The poorest in society face three big hits to their income in the year to October 2022, according to a report commissioned by former prime minister Gordon Brown. As well as losing the £20-a-week rise in Universal Credit, benefits have not kept pace with inflation – and a jump in the energy price cap is expected this autumn. Image: Gordon Brown It means some families are up to £1,600 a year worse off because of the cost of living crisis – even after government help is taken into account. Poverty expert Professor Donald Hirsch, who wrote the report, says the package of measures the government is offering falls far short of what low-income households need – and urgent action is needed. He told Sky News that “extraordinary measures” were needed, such as an “extraordinary increase in universal credit”. “We live in different times than we have ever known and people this winter will be desperate,” he said. Liz Truss has pledged to cut taxes immediately if she becomes prime minister, while Rishi Sunak has said he will help families by scrapping VAT on energy bills. However, Professor Hirsch said none of the candidates’ plans to cut taxes come close to offsetting the rising cost of living. Professor Hirsch’s research shows that an out-of-work couple with two children will lose £1,300 a year, with larger households suffering greater losses. This is despite working-age households on Universal Credit and other means-tested benefits getting an extra £1,200 in help – including reductions on their energy bills and council tax, as well as £650 straight into their bank account. The report warns that this flat-rate approach is hurting older families, and Mr Brown said: “We are facing a humanitarian crisis the likes of which Britain has not seen for decades. “As the cost of living continues to skyrocket, families struggling to make ends meet can’t bridge the gap.”
HOW ARE THE PRICE INCREASE AFFECTING YOU?
Let us know how the cost of living is impacting you. Share your story, photos or video with us using our app, private messages or email. :: Your report on Sky News apps :: WhatsApp :: E-MAIL By sending us your video/photos/audio you agree that we may transmit, publish and edit the material Writing in The Observer, the former prime minister warned that failure to act risks “condemning millions of vulnerable and blameless children and pensioners to a winter of dire poverty”. Mr Brown is urging Boris Johnson, Sunak and Ms Truss to agree an emergency budget this week – and says time is running out to update the Universal Credit payment system before the next energy price rise. Underscoring the urgency of the matter, he also suggested that parliament should be recalled if they failed to do so. Read more: Rising pet owners as cost of living rises Sixteen million people cut back on food and essentials UK ‘has done less to ease the burden of high petrol prices’ Use Chrome browser for more accessible video player 2:48 The British warned of worse to come “Living in Survival Mode” The report has been endorsed by 56 charities, faith groups and politicians – and also includes the first-hand experiences of those affected by rising bills. One of them is Lowri, who receives Universal Credit and cares for her father and daughter. Her food and fuel bills have doubled and she has had to sell her daughter’s bike to make ends meet. He said: “I’ve spent the last five years living in survival mode, just to survive every day, constantly worrying about money. I am emotionally and mentally exhausted living like this. “It’s not alive, it’s just there. There’s no way people are going to be able to pay all their bills, and all we do is exist to pay bills. Terrified is an understatement.” Follow The Daily Podcast on Apple Podcasts, Google Podcasts, Spotify, Spreaker The predicted shortfalls in the report are based on figures taken at the end of 2022 and there are fears that families will find themselves in an even worse financial situation when Ofgem, the energy regulator, makes its announcement about the rise in the energy price cap . A government spokesman said: “We understand that people are struggling with rising prices, which is why we have acted to protect Britain’s eight million most vulnerable families through at least £1,200 in direct payments this year, with extra support for pensioners and those claiming disability benefits . “Through our £37bn support package, we are also saving the typical worker over £330 a year through a tax cut in July, allowing Universal Credit users to keep £1,000 more of what they earn and reducing fuel tax by 5p, saving a typical family £100.”
