BEN WILKINSON: Time to face reality, Rishi – before the cost-of-living crisis turns into a catastrophe
Rishi Sunak does not have long left to avert a cost-of-living disaster the like of which has not been seen in this country for nearly 50 years.
The toxic mix of high inflation and low wage growth ground the country to a halt in the 1970s and recession reigned.
The economic turmoil ran deep and the nation was brought to its knees. Perhaps the key difference in 2022 is that we are seeing all the warning signs now and there is still time to act.
Pressure: With food and fuel prices soaring Chancellor Rishi Sunak’s is adding to financial misery with a 1.25% National Insurance hike
The biggest blow to our personal finances will be skyrocketing energy bills, which will rise by 54 per cent next month and could double before winter comes around again.
Food and fuel prices are also soaring, with inflation expected to cost the average family well over £2,000.
Another huge burden coming our way is the 1.25 per cent National Insurance (NI) hike, which will cost the average household around £600.
This squeeze on the nation’s spending could not come at a worse time — and is entirely avoidable.
Next Wednesday’s spring statement is a chance for the Chancellor to give the country some well overdue good news and bring in a meaningful package of support for those who are now living in fear of rising energy bills and food prices.
The Daily Mail’s campaign to Spike The Hike has repeatedly made it clear that the new tax is becoming increasingly impossible to justify.
The Government has squandered billions during the pandemic and can surely afford to hold off for a year.
Budgets are all about political statements. The freeze on income tax thresholds is a devastating stealth tax, but it is complicated and therefore easier to sneak in.
The hike in NI, however, is a simple, straightforward attack on our household incomes.
Ditching it or delaying it for a year would be an easy win and a crowd-pleaser for Rishi.
But he’ll need to go further to help the millions of pensioners stuck on fixed incomes which are being decimated by inflation. If the average energy bill does hit £4,000 by the end of the year, heating homes will become unaffordable for the masses.
Rishi’s £150 council tax rebate and £200 loan won’t even scratch the surface.
Without action, this crisis will soon turn into catastrophe. And it will spell disaster for this Conservative Government.
Car (and care) free
Last year, after one brutal repair bill too many, my wife and I decided to scrap our dated Ford Focus and not replace it.
We immediately saved close to £1,000 in road tax and insurance bills, and received £350 in cash from the scrapyard.
It has been (fortuitously) a smart move. Secondhand car prices have risen by close to 30 per cent and petrol costs have soared to record highs.
At the risk of sounding insufferable, all our journeys are now made either by bike or by public transport.
Train and bus tickets are expensive, so we think twice before making a journey.
And for now, having seen the benefit to our monthly budget, we are in no rush to get behind the wheel again.
The new breed of convenient car clubs will help those who, like me, can live without a motor on their drive.
Yet I’m lucky. Millions of drivers can’t afford to scrap their car. They need one to get to work and face isolation without it.
But with petrol and diesel prices rising, it seems we have a long way to go before driving becomes affordable again.