government-backed advice services could also be restored. And there are reforms to the retail energy market that could be implemented fairly quickly, such as bringing standing charges in line with levels of usage.
More fundamentally, there are a number of proposals that would be fairer than the current system and could be implemented together for maximum impact. These include a “green power pool”, which would ensure that the cheap power generated by renewables such as wind and solar benefits those most in need first and foremost, social tariffs (discounted energy bills for low-income households), or a national energy guarantee that would secure access to enough free energy to meet everyone’s basic needs.
The government’s forthcoming autumn statement must not sidestep these issues if people in fuel poverty are to stay safe and warm this winter.
Don’t have time to read about climate change as much as you’d like?
New research shows household debt has hit five-year high
BRITAIN’S energy crisis is “growing by the week,” campaigners warned today after research found that household debt has hit a five-year high of £216 as winter approaches.
The number of homes already owing money to their energy provider is up 11 per cent on last year, according to a survey by comparison website Uswitch.
Of those in arrears on their gas and electricity bills, 40 per cent say their debt is higher than last year and 28 per cent believe their position is about the same as 12 months ago.
Almost one in seven say they have gone from being in credit a year ago to owing money now.
More than half of households are worried about how they will pay their energy bills this winter and 49 per cent say they will wear extra layers of clothing at home so that they can manage with less heating.
And 25 per cent say they will not turning their heating at all, even when it is cold.
Tory Chancellor Jeremy Hunt condemned after announcing harsher welfare sanctions in an ugly resurgence of its austerity-era ‘shirker’ rhetoric
UK Chancellor Jeremy Hunt. (He always looked pinned to me. )
BRITAIN is on course for the lowest benefits rates since records began, a new report found as the Tories were yesterday condemned for announcing harsher welfare sanctions in an ugly resurgence of its austerity-era “shirker” rhetoric.
Chancellor Jeremy Hunt told the Conservative conference the government is replacing the work capability assessment and examining the sanctions regime.
Save the Children UK branded his claims that 100,000 people are leaving the labour market every year for a life on benefits were based on a “complete fallacy.”
The charity’s head of child poverty Becca Lyon said: “In fact, the so-called ‘safety net’ of universal credit is so low that 90 per cent of low-income households are regularly going without essentials like regular meals, a hot shower, or heating.”
