London: Britain’s new prime minister, Liz Truss, comes to power after a ‘summer of discontent’ as Britons tighten their belts in response to double-digit inflation and soaring energy costs. Liz Truss inherits an economy that will plunge into recession by the end of the year, with double-digit inflation projected to soar further. “It’s historically impacting the cost of living and income,” said James Smith, research director at the Resolution Foundation think tank. “The next prime minister will have to focus on the current crisis from day one. right.”
For months, workers ranging from garbage collectors to lawyers have joined the picket line for higher wages. While the strike attracted widespread support, it also enraged some people with train cancellations, overflowing trash cans and empty shelves.
In England and Wales, droughts are exacerbated by climate change, crops are drying up, wildfires are brewing, and trees are dropping their leaves prematurely, causing industrial unrest. But many households are already trembling in anticipation of winter when energy prices will rise significantly. “It’s summer in the UK and life is not easy,” quipped the Financial Times. The Economist wrote that “hardly anything seems to be working in the UK”, adding that “it could get worse”.
The National Bureau of Statistics said this month that the consumer price index has risen 10.1% in the year since July 2021, the highest in 40 years. Food and non-alcoholic beverage prices have risen the sharpest, with basic food items such as milk, cheese and yogurt rising the most.
This is because inflation has caused the steepest decline in real wages in two decades, hitting low-income earners the hardest. The Institute for Fiscal Studies (IFS), a prestigious think tank, said, “These price increases will make the country worse and many or all of us will ultimately lose out.” In a sign of growing poverty, the number of children eligible for free school meals has increased by almost 1.9 million since 2021.
‘Real hard work’
Meanwhile, the UK energy regulator will soon allow suppliers to charge consumers even more, reflecting high global wholesale prices. The UK has some of the least energy efficient and oldest homes in Europe and has been slow to deploy green technologies such as heat pumps.
Citing large families and people with disabilities as examples, Smith of the Resolution Foundation said high bills would hit people across society, but especially those with low incomes and high energy needs. rice field. “I think we are going to face real hardship and extreme poverty,” he warned. The poorest people in the UK often use prepaid meters and cannot spread their energy costs over the year.
The Resolution Foundation has proposed a 30% discount “social tariff” for low- to middle-income households. Europe is also experiencing a major energy shock and the US is witnessing an overheating economy and high inflation, but “in some ways we are in the worst of both worlds,” Smith said. .
York University estimates that two-thirds of UK households will be ‘fuel short’ by January, paying more than 10% of their net income in energy. Experts warn of serious consequences. “In the coming weeks more parents will be faced with the impossible choice between food and heating.” Not yet,” said Dan Paskins, UK Impact Director for Save the Children.
In a “hot summer of strikes” many sectors are demanding pay increases to match high-inflation rail and bus workers, dockers, postal workers and even criminal defense attorneys. In the Scottish capital of Edinburgh, city officials cleaning up the trash went on a stinking strike to coincide with the city’s world-famous arts festival. Dockworkers have flown in and out of the main container port of Felixstowe in the east of England as a move to batter the supply chain.
The rise of strikes has led the right-wing media to draw parallels with the widespread nationwide strikes of the 1970s. However, the National Institute of Economic and Social Research think tank stressed that “the 2022 strikers… are operating from a weaker position.”
Currently, only about 23% of the workforce is represented by trade unions, the report said. Due to Brexit, COVID and other factors, the labor market is tight, with fewer workers than jobs. This has hit sectors such as airports, which have dispatched specialist staff during COVID, resulting in long queues for holidaymakers and flights being descheduled.
With inflation at a four-decade high of more than 10% and fueled by rising energy and food prices, Truss promised tax cuts during the campaign. She also pledged to reverse recent increases in workers’ National Insurance premiums that fund public health services and welfare payments. It proposes abolishing taxes, but rejects “sticky plaster” solutions to the cost of living crisis, such as direct government aid.
An emergency budget is due in the coming weeks as the Bank of England (BoE) predicts the UK will plunge into a year-long recession by the end of 2022. “If I am elected prime minister, I will act immediately on bills and energy supplies,” Truss, who is stepping up from his role as foreign secretary, told the BBC on Sunday.
Truss, 47, supports Britain’s ambition to be carbon neutral by 2050. She supports all-out investments in energy, including the controversial fracking technology, and is supported by locals. Truss also wants more energy to come from the North Sea and supports current UK government policy on investing in nuclear power and renewable energy. Boris Johnson last week pledged to fund the new Sizewell C nuclear power plant with her £700 million ($815 million).–AFP