Britain’s cost-of-living crisis pushes millions to the brink

“Everything is increasing,” she told CNN Business during a visit to The Boiler House, which provides discounts on food, shoes and fuel stamps in a red brick building in a public housing complex in east London.

“Milk cost 80 pence ($1.05). The smallest one cost £1 ($1.31),” she said. “Bread – the cheapest bread we used to make for £1 – is down to £1.20 ($1.57).”

Average wages for workers suffered their biggest drop in more than seven years in the three months to January, down 1% from the same period a year ago, adjusted for inflation, the UK Office for National Statistics said on Tuesday. And the war in Ukraine has driven energy prices even higher, with petrol and diesel prices soaring to new record levels in recent days.

Youth and community space Boiler House opened its food pantry during the coronavirus pandemic. Unlike a traditional food bank, guests browse and buy their own groceries, paying £6.50 ($8.50) to receive about £35 ($46) worth of food and toiletries.

But the charity’s services have expanded to provide members with shoes and help pay their energy bills as many grapple with their toughest challenges. hit their purchasing power for years.

Davina Maturin, Project Manager at The Boiler House, summed up the dilemma that many face.

“You either keep the house warm, [your] kids don’t get sick? – she said. – Or [you] buy food so they can eat and not be hungry?”

Millions of people’s fuel bills rose in October when the British energy regulator raised the consumer price cap – the maximum price suppliers can charge per unit of energy – by 12% in the wake of the global disaster. gas supply interruptions pushed bulk prices to record levels.
A buyer carries his purchases to Walthamstow, east London on Feb. 13.

On the day of visiting CNN Business in February, Maturin began referring some attendees to fuel voucher programs run by charities that offer up to £49 ($64) to help pay bills. Demand was high, she said.

Monique John, other a regular visitor to the boiler room, told CNN Business she has a smart meter. The device helps her save energy, but her money doesn’t reach as far as it used to.

“You’re just literally looking [the meter] go down and down and down and down and down,” she said.

“There’s just nothing to give”

The worst is yet to come.

In April energy price ceiling will grow by 54% – this is the largest increase in history – burdening 22 million people with an annual bill of around £2,000 ($2,618). Inflation is also expected to top 7% and a new payroll tax to come into effect to help fund health care and social assistance.
Steam and smoke rise from central heating pipes and vents in London in January.

Higher spending could increase the number of “poor” households, defined as those who can’t afford basic necessities, by a third to as high as 1 million, according to an analysis by the National Institute of Economic and Social Research.

Russian invasion of Ukraine last month raised wholesale gas prices especially as global markets panicked about whether sanctions would hit Russian export. Analysts at investment bank Investec say British annual electricity bills after October – the next time the price cap is adjusted – could soar to £3,000 ($3,927) as a result.

“Now there is simply nothing to give from people’s budgets. Now the numbers just don’t add up,” Lucy Bannister, political campaign manager for the Joseph Rowntree Foundation, an anti-poverty charity, told CNN Business.

“Kids are too scared to ask to turn on the heating,” she added. “They really sort of take on the stress their parents go through. They feel hungry and do not ask for a snack.

The government will try to alleviate this pain by cutting local taxes and allowing millions of Brits to spread the cost of paying their electricity bills over the next few years.

A government spokesman told CNN Business that it is “providing about £12 billion ($16 billion) in support this fiscal year and next to help households cover the cost of living.”

The spokesman added that the government would raise the minimum wage by more than £1,000 ($1,309) a year and increase the allowance required by low-income people by the same amount. Both start in April.

Critics say the government’s response has been inadequate and not targeted at those who need it most.

Ian Allinson, member of the executive committee of the Manchester Trade Union Council, who organized a protest against the cost increase. in February called the situation “alarming”. He said the government’s plan to delay energy payments would not help vulnerable people.

“We are shocked when the main measure announced by the government [to bring down energy bills] is that we have to give ourselves credit,” he told CNN Business.

“Many people are already struggling with debt. The very idea of ​​additional debt being levied instead of any real bailout is simply shocking.”

People march through Manchester on February 12 as protests took place across the country against rising electricity bills and the cost of living.
Angry Brits take to the streets. Protesters and the opposition Labor Party called for energy company contingency tax like HELL (HELL) as well as Shell (RDSA)who made billions of dollars last year.

