As we continue to emerge from the pandemic, we are faced with global inflation caused by the world economy beginning its recovery.
As economies are re-opening following the lifting of coronavirus restrictions, people are spending again leading to higher demand – especially for goods, rather than services – whilst factories are trying to get back to normal production, meaning lower supply. That therefore means higher prices for ordinary goods such as food and clothing.
Pressure is also being driven by the cost of energy, a result of a record rise in global gas prices over the last six months, with wholesale prices increasing by five times compared to last winter.
Yesterday, Chancellor Rishi Sunak addressed the House of Commons on what steps he could take to try and limit the impact that global inflation will have on UK households. Of course, the Government is somewhat limited in the face of these worldwide problems which are affecting every country; however certain steps have already been taken.
These steps including reducing the Universal Credit taper rate (an extra £1,000 for 2 million families), increasing the National Living Wage, freezing fuel duty for the twelfth year in a row, and launching a £500 million Household Support Fund to help the lowest-income households with their bills.
And the chancellor went further, announcing a three-part plan to help with household bills immediately. This includes: A £200 ‘smoothing’ rebate on energy bills for all households, to be paid back over the next five years; A non-repayable £150 cash rebate for homes in Council Tax bands A-D (something which 80% of homes will benefit from); and £144 million of discretionary funding for local authorities to support households not eligible for the council tax rebate.
These are going to be challenging times, but we aren’t alone. Inflation is rising in countries in Europe as well as the United States. Inflation in the Eurozone is at the highest on record: up to 6.1 per cent in Spain and 5.1 per cent in Germany; while it has increased to 7 per cent in the US – the highest in 40 years. UK inflation currently stands at 5.4 per cent.
But measures announced by the Government are aimed directly at supporting those who need help the most. I know that the opposition have called for a cut in VAT – but reducing VAT would not give targeted support and would equally benefit the wealthiest households, with a family in a 5-bedroom detached house saving far more money than a family living in social housing. Instead, our progressive support would go directly to those who need it the most and would see over £1 billion more in support than a cut to VAT.
I know that families will be concerned and as somebody who grew up with bailiffs at the door, I absolutely get it. That’s why myself and Robert Buckland MP continue to ensure we raise concerns on behalf of residents so that where possible Government can provide support to those in Swindon who need it the most.
Throughout the pandemic, the Government made sure that Covid support was targeted at those most in need, whether through furlough, direct grants, food payments or help with rent/mortgage payments. This progressiveness does not stop now, and we will continue to ensure that our growing economy will always support the most vulnerable.
