Gordon Brown has warned Boris Johnson and Tory leadership candidates to address the cost-of-living crisis with an emergency budget or risk condemning millions to “a winter of dire poverty.” The former prime minister and chancellor warned that “a financial timebomb” was about to “explode” in October as fuel prices rose for the second time in six months.
He urged outgoing Prime Minister Boris Johnson, as well as leadership contenders Rishi Sunak and Liz Truss, to agree on an emergency budget this week, threatening to recall Parliament if they did not.
The two candidates have “resorted to claiming the moral high ground” on debt and taxes, but “there is nothing moral about indifferent leaders condemning millions of vulnerable and blameless children and pensioners to a winter of dire poverty,” he said.
Brown’s remarks come on the heels of the Bank of England’s dire prediction last week that inflation could reach as high as 13% in October, far higher than the central bank’s mandated target of 2%.
It also comes as the BBC forecasts that “typical household energy bills will exceed £3,600 per year this winter,” up from an average of £1,400 per year in October 2021. According to Politico’s London Playbook, the figure is “about £550 higher than the regulator predicted in May,” when the government last announced a support package to help households deal with bill increases.
The Guardian reported that more than half of Britons are already “cutting back on their gas and electricity usage at home due to the worsening cost-of-living crisis,” as rising costs disproportionately affect vulnerable groups such as pensioners and the disabled.
According to the Office for National Statistics, an approximately 24 million people in the United Kingdom used less gas and electricity between March 30 and June 19. (ONS).
Charity organizations have also warned that “the magnitude of bill increases” means that many lower-income families will have to choose “between eating and heating their homes this winter” – says The Guardian.
The government’s slew of assistance programs is unlikely to fill the void left by rising costs. According to a report commissioned by Brown and conducted by Professor Donald Hirsch at Loughborough University, the assistance provided to low-income households will not compensate for the losses they face as a result of the cost-of-living crisis, with some families losing up to £1,600 per year.
The government has highlighted the extra support it is providing to households throughout the year, worth approximately £37 billion, but has reiterated that Johnson has “made clear” that any “major fiscal decisions should be left to the next PM,” according to London Playbook.
Conservative leadership candidate Truss ruled out any additional assistance for struggling households, saying she preferred tax cuts and radical economic reforms to “handouts.”
Sunak, leadership rival, hit back at the comments, saying it was “simply wrong to rule out further direct support” for struggling households this winter.
Experts have discussed a variety of solutions to the cost-of-living crisis in recent weeks, according to The Guardian’s economic editor Phillip Inman. Lowering the energy price cap, implementing a larger windfall tax than Sunak proposed as chancellor, introducing more generous benefits, and capping wages in the City to avoid a wage-price spiral are all options.
Support for Don’t Pay UK, a campaign calling for a million households to cancel their energy bills in the face of rising costs, has grown rapidly in the midst of the growing energy crisis. However, charities and legal experts have warned that failing to pay fuel bills could have “disastrous” financial and legal consequences, according to The Big Issue.