The Bank of England last week published a set of grim economic forecasts that project inflation will peak at over 7% this year and real household incomes will fall by an average of £1,000 by the end of 2022. Meanwhile, the energy price cap will have risen by hundreds of pounds over the same period. Without another Covid wave, it is the cost of living crisis and particularly its impact on families already struggling to meet their rent, put food on the table and pay their heating bills that will dominate people’s lives in the next two years.
Yet Boris Johnson remains mired in the depths of political crisis, debilitated in his role as prime minister, while his potential successors are more concerned with their campaigns to succeed him than addressing the challenges faced by the country. Westminster politics reached a new nadir when, in order to try to shift focus from his own woes, he falsely accused Keir Starmer of failing to prosecute the child abuser Jimmy Savile, a made-up allegation with no grounds in reality. Savile’s victims have spoken out about their distress at seeing their abuse politicised by the prime minister in this way and the unfounded slur prompted the resignation of his long-serving policy chief, Munira Mirza, who accused him of “scurrilous” behaviour.
Johnson is no stranger to misinformation. He has made liberal use of it in the past – the Leave campaign he chaired made claims that the UK Statistics Authority later ruled “a clear misuse of official statistics”, while as prime minister he has repeatedly spread false information, lying about the implications of his Brexit deal for Northern Ireland. The UK Statistics Authority said his claim made in the House of Commons last Monday that crime had fallen by 14% was wrong. But for the prime minister to try to mislead the country about why the victims of a paedophile never saw justice for his own political advantage is despicable and shames the whole nation.
Johnson’s behaviour has been met with a renewed sense of anger among ministers and his parliamentary party. Several senior aides resigned, to be replaced last night by hastily assembled replacements. And his relationship with the truth is now so loose that it is unclear how voters are supposed to distinguish between government announcements that are true or false statements designed to distract from the disintegration of his premiership.
The government’s measures to address the rising cost of energy bills go nowhere near far enough. Low-income families have been at the sharp end of tax credit cuts and benefit freezes over the last decade, with many low-paid parents losing thousands of pounds a year as a result. The savings paid for income tax cuts that disproportionately benefited better-off households; they were a political choice made by successive Conservative chancellors, supported between 2010 and 2015 by the Liberal Democrats. The cuts have left less affluent households particularly vulnerable to this cost-of-living squeeze and are a large part of why child poverty rates have risen and growing numbers of people are using food banks.
Government support to help with rising energy bills should be targeted at those who need it most, through the tax credit and benefit system. Instead, the chancellor, Rishi Sunak, has chosen to prioritise Conservative voters – and hence his own leadership prospects – by distributing it through a flat-rate, poorly targeted council tax rebate that 80% of households will benefit from; more than 40% of its value will go to households in the top half of the income distribution, while more than 600,000 low-income households will miss out. The £200 rebate for all households will be taxed back through a £40-a-year surcharge for the next five years, which will push today’s cost pressures into the future.
This assumes rosier economic times are just around the corner. Yet Brexit, the great unacknowledged economic dampener, will continue to depress economic growth in the coming years, whether or not voters associate these costs with leaving the EU. Worse still, Brexit is very likely to widen the gap in economic performance between London and the south-east and the rest of the country. This will only further accentuate the impact of cuts in government grants that fund local services, which have hit the least affluent areas of the country much harder than areas that enjoy higher council tax and business rates revenues. The incremental measures in the government’s “levelling up” plan published last week will do very little to close the gap in investment and productivity; in 2021, the equivalent of just £32 per person was awarded from the Levelling Up Fund for the north of England, which pales in comparison with the £413 per person drop in council spending since 2011.
This is the parlous situation in which the country now finds itself just over five years after a referendum that paved the way for Boris Johnson to become prime minister and irrevocably damage standards in public life. Whether he is forced out tomorrow or in a few months, a weakened Conservative party will remain consumed by its own internal politics while many already hard-pressed families face the worst threat to their economic wellbeing for many years. It is not what Britain deserves.
