Tag Archives: living

Cost of living: UK households face £17,200 of debt by 2026

Is this the ultimate failure of the so-called ‘Party of Financial Responsibility’?

Instead of creating conditions in which everybody should be able to manage their own finances in relative ease, instead the Conservatives have dumped the average family into a predicted £17,200 of debt by 2026.

Here’s The Big Issue:

People across the UK will face a record level of debt in the coming years, with the average household expected to owe nearly £17,200 by 2026, according to new analysis.

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The Trades Union Congress (TUC) has warned of a “debt time bomb” as households are set to face a £1,400 rise in credit card and loan debt in 2024. This is an increase of 11% on 2023.

Paul Nowak, the general secretary of the TUC, said: “Every month the Tories stay in office the more families will be pushed into debt. This party of out-of-touch millionaires is more focussed on clinging to power than on growing our economy and getting living standards rising again.”

TUC analysis found that over the course of the next parliament, unsecured debt is set to rocket by £6,000 on average per family.  That includes debt from credit cards, loans and purchase hire agreements, while excluding mortgages and student loans.

“If something doesn’t change, real wages won’t recover to their 2008 levels until 2028,” Nowak added. “These 13 years of economic stagnation have left working people brutally exposed to the cost of living crisis. We cannot afford a Tory government for one day longer.”

It gets worse:

These are shocking figures, but they don’t tell the wider story of the consequences of this debt. Recent research from the Money and Mental Health Policy Institute found that around half of people facing debt have had suicidal thoughts in the last 20 months.

Rob, who spoke to The Big Issue about his experiences of debt and the impact it had on his mental health, said: “It’s the sense of shame that I’m not better at doing this stuff. A sense of being out of control and not being able to manage. There’s the inability to ask for help, because a man my age who had just had a very successful career should be able to manage.”

The TUC estimates that the average worker would now be £14,800 a year better off if their pay had kept up with pre-crisis real wage growth trends since 2008.

Nowak told The Big Issue: “There’s a sense that people are just at the end of their tether. They’ve been working flat-out through the pandemic and beyond, workloads ever-increasing, resources perpetually on the decline, and they’re being asked to do more for less. They’ve hit a breaking point.”

The union body says the sharp spike in debt, along with stagnant living standards, will “more than wipe out” any gains from the chancellor Jeremy Hunt’s cut to national insurance tax.

Source: Cost of living: UK households face £17,200 of debt by 2026


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Do voters really want Labour – or not?

Keir Starmer: his promises constantly turn out to be lies but people seem determined to vote for his party, even though its only confirmed policies are already being inflicted on us by the Tories.

The people of the UK seem to be in two minds about the party that still claims to lead the Labour movement, despite being led by Keir Starmer, a man who has betrayed most of the promises he has made to party members and is soon likely to turn his back on the rest.

A poll by Redfield and Wilton Strategies suggests that almost two-thirds of people do not trust Starmer’s party to handle the cost-of-living crisis (and nobody can blame them, when he offers us absolutely no policies with which to do so):

But polling for Channel 4 News shows Labour would have a landslide victory with around 460 seats if a general election took place now:

Why are people saying they’ll vote for Starmer’s party, even though they don’t trust him to do anything to help them?

One possibility presents itself. But wouldn’t it be depressing if Starmer’s cynical belief that voters have nowhere else to go apart from his shabby STP (Substitute Tory Party) was proved correct?

Then again, polls carried out when election-time rules on neutral reporting aren’t being enforced have been known to reverse themselves dramatically when those rules come into play.

And Starmer has some serious opposition on what he still claims is his own side:

Damo is right: Starmer seems to be selling policy to the highest bidder while the unions and party members dither over whether to abandon him.

Is it because voters (and the unions) see no alternatives?

There are alternatives, of course – but it seems too many people are buying into that hoary old Liberal Democrat propaganda that voting for anybody other than the party that came second last time will let the Tories back in.

The message from this site is simple:

DO YOUR RESEARCH!

