The number one issue for this year
It is the cost of living, not Covid, that is the crisis that will dominate people’s minds during 2022, as a tsunami of costs are about to hit, led by hikes in energy prices and National Insurance. These increases will impact everyone across the country, but the area hardest hit will be the North East. Our area has the lowest average salaries in the country at just £28,444 p.a., and as a disadvantaged area we have lost all the benefits of EU funding that poured many tens of millions of pounds into the region.
Food banks
It’s no secret that the busiest food bank in the country is in Newcastle, but could spiking demand for its supplies see this life-or-death resource overwhelmed this year?
This is the dire prediction as our vital and highly valued network of food banks will strain under new and sustained demand from new and existing users. The situation will be compounded by the 4.5 million households living in fuel poverty finding their predicament worsened, and their numbers added to, in a vice of choosing whether to eat, or have heat. The government is ignoring millions on the bread line, possibly placing them, if they’re considered at all, in the well-spun bracket of the “just about managing”.
The UK is the fifth wealthiest nation in the world , and it is unfathomable that many people in the UK are literally starving and cannot afford to eat and to turn on the heating. We rightly send money abroad to other nations to feed the poor, but there is not enough consideration for our neighbours here in the UK.
Russia
The rise in gas prices has been covered elsewhere by North East Bylines, with the current government having effectively abdicated its responsibility for gas storage by closing down the Rough Storage facility. This is just as Gazprom, Russia’s mighty gas monopoly which is in effect weaponised by the Russian government, laughs all the way to the bank, holding the UK and many other European nations to ransom on the daily supply of gas and its price.
Prices rose on two occasions during 2021 but the price increase expected for 2022 could dwarf these prices combined, by a significant margin. Prices rose by 12% last October to a maximum of £1,277 for a standard tariff for an estimated 11 million customers nationwide. Multiple newspaper stories are predicting this cap could be as high as £2,000 per year. This is great for Gazprom which has declared a dividend of £179 million from its trading activities in 2020 and it noted that 2021 presented additional opportunities. I would expect 2022 profit figures to be several times higher.
Such gouging spikes could be smoothed out. Gas companies in other European states are mandated to maintain storage to ride out sudden blips and dips in gas supply and price. In the UK, however, the heroic faith in “the market” means gas suppliers directly pass gas price hikes onto consumers, and if inaffordability means they freeze, so be it.
Still, we have the much clutched-at dividend of Brexit meaning that now the UK can set its own rate of VAT on energy prices. This was something raised at the Prime Minister’s first press conference of the year by The Sun’s political editor, referring back to a Sun article written by Johnson in 2016, that spun this as a massive Brexit benefit. But amid the cold reality of 2022, cutting VAT is not being utilised, Johnson now deeming it to be too blunt an instrument.
The next big spike is National Insurance which will impact everyone, and those on an average North East salary will be worse off by £236 per year.
Then we come to mortgages. For anybody paying a mortgage, the base rate increased in December 2021 from 0.1% to 0.25 % meaning monthly mortgage payments will start to rise very soon. This modest increase is likely to just be the start of further hikes in mortgage payments during 2022. A fresh hike in interest rates could be announced as soon as 3 February or in the following months as inflation continues to rise.
Train fares will go up by 3.8% from April. Council taxes are rising fast to help pay for social care and the increase in the National Insurance costs that all business will incur. Forecasts range from 3% to 6% depending on which local authority you live. Mobile phone bills will also be going up in April.
We can still afford to eat though, right? Remember, Brexit was going to deliver cheaper food prices. Instead, thanks to Brexit, prices in the shops are escalating very quickly, and empty shelves are now an everyday occurrence in virtually all supermarkets. It’s no wonder Age Concern has said that 7 million pensioners are facing the really stark choice of eating or heating. But as said above, food price hikes affect us all. Even those who can still afford to feed themselves will have less to give to food banks where demand will be rising.
Government response
The government is coming under severe pressure from its own backbenchers and the public to help mitigate these price and tax hikes. Many Tory MPs are becoming nervous on the impact of inflation on their voters and are pleading for relief, but so far this has been resisted by the Chancellor and Johnson.
This is no surprise, how can these two very wealthy men really understand the pressure people are under to just about manage?
What can we do?
The reality is that the poor don’t seem to matter with the current government.
The only glimmer of hope is that the natural process of a General Election and local elections in years to come will give an opportunity to voters express their disgust and distain for the policies of this morally corrupt government. It’s time to vote them out. I salute the voters of North Shropshire for their overwhelming decision to reject the Tories in that previously safe Tory seat.
Meanwhile, what can we do to contribute to ensuring there is social justice for all and no one is left hungry or without heat? We must keep up the pressure on the government to assist all who will suffer increased levels of hardship from these price increases and support when we can our local food banks with either a food or financial contribution, where possible. But also, lay blame where it needs be blamed, at the feet of the current government.
Say it loud, often, to everyone and anyone.
