The cost of living is a crisis for us all

When in Liverpool, one of the most generous cities in the world, the food banks are running out of stuff ti give away everyone should know there is a huge problem which cannot be ignored.

The biggest set of concerns that are being relayed to me at the moment relate not to council problems but the problems of people having to cope with the daily grind of soaring inflation. Families who have always had enough money, but not vast amounts are being pushed to the edge. Families who did not have enough to begin with are facing the choice, especially in the winter, of heating or eating.

All the excuses are coming out. It is the war in Ukraine, its increased consumption post lockdowns, it is a move away from fossil fuels. All those are true but together they do not add up to the full picture. Inflation in France, Germany and Italy is substantially lower than ours although their power concerns should be higher because they are more dependent on Russian gas. So, what could the difference be?

Well, I am afraid it is absolutely obvious. Many of the inflationary pressures on us are caused by Brexit. Brexit has:

  • Increased bureaucracy and created huge queues at Dover and other Southern ports which cost money.
  • Our own products have been rotting in fields because there was no-one to pick them.
  • Reduced numbers of workers meaning that businesses who have order books cannot always fulfil them.
  • A divergence of standards on things like food have meant that the long supply chains have become unwieldy.
  • Tariffs have come into play on some products because not only did we leave the EU we left the single market.
  • Foreign investment into the UK has plummeted because other Countries no longer see us as the obvious route into Europe.

We cannot deal with the European problems in the short term, but things would be greatly eased in that regard by taking two simple steps:

  • Announce that we will continue to accept the specifications on all products from food to cars that the EU sets. This is a simple step because in practice we already do this. Rees-Mugg has declared that UK manufacturers can ignore EU rulings on socket sizes but in practice they will not do so as they want to sell into the EU market and will make products that can be sold in the UK and the EU.
  • Allow into our Country people we need to undertake the work that is available, and we cannot fill with domestic markets. This actually is a small step because quietly and usually under the radar the Government has been allowing free movement of labour for everything from people to kill our Christmas Turkeys to people to look after us in hospitals and the NHS generally nationwide.

There are things that we can do now.

  1. For a limited period remove or reduce the VAT take from fuel. The Government is actually making a vast profit in increased VAT take on inflated power prices.
  2. Impose a windfall tax on the power companies some of whom are making record profits of £7 billion a quarter. Use that profit to help low and medium level earners to boost their spending capacity.
  3. Tax quickly and permanently those who find means to take their earnings and wealth overseas to low tax regimes to enable them to didge their dues to society. This applies equally to companies and individuals alike.
  4. Pay people properly. We have a summer of discontent because people on low and medium earnings are being offered between 0 and 5% pay increases when inflation is tipped to reach 13% and stay high for at least 2 years.

Our Country is still a wealthy one, but its resources are not shared evenly. Our Government does not understand this. If it did a suggestion from Liz Truss that public sector workers outside London could earn less money would never even have surfaced.

Liverpool is one of the most generous cities on Earth, so you know that when the food banks here are running out of donations the situation is grave indeed. Already in our City there is a 12-year difference in life expectancy between Liverpool 8 and Liverpool 18. Put simply, the people of L8 are suffering from low wages, poor food, poor housing, poor education and all the things that will fail to give people a good start in life and keep them in the slow lane.

We need action and we need it now before people start to die of cold in the coming Winter. The problems of poverty are not inevitable in the short, medium, or long terms. They are a result of failures of governments over decades to address fundamental inequalities so that we can create a society that is fair, equitable and provides equality of opportunity to all.

All that the current crisis is doing is bringing to the fore things that we have known about but chosen to ignore. That is a good thing if we use this opportunity to make quick wins that are achievable but put in place longer term steps to eradicate the huge differences that exist in the UK today.

About richardkemp

Leader of the Liberal Democrats in Liverpool. Deputy Chair and Lib Dem Spokesperson on the LGA Community Wellbeing Board. Married to the lovely Cllr Erica Kemp CBE with three children and four grandchildren.
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