Find out who, in your constituency, is putting forward policies that you actually need and support them.

Any policy at all would be better than what Keir Starmer is offering.

Are you planning to vote Labour at the next general election? If so – why?


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The privatised utility rip-off: Vox Political’s 10-year-old words should haunt government

This is actually a little terrifying.

Words I wrote 10 years ago this month are as appropriate now as they were then. See for yourself.

I was responding to Archbishop of York John Sentamu’s comments on chairing a year-long commission to investigate the need for a living wage (something that is still desperately-needed, even though the Tories have hijacked the term and applied it to something that doesn’t pay nearly enough):

In The Observer, he wrote: “The holes in millions of paycheques are being plugged by in-work support to the tune of £4 billion a year. But why aren’t those who are profiting from their workers paying up? Why is government having to subsidise businesses who don’t pay their employees enough to live on? It is a question we need to answer and act on – fast. The cost of living is rising but wages are not. In the rush for profit, and for high pay at the top, too many companies have forgotten the basic moral imperative that employees be paid enough to live on.”

the simple fact is that the cost of living is too high and – if they had to rely on wages alone – millions of working people, up and down the country, would be unable to pay their bills…

… leading us to a recent blog article by our old friend Michael Meacher MP. He points out that our privatised utility companies are forcing every one of us to pay – through the nose – for substandard services.

He wrote: “More than £100 a year of an average household [water] bill, that is about 30 per cent, goes on profit, compared with 9 per cent in the energy sector which is itself known for egregious profiteering.

The profit on water bills is now 35 per cent, we’re told. Energy profits are also huge, although the exact percentage is not easily available.

“In the last 10 years, water bills have risen by a massive 64 per cent, compared with an increase of just 28 per cent in average earnings. In the last three years alone, average earnings have fallen by 7 per cent while water bills have continued to rise remorselessly. There is no competition in the water industry and the only potential constraint is the industry regulator, but he has chosen to succumb to corporate lobbying in allowing water bills to continue to shoot upwards to feed fancy executive bonuses and big dividend handouts.”

And in all the 10 years since, it seems the regulator has yet to grow a backbone.

What were my conclusions? Get a load of this:

1. The privatisation of the national utilities – water, electricity, gas (and, some would say, telecommunications) – has failed in its stated aims, which were to democratise capitalism by making it possible for everybody to be a shareholder, to keep bills low, and to end government subsidies for these organisations. Instead, shares have been drawn into the hands of a very few rich investors, bills have risen far beyond wages, and government subsidies have either increased massively (rail) or companies have used the tax system to avoid paying the amount due on their profits (Thames Water and its ‘super sewer’).

2. Company bosses, keen to drive up their share prices in order to create larger dividends for their shareholders and higher salaries for themselves, have successfully held wages down in order to achieve this. As ‘neilcon’ pointed out, lower wages mean less spending on National Insurance, meaning that keeping the employee payout down by pennies per person leads to many pounds in increased revenue.

3. The government is unwilling to do anything about this because it wants to keep wages depressed as much as possible. This is the reason it has cracked down so hard on benefit payments – not because of fraud (which is minimal) but in order to create an urgent need among the unemployed to find work, and terror in those who have jobs that they could be replaced if they complain about the increasingly meagre pittance on which they are being told to survive.

What’s the answer? (I asked rhetorically.) Here are my thoughts:

The best place to start might be with the private utility companies. An ultimatum to put their houses in order and charge a reasonable amount, rather than extorting money out of a captive clientele, might produce results – especially if the alternative is re-nationalisation.

This might take the pressure off the smaller private companies by actually reducing the amount calculated as the living wage; with lower utility bills, the amount of money needed for a working person’s survival will also drop.

If the government and the utility companies got their sums right, this could mean the need to subsidise working people’s pay would be wiped out, meaning a large saving on the tax bill. Feed this through to working people in the form of a tax cut and, again, smaller private companies would benefit (along with everybody else, of course). An alternative of using the money to help pay off the deficit would be unhelpful – we need more, and healthier, businesses in this country, employing more people. Get that sorted and the deficit will come down in any case.

