3 reasons the government’s solutions to the cost of living crisis are deeply flawed
Boris Johnson’s Cabinet met on Tuesday to suggest his ‘innovative’ ideas for tackling the worsening cost of living crisis – but their solutions weren’t met with much enthusiasm.
So far, the government has proposed reducing technical inspections of cars to once every two years, rather than keeping them as an annual obligation.
Childcare fee cuts have also been on the table, with ministers considering relaxing health and safety rules.
When pressed to share his own ideas at that meeting the following day, Justice Secretary Dominic Raab also seemed particularly enthusiastic although he did not in fact divulge any of his own plans.
However, not everyone shared his enthusiasm for the proposed changes to come.
Torsten Bell, chief executive of the Resolution Foundation – a living standards think tank – made his opposition to such plans very clear in a scathing Twitter thread on Tuesday.
He started by pointing out that if the only answers are childcare reforms and changing MOTs, “then we’ve lost track.”
1. Childcare changes wouldn’t come into effect for ‘years’
The BBC learned this week that Johnson was particularly keen to cut childcare costs by relaxing health and safety rules at Tuesday’s meeting.
Sources have claimed he wants to lower the legal limits on adult supervision for children in England. At this time, there must be at least one member of staff for every three children for all groups where the children are aged two and under.
For children over two years old, there may be one member of staff for every four children.
But, as Bell tweeted: “Whatever you think of watering down childcare regulations to cut costs, that’s no answer to the current crisis.
“The impact would be years away and while it is poor households that are crucified by rising energy bills, it is wealthier households that are more likely to use childcare. formal.”
Labour’s shadow education secretary Bridget Phillipson echoed that message and said the idea would “reduce quality without making a difference to availability”.
The Liberal Democrats have also accused the Prime Minister of ‘cutting corners’ and ‘endangering’ our children.
2. Changing MOTs will not help those affected by the crisis
Transport Secretary Grant Shapps has proposed reducing the annual MOT test to once every two years.
All vehicles over three years old must have a technical inspection certificate to verify that they are safe on the road. It can cost up to £54.85 for a car. Putting the measure in place would therefore save motorists around £27.43 a year.
Bell tweeted: “More people have cars than kids – and at least targeting the cost of driving is targeting a source of cost pressures.
“But again, it is not the poorest households who will benefit the most: a third of the poorest households do not have access to healthcare compared to 5% of the richest.”
The AA also argued that it would increase long-term costs due to higher repair bills and affect road safety.
According to Sky News, an AA spokesperson said: “While well intentioned, moving the annual expenditure of £55 for a technical check to every two years could add to the costs for drivers with utility bills. repairs, make our roads more dangerous and create jobs in the risky garage industry.
3. Energy prices are the problem
Bell said successful policymaking is all about “recognizing the question that needs to be answered” – and in this case, it’s skyrocketing energy prices.
In early April, energy regulator Ofgem lifted the cap on energy prices, meaning the average household would see a £700 rise in their annual energy bills, with prices set to rise again in October.
Bank Investec has even warned that bills could reach £3,000 a year as the war in Ukraine adds to growing global demand.
The Resolution Foundation warned earlier this year that this ‘energy stress’ would apply to 6.3 million households across the UK, particularly pensioners and those living in social housing.
The think tank then warned that UK households face a ‘catastrophe’ in the cost of living, while rising food prices and a rise in National Insurance – as well as the rate of highest inflation in 30 years – creating a situation of high intensity.
As Lib Dem leader Sir Ed Davey pointed out, the Prime Minister appears to be “completely out of ideas during the deepest crisis in decades”.
So what can we do instead?
Bell concluded that the cost-of-living crisis has hit low-to-middle income households the hardest, so the only conclusion is to reduce costs or increase income in these homes.
He added: “The benefits system is by far the easiest way to do this.”
The Liberal Democrats, Labor and the SNP have called for an emergency budget and a reduction in VAT, as well as a proposed windfall tax on the profits of oil and gas companies.
However, such changes seem unlikely as Chancellor Rishi Sunak appears reluctant to pour more money into the problem. He has just highlighted the £22billion he has already announced to cut energy and council tax bills at Tuesday’s cabinet meeting.
The Prime Minister’s spokesman explained this week: “It [Sunak] stressed the importance of not fueling further rises in inflation and pointed out that the UK is currently spending £80bn on servicing our debt.
Johnson, however, has threatened to privatize the Passport Office and other state-funded organizations if they don’t start offering better value for money.
He told TalkTV on Tuesday: “I’m not going to rule anything out. I don’t mind if it’s public or private, what I want is to provide good value for money and help reduce costs for people. »