“It’s just outrageous that the government chooses not to do something effective to support ordinary people, but is happy to leave these megaprofits to the companies that are forcing it on us,” Allinson said.

Salaries fail

In a church in north London, piles of food are laid out in a grid on the floor of a small side building. Volunteers pack donated items into bags before taking them to people’s doors.

Cooking Champions, an organization that caters to charitable groups and local businesses, launched a delivery service in April 2020 after the start of the pandemic.

Annalize Moseley is one of the first to receive her purchases. The mother-of-two said that without Cooking Champions she would not have food for several weeks. Thinking about what will happen after April is stressful, she said.

Volunteers from Cooking Champions London create food baskets from donated and redistributed food.

“It’s all on my shoulders to make sure the kids are warm and fed and all that,” Moseley said. “It upset me a little, but you need to continue. Keep trying.”

Moseley receives Universal Credit, a benefit for people who are unemployed or have a low income. The government increased payouts by £20 ($26) per week during the pandemic, but this ended in October 2021. The benefit will increase by 3.1% in April, but this is less than half the expected rate of inflation.

Wage growth I don’t make it either.

Spring Community Hub, a food and clothing bank 15 miles south of London, provides another door-to-door delivery service. Recently, volunteers are helping an increasing number of young and wealthy people.

“We’re seeing more people working, especially people working during these unreliable hours,” CEO Felicia Boshorin told CNN Business.

“When real money comes in, it’s not enough,” she added.

Parents are afraid of September

September looms for parents concerned about the cost of school uniforms. Shirts, sweaters and jackets emblazoned with school logos – mandatory in the UK – can cost hundreds of pounds for a single child.

Every tenth British family got into debt. items needed for school, according to a 2020 survey by charity The Children’s Society. That figure could rise in 2022 — clothing and footwear were the biggest contributor to inflation in January, according to the Office for National Statistics.

Caroline Rice, who lives in Northern Ireland, is ‘afraid’ of the new school year. She is a member of Covid Realities, a research project documenting the experiences of low-income families during the pandemic.

“I can’t afford £100 ($131) for oil, so why would I pay £50 ($65), £60 ($79) for a school jacket?” she said.

Back at The Boiler House, parents come with their kids to browse the shelves of colorful sneakers donated by Sal’s Shoes. Daughter Begum runs up to the white and pink shiny Converse and tries them on.

“Poverty is a loss of dignity if you just get handed out to charity,” said CJ Bowry, founder of Sal’s Shoes.

Shoes Sala Saint Paul Center in Crewe, 16 February.

Its three pop-up stores across the country are designed to give “family shoppers a shopping experience,” she said. “So they can visit these stores and try on shoes, choose shoes and see the range of shoes – but they don’t have to pay.”

Sal’s Shoes has shipped nearly 3 million pairs to 54 countries in eight years, although more and more are being shipped closer to home. In 2021, the charity distributed 48,000 pairs across the United Kingdom, the highest ever.

Bowry said she receives daily calls from school principals asking for support.

“We have principals who are on duty at the playground and then call us because they have literally spotted kids on their playground with their soles slamming into their shoes,” she said.

“Difficulties are harder”

The Bank of England expects inflation to slow down after peaking in April, but high prices I will hang around.

For people who have taken on new debts and past due bills, the scarring effect can last for years.

A study last year by the Joseph Rowntree Foundation found that 4.4 million low-income households began taking out loans or adding to existing debt during the pandemic. Of this number, more than two-thirds were in arrears.

Joseph De Ville, another member of Covid Realities, lives in Cornwall with his wife and three children. A couple of years ago, he went into debt to pay for his mother’s funeral and told CNN Business about his constant struggle to provide for his family.

“This is the part of life that people don’t see,” he said. “We lock them up on credit cards to cope, and then we struggle to pay off our debts because [of] interest rates — because we have to take out high-interest credit cards just to get by.”

For more than a decade, the real incomes and living standards of millions of Britons have fallen. For DeVille, the rising cost of living is just the latest chapter in a protracted crisis.

“Difficulties are harder,” he said.

Leave a Reply

Your email address will not be published. Required fields are marked *