On a completely different tack, what about Landlord Subsidy (otherwise known as Housing Benefit)? Why not put a cap on rents, thereby ensuring that the government is not subsidising the rapidly-increasing pace of (some) landlords’ greed?

Unfortunately, this is not likely to happen under the current government – and it seems the Parliamentary Labour Party is to keen to become the Plastic Tory Party to take a stand; it will be up to its backbenchers and the party’s grassroots members to force a policy change.

… and isn’t the situation the same today? Sadly, Keir Starmer’s Labour purge means the Substitute Tory Party is unlikely to offer any help at all.

But a plan that acknowledges the mistakes of the past and aims to redress the shocking way that the supply of money has overbalanced to favour a tiny minority – to the detriment of the vast majority – would constitute the first steps on the way to a nation that can not only provide [a] living wage, but also help our struggling small businesses.

Was I right?

I reckon so.

And am I right now?

I reckon so.


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Hey, kids! Oldies in suits just made everything you want more expensive!

Rishi Sunak: the richest man in the UK is the UK’s prime minister. He isn’t affected by inflation or interest rate rises – but he, his government, the Bank of England and businesses are all determined to make sure that you are. How long are you going to sit there and let them mess with you, because you’re “not interested in politics”?

Now do you get why politics should matter to you?

Today (June 21, 2023), we’re all being told that inflation has remained high despite promises from the rich old folk in suits that it would plummet down to more manageable levels.

The reason for this is being touted as high food prices, according to mainstream news outlets like the BBC (UK inflation shock as food costs keep cost of living high) – but this isn’t true. The real reasons are corporate greed and Brexit.

(I know it doesn’t help that the mainstream media keep misleading you. Their job is to distract you away from what’s really happening, of course.)

So the utility firms (energy and water) and the supermarkets are fleecing you by charging whatever they want for goods that they’re actually buying far more cheaply, and this is offsetting the increased costs of importing goods that was caused by Brexit (and the war in Ukraine, although that is a secondary issue now).

The response from the government and the Bank of England is to make everything even more expensive by increasing the cost of money. If you don’t understand how they do this, it’s by raising interest rates on borrowing.

Businesses borrow habitually – for investment, or to finance temporary deficits during hard times, or (as we have learned about the privatised water firms recently) because they are diverting all the money they make into dividends for their shareholders and top executives.

Raising interest rates means the amount they will have to pay back to their lender of choice increases, meaning they have less spending money. Normally this creates a knock-on effect in which they stop buying the goods they need (because they can’t afford them), forcing the suppliers to reduce their prices in order to make sales. As inflation is all about price rises, this means inflation falls.

But that’s not happening at the moment because businesses are simply factoring the interest rate hikes into their pricing structures – they’re passing those rises on to you, the customer.

The result is that prices continue to rise, so inflation remains high.

The economist Richard Murphy explains what has happened in a useful Twitter thread. First, he tells us that the reasons we are being given for inflation are not true:

So inflation is not being caused by influences outside the control of the UK’s politicians and businesspeople. Mr Murphy continues:

Trade unionist Howard Beckett agrees with this, and adds to it usefully:

They’re allowed to do this because our politicians let them. The government could cap prices, but doesn’t want to. Is it because our MPs and their political parties are receiving weighty donations from the businesspeople?

Here’s Mr Murphy again:

So he agrees with This Writer (or more accurately, I agree with him – he’s the expert).

If you’re asking how this has anything to do with you, here comes the bombshell:

But…

The bottom line is that not only have you been deprived of the cash to buy the things that make life worth living (due to cuts that mean your pay is at 2005 – or even 2000 – levels while prices have surged) but you are also now expected to cover the increased prices demanded by the profiteers and the interest rate-setting banks from what is left.

Those are political choices.

Politicians whose own salaries (plus the afore-mentioned corporate donations) mean they aren’t affected by these decisions have used high inflation to take your money away from you.

