Hi this is Fred from IVisible
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Today, we will explore the current world of the cost of living crisis in the UK in 2022.
By the time I made this video the situation in the United kingdom is so bad that many families and individuals are in an unrecoverable financial state and this cannot carry on.
Unfortunately, this will not change anytime soon. Karl Williams in his Economic Bulletin dated March 2022, tells us that UK households are facing the twin shocks of the energy price cap rising and a historic increase in taxation on page 4 of his report.
First, to really dive deep into the topic and make sense of Williams arguments, we should define what the cost of living crisis is.
According to the organisation institute for government “The ‘cost of living crisis’ refers to the fall in ‘real’ disposable incomes that the UK has experienced since late 2021. It is being caused predominantly by high inflation.”
So we are talking about prices getting higher which brings us to this June 2022, where the UK experiences an inflation rate of 9.4% according to the Bank of England.
The inflation, had already reach 5% at the beginning of the year 2022 and was expected to pick at 7% three months later in April of the same year.
However, it has reached an unmanageable rate by June 2022 for many households.
As the bank of England explains, It is very concerning to know that “if prices are unpredictable, it is difficult for people to plan how much they can spend, save or invest.
And in extreme cases, high and volatile inflation can cause an economy to collapse.”
It would be devastating to see this happen but what is even more damaging is that according to The Centre for Social Justice, debt problems are intimately connected to other problems in people’s lives, including mental ill-health and family breakdown.
The enormous pressure that the inflation puts on UK households is also acknowledged by Karl Williams.
The ONS adds that The largest contributions to the annual rate in June 2022 are from housing and household services, and transport.
First, this means that renters are being asked to pay higher rents.
Indeed, The Consumer Prices Index including owner occupiers’ housing costs (CPIH) rose by 8.2% in the 12 months to June 2022.
Simultaneously, Karl Williams said that the energy price are rising and there is a historic increase in taxation although even before the Ukraine crisis, natural gas prices looked likely to remain elevated.
His reports details this even further, by stating that European gas prices look likely to increase this coming winter and quite possibly again in 2023-24 and 2024-25 as you can see in the chart . (Williams, 2022,p5)
This is the reasons why, the price of food and other items necessary for households to live decently are increasing too.
Now, we are narrowing down to the struggle of the most vulnerable, those on low income, and the disabled. It seems that the government aims at targeting those who are in needs.
In order to understand the punishment and deprivation that the universal credit system as well as the inflation means for those groups of people, the BBC in its program Panorama investigated how some universal credit recipients are left destitute, homeless, unable to find adequate help and ill treated by the Department For Work and Pension.
Channel 4 documentary provided an insight into what is like to live on the universal credit.
The guardian also investigated into the government practices of punishing people claiming the Universal Credit.
Sky news interviewed a former Universal Credit agent who confirmed that he had to cut people phone calls short so that they would not have access to basic customer service. They teach us that people on employment are rising but are facing poverty as the salaries are so low that they cannot afford the basics despite earning a salary. 4 million households were in this category of poor workers in 2018.
And the list can go on. So I made a playlist on my YouTube Channel called The Universal Credit a system driving extreme poverty, for you to look at.
As such, you can make your own judgement about how horrible and unkind this system is and how a change needs to be implemented, as yesterday !!!
But how can the situation be eased at this point is a fundamental and logical question that I tried to answer whilst writing this presentation, and there are a few solutions available.
As per Centre for Policy Studies recommendations, moving to a system of weekly benefit payments and cutting the waiting time for UC would also help to ease the pressures on those who are going to struggle the most.
Karl Williams on page 5 of his report tells us that the UK must work on a plan of making and storing relatively clean energy as cheap as possible as soon as possible.
Also, Keir Starmer spoke to LBC about the topic and was explaining his plan to impose a cap to energy companies. That means stopping the energy companies to charge more.
