While energy price shocks triggered this current cost of living crisis, it is fundamentally a crisis of incomes. The squeeze on household incomes because of energy price hikes comes after a ‘lost decade’ of earnings growth, whilst consecutive governments have actively dismantled our social security system to the point where it is no longer capable of preventing people from falling into poverty, even those who have been able to access some form of employment.
In this context, current inflation is rapidly eroding household purchasing power, further impoverishing households on low incomes who have been feeling the squeeze on their incomes for over a decade, creating insecurity and anxiety for middle income households, and threatening a recession in the near future.
We believe that everyone should have access to an income that allows them not only to survive but to live well. This means putting in place a safety net that is generous and broad-based enough to give adequate protection to everyone who needs it, and responsive enough by design to deal with shocks– whether price or income based – so that the Government does not need to reinvent the wheel each time we face an economic shock as a country, an inevitability in times of worsening climate change.
Reforms are needed to social security and the minimum wage rate so that they provide a guaranteed income floor, linked to the cost of living, below which nobody can fall.