The reason is simple:

They don’t want you to have any money.

Money provides security, and the lack of it means the lack of security. And an insecure person is controllable; you’ll do whatever you think you must, in order to survive. Right?

The ultimate aim – as This Site and others warned more than 10 years ago – is to put you in a permanent cycle of debt. This provides the fatcats with a population who will work like dogs for peanuts while they reap massive profits. Happy days – for them. Misery for you.

The only way to prevent this is to get rid of the people who are inflicting it on you – and that means using your vote to shift the rot out of Parliament.

Ah, but you don’t vote, do you? You can’t be bothered with politics because it doesn’t affect you.

Take a look in your wallet. Take a look at your bank account. Do you have as much in either as you did last year?

No?

Then politics does affect you. It doesn’t matter if you’re not interested in them; the oldies in the suits are definitely interested in you.

How badly are you going to let them mess up your life before you actually do something about it?


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Brexit to blame for a third of Britain’s food price inflation

The price of Brexit: lorries waiting at Dover for the paperwork to be done.

Would you like to know why this is important?

Britain’s departure from the European Union has accounted for about a third of the increase in food bills for households since 2019, equivalent to about 250 pounds ($316), researchers from the London School of Economics and other universities said.

Although London and Brussels have an agreement allowing largely tariff-free trade in goods, barriers to exports and imports in the form of paperwork, known as non-tariff barriers, have caused delays and higher costs.

The answer is simple, if you remember:

When we were being asked to vote in the EU referendum, back in 2016, we were told again and again that Brexit would reduce paperwork, bureaucracy and red tape.

Remember?

File it as yet another Brexit lie.

Source: Brexit to blame for a third of Britain’s food bill rise, researchers say


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Is this the trigger that will get young people interested in politics at last?

Connection lost: apparently a million people in the UK have cut their broadband connection to save money as the cost-of-living crisis bites. What will young people do, deprived of their escape from the harsh truth of life here in the 2020s?

If as many as one million people in the UK have cut off their broadband connections due to the cost-of-living crisis, does it mean disaffected young people are being deprived of their distractions?

A few days ago, in a different article, This Writer mentioned a friend who is a father, and who deplored young people’s refusal to engage in politics.

He said he saw little that interested the young apart from YouTube shorts and TikTok; anything lasting more than 15 seconds bored them, and they had no interest in society because they feel that society has taken everything that makes life worth living away from them.

So they distract themselves with Internet-based escapism.

And then this happens:

As many as one million people in the UK may have cut off their broadband due to the cost-of-living crisis.

It comes after Citizens Advice, a network of charities helping people with legal, debt and consumer advice, warned that mobile and broadband prices could rise by up to 17% this year.

The charity said its survey showed broadband … was becoming out of reach for greater numbers of households.

This should be exactly the kind of prompt that young people need.

They are losing their Internet connection because of government decisions that have pushed prices through the roof.

That alone should demonstrate to young people that just because they aren’t interested in politics, politicians aren’t going to leave them alone.

That’s if anybody actually stops to explain it to them.

And, presumably, if that explanation can be made in less than 15 seconds.

Source: One million in UK ‘switch off broadband due to cost of living crisis’


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Greedflation again as Shell posts £7.7bn profits for just THREE MONTHS

The astonishing level of oil giant Shell’s profits for the first three months of this year is appalling enough, when you consider the extortionate prices that corporation charges for its products.

Add in the fact that this money will be handed out to corporate executives and shareholders, and we see that the Tory talk about pay rises for nurses and doctors (for example) being inflationary is bunkum; the fatcats are raking it in and we see no inflationary pressure:

Some say that this profit is a good thing, because much of it goes into pension funds for (as an example) nurses.

But of course, nurses could contribute more to their own pension funds if they weren’t forced to pay huge energy bills. And the dividends do go to private shareholders as well.

Others have tried to be smart by asking how much of this profit has been generated in the UK. The answer, though, is simple: too much. UK prices are higher than elsewhere, remember – and with no real need for it any more.

