People need cash. The average annual cost for gas and electricity under the energy price cap rose by £693 on April 1st to £1,971 and is currently predicted to hit almost £2,600 at the next adjustment in October. Office for National Statistics figures reported today that inflation is now at 9% – and poorer families are more exposed. Resolution Foundation analysis found that inflation is 10.2% for the poorest tenth of households, significantly higher than for the richest tenth: 8.7%. People are being forced to choose between heating and eating and, according to YouGov polling, half of Britons report that the cost-of-living crisis has made their health worse.
Now might be a good time for an intervention from Rishi Sunak, then. Labour certainly thinks so. Unfortunately, ministers have so far resisted calls for help. The government last night rejected a Labour amendment to the Queen’s Speech calling for a windfall tax on the profits of oil and gas companies to support struggling families. Addressing parliament just before the vote, Work and Pensions Secretary Therese Coffey said the government would reject all opposition amendments “as a matter of precedent” because it is for Sunak to introduce fiscal measures, adding that “all future decisions on tax will be made… in the usual way”. Labour will try again, nevertheless. The party is set to force a vote later today calling for an emergency Budget to tackle rising costs.
59 Tories abstained on the windfall tax amendment yesterday. And the pressure on the Chancellor from the public is growing. Is a U-turn, as Ed Miliband put it, “lumbering slowly over the hill”? The Chancellor said during the Queen’s Speech debate that a U-turn on a windfall tax could be on the cards, telling parliament that “no option was off the table”. This not the first time Sunak has hinted at changing his mind on the tax: he told Mumsnet in April that the proposal is something he “would look at” and that “nothing is ever off the table in these things”. But how long will he take? If a U-turn is coming, lumbering slowly seems to be an accurate description.
As we head into the Queen’s Speech debate today, a key point Labour will keep stressing is that this crisis is not “inevitable”. Should the Chancellor reach an epiphany and perform his not-so-speedy U-turn, this point will be even more crucial for Labour to emphasise. As the Conservatives steal Labour’s ideas – spelled out months ago as the right way to go – Sunak and Boris Johnson will argue that they have swooped in to save the British people. But it is 12 years of Conservative policy that has led us to this point. The cost-of-living crisis is a culmination of political choices. The Labour leadership must ensure that people do not detach the decade-long march of austerity from their current situation.Sign up to LabourList’s morning email for everything Labour, every weekday morning.