Award-winning journalist Mary O’Hara who travelled the length of the United Kingdom when writing her book, Austerity Bites, says she is hopeful that there are progressive, radical solutions to the Cost of Living crisis
Ten years ago, when the then Conservative/Liberal Democrat coalition government decided to unleash a slew of ill-advised austerity measures in response to the global financial crisis, I travelled the country for 12 months to gauge the impact of the policies as they were rolled out.
A word that came up repeatedly wherever I went during those months of interviewing was ‘fear’. While talking with disability campaigners in Northern Ireland in early 2013 who were worried about the draconian changes to the benefits system, one person put it particularly bluntly:
“I think you cannot underestimate the strength of the word ‘fear’. There’s a lot of fear.”
I had hoped – certainly after a decade during which the so-called ‘belt-tightening’ of austerity had unnecessarily pummelled the most vulnerable groups in society – that such stark assessments would no longer be part of the landscape. Yet, here we are in the midst of an extraordinary Cost of Living crisis that has thrust whole swathes of the population into deep financial difficulty, uncertainty – and fear.
Unparalleled hikes in energy bills along with sharp rises in inflation pushing food prices through the roof have knocked people for six. Food price inflation is running at its highest in a generation and in Northern Ireland has broken the 14 per cent mark. And this comes on top of the damage already inflicted by years of austerity, a punitive and ungenerous benefits system as well as unaffordable rents, stagnant wages and insecure employment for millions of people who are in work.
If the campaigning slogan, ‘heat or eat’ became familiar as austerity tightened its grip, we are now in the kind of uncharted territory where families are often not able to do either. Reports coming thick and fast of kids going hungry, turning up at school with nothing in their stomachs – even eating erasers or hiding in playgrounds from the shame of not being able to afford lunch – are a potent sign of just how bad things have gotten.
Sometimes it is downright disorienting to look at the dizzying array of statistics that help build a picture of the dire economic situation. Following the Chancellor of the Exchequer, Jeremy Hunt’s Autumn Statement a ‘typical’ household can expect to see energy bill payments capped at £3,000 a year. That’s a whopping average of £250 a month for those ‘typical’ households.
Meanwhile, the Office for Budget Responsibility has forecast a seven per cent fall in household incomes over the next two years – the largest fall in living standards since records began – along with an increase of more than 500,000 in unemployment. Many small businesses, which employ huge numbers of workers and rely on people spending money with them, are struggling to survive.
The Resolution Foundation has pointed out that average real household disposable incomes are forecast to fall by 7.1 per cent by the end of 2023 – that’s equivalent to £1,700 per household. This is after taking into account Hunt’s steps outlined in the Autumn Statement to counteract some of the worst fallout, such as uprating benefits in line with inflation (10.1 per cent) – albeit not until April.
The backdrop to all of this is an already threadbare social safety net shredded by austerity, and public services buckling under the pressure of cuts and underinvestment rendering them unable to provide the support people need. From jobs to healthcare, to transport to housing, the prospects are bleak.
It needs to be said that the situation the UK is in is not a ‘storm’ that is to be weathered. This metaphor, deployed by far too many in power, is a distraction. It suggests some natural force has hit, to which everyone is equally exposed. As with austerity, the pain is not equally shared.
Also as with austerity we’ve seen over the past year the re-emergence of the (economically illiterate) explanation that the country’s credit card is “maxed out” so there’s no choice but to fill that black hole in the public finances with cuts. The explanation was wrong then and it is wrong now. An economy is not the same as a household budget. There is no such thing as a national credit card.
Multiple crises have collided, some global such as Putin’s war in Ukraine, and some self-inflicted, such as Brexit. But, ultimately, how governments respond to turbulence is a choice. Responding to the global financial crisis with austerity in the UK was not inevitable – it was a political choice. Not staying in the Single Market was a choice. How the government addresses the present predicament going forward is also a political choice.
‘One thing we know for sure is that sticking plaster politics won’t suffice. The Cost of Living crisis is unprecedented in modern times. There are choices to be made, and for everyone’s sake, they need to be the right ones. Fear is not an option’
This current crisis, unlike the upheaval of the austerity years when those in society who most required support – the poorest and disabled people for example – were hit the hardest (and frequently labelled as skivers by the press and politicians) the pain is being felt across the population. (The exception are the very wealthy who have enough of a cushion to take a hit, including from the tweaks to tax thresholds announced by Hunt last November).
People with mortgages have seen repeated spikes in interest rates which, combined with inflation and other financial hits, constitute an enormous shock to the average household. Related to this, many renters face increases they can’t possibly afford as buy-to-let landlords move to offset rising mortgage costs.
However, as strange as this might sound given all of this, the sheer scale of the current catastrophe might usher in an opportunity to consider more radical, progressive solutions.
A clear-eyed assessment would suggest that a radical response is not going to be driven by the Official Opposition in Westminster. However, that doesn’t mean Labour won’t be pushed by public opinion at some point. Labour has been riding high in the polls, mainly due to what the Tories have and haven’t done rather than what Labour are proposing, but, coming out of the winter of 2022/23 with the public battered and exhausted from a ‘perma-crisis’ of financial woes – might something shift? If elected come 2024, could Labour argue that taking more ambitious measures, for example to shore up public services and wages, are part of their mandate?
The optimist could look at the support for unions this past year as an example of shifting sands. If only we’d said ‘enough is enough’ when austerity was first rolled out 10 years ago the scale of today’s catastrophe would be less brutal and the mountain to climb out of it would be less steep.
One thing we know for sure is that sticking plaster politics won’t suffice. The Cost of Living crisis is unprecedented in modern times. There are choices to be made, and for everyone’s sake, they need to be the right ones. Fear is not an option.