I would like to add some very important points to this list by stating that the government must review the invoicing process in order to create laws that helps customers to avoid spending more than a certain percentage of their incomes on energy bills and water.
In addition, charitable bodies should not be the only ones capable of dealing with debt collectors on behalf of customers. This is why, I believe that any initiated debt collection related to the cost of living crisis should be fully scrapped.
Furthermore, renationalising the energy, water, debt and housing sectors must be planned in order to avoid this type of crisis. The UK has to look after its people by doing it in house !!!
It also means that the energy companies will have no other choice but to take the inflation increase as a cost that cannot be passed on to the customers for ethical, economic and well being purposes.
Although, I would ask them to make their accounting publicly available so that they cannot make even more profit during the transition from privatisation to nationalisation.
Finally and hopefully, the focus on looking for green energy alternatives will help creating a work force dedicated to innovation, research and environmental protection so that the UK can be a pioneer in being sustainable energy wise for the well being of all up coming generations.
That is all for today, I hope you did enjoy this video and let me know what you think of the offered solutions in the comment section.
Thanks for listening and see you in the next video!
– www.instituteforgovernment.org.uk. (n.d.). StackPath. [online] Available at: https://www.instituteforgovernment.org.uk/explainers/cost-living-crisis#:~:text=The%20%E2%80%98cost%20of%20living%20crisis%E2%80%99%20refers%20to%20the.
– Williams, K. (2022). Economic Bulletin Back to the 1970s? Energy Prices and the Cost of Living Crisis. [online] Available at: https://cps.org.uk/wp-content/uploads/2022/03/Economic-Bulletin-March-2022.pdf [Accessed 15 Aug. 2022].p2,3,4,5,6,
– The Centre for Social Justice. (n.d.). Debt. [online] Available at: https://www.centreforsocialjustice.org.uk/about/the-five-pathways/debt. – Payne, C. (2022). Consumer Price inflation, UK – Office for National Statistics. [online] www.ons.gov.uk. Available at: https://www.ons.gov.uk/economy/inflationandpriceindices/bulletins/consumerpriceinflation/latest.
– www.ons.gov.uk. (n.d.). Consumer price inflation basket of goods and services – Office for National Statistics. [online] Available at: https://www.ons.gov.uk/economy/inflationandpriceindices/articles/ukconsumerpriceinflationbasketofgoodsandservices/latest [Accessed 15 Aug. 2022].
– Bank of England (2022). What is inflation? [online] www.bankofengland.co.uk. Available at: https://www.bankofengland.co.uk/knowledgebank/what-is-inflation.
– The Universal Credit Crisis – BBC Panorama. (2018). YouTube. Available at: https://www.youtube.com/watch?v=TrdEVhyoiP4. – www.youtube.com. (n.d.). Man on Universal Credit Left with £5 Pounds for Rest of Month. [online] Available at: https://www.youtube.com/watch?v=dj0_ksxPHw4&list=TLPQMTYwODIwMjIOLnWxJqC8lg&index=3 [Accessed 16 Aug. 2022].
– www.youtube.com. (n.d.). Claimants ‘tricked’ out of benefits, says Jobcentre whistleblower. [online] Available at: https://www.youtube.com/watch?v=0XLgg75stn4 [Accessed 16 Aug. 2022].
– www.youtube.com. (n.d.). Keir Starmer speaks to LBC as cost of living crisis bites. [online] Available at: https://www.youtube.com/watch?v=9An36-ZvaPw&list=TLPQMTgwODIwMjLdsKWUgqASYQ&index=3 [Accessed 18 Aug. 2022].
– www.youtube.com. (n.d.). Growing share of under-30s in UK pay unaffordable rent – BBC News. [online] Available at: https://www.youtube.com/watch?v=d3lUNzXMLSg [Accessed 19 Aug. 2022].
– www.youtube.com. (n.d.). Pharrell Williams – Freedom (Audio). [online] Available at: https://www.youtube.com/watch?v=5Pk_oHxy15M.