UK households have paid almost £14,000 on average in additional costs for mortgages, loans, energy and water bills over the past five years, according to a report urging the chancellor to tackle soaring living costs at the budget.
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households → pay → budget
With less than a fortnight before John Healey’s first budget as chancellor, the Trades Union Congress (TUC) said the cost of living crisis was weighing on the economy as hard-pressed households held back on spending.
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households → say → spending
Urging the chancellor to support households through a series of measures in the budget, it said the UK had recorded the weakest growth in consumer spending in the G7 since before the pandemic.
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UK → urge → pandemic
According to analysis of official figures by the union umbrella body, British households have forked out an additional £13,961 on bills on average since 2021 – an extra £2,792 a year – amid soaring inflation triggered by the exit from the Covid pandemic and wars in Ukraine and the Middle East.
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households → accord → Ukraine
Paul Nowak, the TUC general secretary, said: “From austerity to the pandemic to energy shocks and Trumpflation, working people have borne the brunt of crisis after crisis.
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people → say → crisis
When the crackpots in the White House or the Kremlin launch an illegal war, everyone pays the price in their bills.”
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everyone → launch → bills
In his speech at Labour’s conference in Liverpool, Healey pledged to use his 28 October budget to give households “breathing space”.
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Healey → pledge → space
However, he warned that the government had limited resources to soften the global economic shock hitting Britain.
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government → warn → Britain
Against a volatile backdrop, the Treasury has been preparing for a “tightly focused” budget to limit the potential for a market backlash provoked by large tax and spending measures.
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Treasury → prepare → measures
The International Monetary Fund this week urged Healey to “stay the course” to cut the budget deficit amid rising borrowing costs in global financial markets.
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Fund → urge → markets
The chancellor is however under growing pressure to take action to support households and businesses before the winter amid predictions that consumer energy bills could reach £2,000 a year from January for the typical household.
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bills → grow → household
After retail industry bosses pressed Healey for support in Downing Street meetings on Tuesday, the Confederation of British Industry said he should listen to calls for a cut in employer national insurance contributions to encourage firms to take on younger workers.
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he → press → workers
The lobby group also called for cuts to business electricity costs, changes to business rates and measures to support private investment.
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group → call → investment
In a separate report, the centre-left IPPR thinktank urged Healey to raise £16bn, mostly through a rise in capital gains tax that would be softened by a new entrepreneur “super exemption”.
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that → urge → exemption
It was reported on Tuesday that Healey had rejected calls from Labour MPs and thinktanks to use the budget to equalise the rates at which capital gains and income from work are taxed.
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gains → report → work
However, the IPPR said headroom against the chancellor’s fiscal rule was likely to have shrunk by between £7bn and £15bn since the spring amid the impact on government finances from the Middle East war.
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headroom → say → war
Calling for a cost of living package funded largely by higher taxes on wealth, it urged Healey to introduce a “rent stabilisation mechanism” to cap private rent increases, alongside a £2,000 cap on consumer energy bills, a freeze in fuel duty, and an increase in housing allowance benefits for households on universal credit.
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it → call → credit
The TUC said Healey should launch a social energy tariff and take action to help poorer households and young people with rising living costs.
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Healey → say → costs
It also called for a rise in capital gains tax and higher taxes on banks.
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It → call → banks
Highlighting the costs from sticky inflation and higher interest rates, the analysis showed households with mortgages had spent on average £9,034 extra on repayments (£1,806 extra a year) since 2021.
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households → highlight → 2021
Those with loans had paid £1,911 extra in total (£382 extra a year).
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Those → pay → total
Average rental costs have risen at a higher rate than mortgages, suggesting mortgage costs are being passed on to renters.
In the study of Office for National Statistics figures, it found households had spent on average £2,644 extra on electricity and gas bills since 2021 (£529 extra a year), and £372 extra on water bills (£74 extra a year).
Meanwhile, growth figures show that consumer spending remains behind pre-pandemic levels, after a period of broadly flatlining growth in household disposable incomes since the 2008 financial crisis.
Nowak said: “Eye-watering bill rises have hammered household budgets, squeezing consumer spending.
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rises → rise → spending
That’s being felt on high streets up and down the country, holding our economy back.
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That → feel → economy
“The chancellor needs a serious plan to put working people at the heart of growth, raising living standards so Britain can afford to spend.
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Britain → need → standards
That means shielding households from punishing energy spikes and putting more money in workers’ pockets.”
The Treasury has been approached for comment.
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Treasury → mean → comment
The Aporia
