Boris Johnson has dismissed growing fears of a cost of living crisis this winter, despite senior Tories echoing warnings of what one charity called a “toxic cocktail” of rising bills.
Asked if “people are going to really struggle this winter” – as soaring heating costs are piled onto benefit cuts, rising inflation and looming tax hikes – the prime minister replied: “No, because I think this is a short-term problem.”
Interviewed in New York City, Mr Johnson also denied people are wondering “how they are going to put food on the table”, insisting: “I don’t believe people will be short of food and wages are actually rising.”
But the claim of a short-term problem was rejected by the Resolution Foundation think tank, which warned of “a cost of living crunch” – even if the immediate gas supply problems ease.
One charity told The Independent that juggling falling income with higher costs would be “an impossible task” for many, while a second said rising prices would be “devastating and in some cases lethal”.
Mr Johnson dismissed the warnings despite his own business secretary, Kwasi Kwarteng, admitting some families would have to choose between eating and heating their homes.
“It’s a difficult situation, it could be a very difficult winter,” Mr Kwarteng acknowledged, when pushed on the controversial £20-a-week cut to universal credit, from October.
Damian Green, the de-facto deputy prime minister under Theresa May, warned of families struggling to keep “heads above water”, while Gavin Barwell, her chief of staff, pointed to “a real political danger”.
But Downing Street rejected the idea of “additional help” in the weeks to come, Mr Johnson’s deputy spokesman saying: “We already have schemes in place to help people out over the winter.”
The “cocktail” of rising costs was already brewing as the end of the Covid furlough scheme for workers coincides with inflation hitting 3.2 per cent – and tipped to break through 4 per cent by the end of the year.
The universal credit cut will swipe more than 10 per cent of income from around 1 million families, experts say – while national insurance will leap next April, to fund the NHS and social care rescue.
Heating bills are already rising – after Ofgem hiked the price cap from an average of £1,138 per year to £1,277 from next month – even before the gas supply shortage struck.
Its impact will only be felt next April when it is expected to push the cap through the £1,500 barrier, consumer champion Martin Lewis predicted.
On his visit to the United Nations, Mr Johnson said “spikes in gas prices”, like food supply problems, were caused by “the world economy waking up” and would soon be over.
“We will do whatever we can to address the supply issues but this is a short-term problem,” he told ITN News.
On the BBC, the prime minister claimed success in creating “high-skilled, high wage jobs”, adding: “Unemployment is falling very rapidly, jobs are being created, wages are rising.”
But Mike Brewer, the Resolution Foundation’s chief economist, told The Independent: “Britain is facing a cost of living crunch this autumn as rising food prices and energy bills, the cut to universal credit and the end of the furlough scheme collide.
“While some of the pressures are likely to be transitory, that doesn’t make it any easy for families to cope in the here and now.”
Peter Smith, director of policy at the fuel poverty charity National Energy Action, said: “This toxic cocktail of challenges will leave millions of households struggling to cope with less income and higher costs. For many, it will be an impossible task.”
A spokesperson for Fuel Poverty Action said: “The increased prices will be devastating, and in some cases lethal – even before this series of price hikes, and before the pandemic, over 10,000 people were dying every year due to cold homes in the UK.”
And Richard Neudegg, head of regulation at the comparison website Uswitch warned, of the price cap: “There is a timebomb there, where it can go up again in April and consumers are already struggling to pay the bills.”
On Good Morning Britain, Mr Kwarteng was told of families facing “the choice between heating their homes and staying warm or eating, parents who may forego meals in order to feed their kids”.
Told he needed to “offer them some hope, the business secretary replied: “You’re right”.
