Families face £1,400 cost of living squeeze this year, John McDonnell warns
Families face a cost of living squeeze this year that will cost every household an extra £1,400.
That will be the result of rocketing fuel bills, tax increases and rising food prices, warns Labour ’s John McDonnell.
Annual fuel bills are predicted to rise by 50 per cent to £2,000 when the current energy price cap is raised in April.
On top of this, households face higher taxes when National Insurance goes up by 1.25 per cent to fund the NHS and social care in the same month.
And latest figures show food bills are rising at their fastest rate since the pandemic struck, adding £15 a month to average grocery bills.
Mr McDonnell says the combined impact of the hikes, coupled with council tax rises and extra housing costs, will leave the average household at least £1,405 worse off.
The former shadow chancellor called for £200 winter fuel payments to be doubled and the £20 cut in Universal Credit to be reinstated as part of a £12.8billion package of measures which would be paid for by scrapping corporate tax relief this year.
He said: ”Half measures simply will not work when people are faced with the mounting scale of this cost of living crisis. The Government cannot stand by and watch families go under.
“A comprehensive rescue package is needed to provide people with the security they need to avoid the worries and hardship many are now facing.”
The plea comes as millions of pensioners struggle to heat their homes with fuel support benefits that have not increased in more than 10 years.
Cold weather payments paid out when temperatures fall below freezing for seven days have remained at £25 a week since March 2008. And warm home discounts, a one off reduction on bills for those getting pension credit, have stayed at £140 since they were introduced in 2011.
Age UK’s Caroline Abrahams warned “catastrophic” hikes in energy bills could push another 150,000 older households into fuel poverty - spending more than 10 per cent of their income on trying to stay warm.
She said: “Support for older people over the colder months has remained broadly unchanged for years and is nowhere near enough to match the scale of the current problem. Without urgent action, the consequences of such huge energy price hikes will be nothing short of catastrophic.”
She said inflation, which last month jumped to 5.1 per cent, is already eating into people’s pensions. She added: “Many older people are already putting their health at risk by rationing their food and heating to keep their bills down.”
As part of Age UK’s The Cost of Cold campaign, the charity is calling for a one off £50 winter fuel payment and wants the new £500million Household Support Fund, distributed by local councils, to be doubled.