Beth Winter MP

The left must organise and mobilise in defence of incomes – Beth Winter MP ahead of the #SpringStatement


“We cannot accept falling incomes for the many when they continue to rise for a few at the top.”

By Beth Winter MP

This week’s Spring Statement by the Chancellor comes at a time of the worst squeeze in living standards since the 1970s.

People’s incomes and living standards are under attack on so many fronts. Whether it is social security or people’s pay falling in real terms, or the runaway cost of energy bills, food shopping, or regressive employment taxes, people’s incomes are being stretched further and further.

More than one in five of the UK population – 14.5 million people – are in poverty. 4.3 million children across the UK live in relative poverty. That’s nine in every classroom of 30, as Child Poverty Action Group graphically describes it.

This cost-of-living crisis, as it is being called, is being driven by steadily increasing inflation outstripping salaries and social security payments – and by regressive Conservative tax increases.

Inflation was recorded at 5.5% in February – the highest rate since 1992, thirty years ago – but is predicted to go higher.

The Bank of England raised interest rates on Thursday and said when it peaks, inflation is now expected to be ‘several percentage points’ higher than the 7.25% it forecast in February.

Meanwhile, pay is increasing by approximately 3.8% according to recent figures. And social security payments were pegged back to 3.1% when that was voted on in the House of Commons.

The Conservatives were wrong to hold social security down to the inflation level recorded in September, and now that is exposed as inflation goes higher.

Bills are increasing everywhere. Chief among them is energy – people’s gas and electricity bills.

The 54% increase in the energy price cap – designed to help consumers but failing spectacularly to do so – will come into force in April and there will be a further six-monthly review coming into effect in October.

The idea this could push energy bills to £3000 or more per year was unthinkable until recently. Family budgets are not able to cope with such an increase as their real incomes shrink.

Transport costs continue to rise with rail fares increasing and petrol prices climbing which will hit the poorest in society the hardest.

And food costs are increasing too, increasing reliance on foodbanks. The Trussell Trust found 33% of universal credit claimants surveyed had gone at least one day in the past month either without eating or restricting themselves to a single meal

As Martin Lewis of Money Saving Expert, said recently, the decision will become whether to freeze or starve.

So there is a need for the left to organise and to mobilise in defence of incomes.

We need an emergency uplift to incomes that is inflation-proofed and that should happen at the Spring Statement, the Chancellors half-year update on public finances.

There are a number of ways the government can do this.

They should scrap their planned increase in national insurance payments. They should scrap VAT on energy bills and introduce a windfall tax on to oil and gas producers’ runaway profits, to fund relief to households struggling with energy bills.

Both are being advocated by the Labour Party in Parliament and are the right things to do.

My concern however is that the impact of inflation is such that we need to do more.

Welsh First Minister and Welsh Labour leader Mark Drakeford, alongside former PM Gordon Brown, have called on the government to restore the £20 uplift to Universal Credit and to increase social security by the rate of inflation.

The Welsh Affairs Committee recently published report on the Benefit System in Wales, goes further calling for the £20 Universal Credit uplift to be reintroduced at the Spring Statement and extended to legacy benefits and that the UK Government should use nearer-term forecasts to increase benefits in line with the actual rate of inflation.

It seems unlikely that Rishi Sunak will take the necessary action, so the left will have to organise together inside and outside Parliament. We cannot accept falling incomes for the many when they continue to rise for a few at the top.

The TUC has called a national demonstration on the cost-of-living crisis on 18 June and it is crucial we start taking action now to build for it in every community.

  • Beth Winter is the labour MP for  Cynon Valley – you can follow her on Facebook, Instagram and twitter.
  • Beth was writing ahead of the spring statement on Wednesday, March 23rd, 2022.
Featured Image: Beth Winter MP

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