So this is a nasty example of the bane of Britain in the 2020s: Greedflation.

The major corporations are charging whatever they like for their products – especially the privatised former public utilities, who know they operate monopolies in particular parts of the UK.

There is no relationship between what they are charging for their products and the cost of providing them.

But the price they charge puts up the cost of living. People have to pay, otherwise they lose the service.

The result? UK inflation has gone through the roof.

And what are the Tories doing about it? They are victim-blaming.

Working people who are struggling to cope are calling for pay rises to accommodate these huge, greed-driven increases in the prices they have to pay, simply to survive.

And ministers in the Tory government are saying they would be responsible for inflation if they receive those increases.

That claim is – well, it’s what Peter Stefanovic describes it as, in this clip:

If you haven’t voted yet, then please take this into account if/when you do. And remember that Labour wouldn’t increase wages either!


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Greedflation: companies are fuelling inflation by overcharging us to build profit

French protesters have stormed the Paris stock exchange: will greedflation prompt the British to do worse?

Whenever the Conservatives tell us wage increases are driving inflation, be aware that they are lying.

Inflation isn’t being driven by wage demands but by greedy companies that are using the cost-of-living crisis to drive up prices and boost their profits.

Take a look at the degree by which food prices have risen:

Claudia Webbe puts the situation – and the reason for it – in a nutshell:

Now read this:

That is what the International Monetary Fund and the European Central Bank seem to have discovered, according to The Guardian:

The IMF and the ECB wouldn’t put it in these terms, of course, but both support the idea that companies are gouging their customers when they can. The non-technical term for what is going on is greedflation.

Companies [are] doing rather better out of the cost of living crisis than workers… The flipside of steeply rising prices but only modestly higher wages [is] that profit margins [have] “surged”.

Unite, one of the UK’s biggest unions, published a report in March that blamed systematic profiteering across the economy for fuelling the cost of living crisis. Energy companies, supermarkets, shipping companies, car dealers and food manufacturers had all cashed in on drought, war, and strong demand after the pandemic to “push prices and profits through the roof”.

The eurozone’s central bank looked at the contribution of profits to inflation over nearly a quarter of century, and found that between 1999 and 2022, profits were responsible for one-third of the inflation rate on average. In 2022 alone, profits contributed to two-thirds of the rise.

But whereas the ECB – from its president, Christine Lagarde, downwards – is fully exercised by the threat posed by greedflation, policymakers in the UK seem far more relaxed. There have been plenty of calls for wage restraint, most notably from Andrew Bailey, the governor of the Bank of England, but far fewer for price restraint… Price controls, of the sort used in the 1970s, are seen as to be avoided at all costs.

Instead, inflation is being controlled by increasing interest rates – which sucks demand from the economy and reduces pressure for wage rises by incurring job losses (meaning that, once again, too many jobseekers end up competing for too few jobs and the bosses can pay whatever they want).

But workers who have taken pay cut after pay cut for more than a decade are close to breaking point and something has to give way soon.

Will we see scenes like what has happened in France over pensions, with protesters storming bastions of capitalism like the stock exchange and trashing it? Will we see worse?

It’s a good question. The British have very long tempers and have put up with a lot – so much, in fact, that nobody knows what they might do if those tempers snap.

It seems likely that, if they do not moderate their own rhetoric and curb corporate greedflation soon, the Tories might find out.


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Now Labour is falsely claiming benefit claimants are stopping others from getting help

Jonathan Ashworth: his claim that a crackdown on benefit fraud could have funded an extra cost-of-living payment is false.

Cast your disgusted eyes over this:

Dr Ryan continues:

It’s true that benefit fraud and error accounted for four per cent of DWP payments during 2021-22 – around £8.6 billion.

But this may be explained by the fact that the Covid-19 crisis was ongoing during much of that time; fraudsters took advantage of the opportunities to claim Universal Credit that the government provided.

For comparison: in the last year before the Covid crisis, 2019-20, the Mirror article states that benefit fraud and error cost £4.4 billion (about 2.4 per cent), so we can see how much it rocketed during the pandemic years.

The Mirror article discusses a Parliamentary report last year (2022) stating that levels of fraud and error in the benefits system were “unacceptably high” and that it “is yet to show any sign of falling back to pre-pandemic levels”.

But that can hardly be surprising, considering the fact that the last Covid-19-related restrictions were not lifted until February that year.

Figures for 2022-23 are not yet available – which is unsurprising as it is less than a week since that financial year ended. It will be interesting to see the estimated level of benefit fraud for that period, compared with the previous year.

It should not be forgotten that the DWP is proactive in claiming back money that has been lost to benefit fraud, and reported savings of £2 billion over the last year due to correcting and preventing fraud and error.

Finally, it should be remembered that the DWP is notorious for underpaying people who are in genuine need. These underpayments amounted to £2.1 billion in 2021-22.

What may we conclude from the facts?

Try this:

The benefit system is almost entirely free of fraud and error, with only around two per cent recorded normally.

Overpayments to fraudsters who entered the system during the Covid-19 crisis are being recovered, with half the amount overpaid in 2021-22 already regained.

Many benefit overpayments are due to errors on the part of claimants whose health conditions make it hard for them to understand the complexities of the system. Those overpayments are caught and claimed back – causing “severe hardship” to the claimants.

The DWP also makes errors that affect payments.

Underpayments to people who deserve more meant £2.1 billion that should have been handed out in 2021-22 was not.

Therefore:

Ashworth’s sums are probably wrong.

But there is another aspect of this that everybody seems to be ignoring:

It doesn’t matter that his sums are wrong because the amount of fraud and error in the benefit system has nothing at all to do with cost-of-living hardship payments.

If the Conservative government wanted to give out an extra £300 payment to those of us who need it, that is what would happen.

It would simply tell the Bank of England to create the money (yes, out of thin air) and that cash would then be spent into our bank accounts at the appropriate time.

Any concerns about inflationary pressures could be eased by taxing a similar amount out of the system. The easiest way would be a wealth tax on the super-rich or corporations, but the way those people are racking up profits at the moment, it probably wouldn’t even be necessary to impose that; an equivalent amount may come back to the Treasury via current tax levels.

So Ashworth’s entire argument is nonsense. He – and the right-wing Labour leadership he represents – should be ashamed of even mentioning it.


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DWP makes it easier to claim disability benefits – if you are dying – after a suspicious delay

Conditions under which people in Great Britain who are likely to die within a year may claim PIP, DLA and AA have been brought in line with those in Northern Ireland, and with UC and ESA. Were the Tories waiting for someone in particular to die in poverty beforehand?

The period of time over which you may claim the top rate of disability benefits (and Attendance Allowance) has been extended by six months… if you are expected to die within a year.

New regulations for the Department for Work and Pensions mean that, from April 3, the definition of “terminally ill” has been changed for the purposes of personal independence payment (PIP), disability living allowance (DLA), and attendance allowance (AA) in Great Britain.

The changes bring those benefits in line with Universal Credit and Employment and Support Allowance, for which they were put in place in April 2022. They were introduced for PIP, DLA and AA in Northern Ireland at the same time.

The definition now refers to someone who is suffering from a progressive disease, who can reasonably be expected to die of that disease within 12 months.

People thought to be in their final year of life may now receive financial support six months earlier than they could previously, under “special rules” that allow those nearing the end of life to get faster, easier access to the benefits, higher payments, and avoid a medical assessment.

In most cases, they will now receive the highest rate of PIP, DLA or AA.

So the question, for This Writer, is simple:

Why were people with terminal illnesses in England, Scotland and Wales required to wait an extra year for this, meaning they would have died before becoming eligible for it? Who did the Tories want to die in poverty?

Source: Changes to the definition of “terminally ill” for the purposes of PIP, DLA and AA | Disability Rights UK