The Observer’s take on Rishi Sunak’s spring statement | Observer Editorial
Judge a political party by the choices it makes. Rishi Sunak can argue that no chancellor could shield everyone from a cost-of-living crisis brought on by events beyond his and the country’s control. But he protests too much. There were two realities when writing the spring statement he presented last week. The first was the warning from the Office for Budget Responsibility (OBR) that UK households were facing the most severe decline in living standards for 66 years. Second, there was the unexpected good news that, far from being in dire fiscal straits, there was a revenue windfall that would bring the budget deficit four years from now to the lowest in a generation. The Chancellor had around £30billion of financial leeway which he did not expect in October. Sunak had choices, but he chose not to make them.
The standard of living of the poorest in our society is already desperate. Sunak could have comfortably afforded the £6billion to boost Universal Credit by £20 a week, restoring the precious boost achieved during the pandemic. He could have indicated that he would fully index all benefits to reflect the surge in inflation that is so swelling the treasury coffers. His refusal to do so, believes the Joseph Rowntree Foundation, will push an additional 600,000 people into poverty, about a quarter of whom are children. He could have indicated he would backtrack on the February package to help households pay their energy bills, given OBR forecasts of another 40% rise in energy prices in the wake of the war in Ukraine. As a result, the price cap will be £2,801 almost £2,000 more in October than 18 months ago, equivalent to a 6p increase in the standard rate of income tax.
He did none of that, contenting himself with raising the fund made available to local authorities to help vulnerable people of just £500million. After factoring in all the measures, including National Insurance concessions and fuel tax, the typical working-age household will see their income drop next year by 4%, or £1,100, according to the Resolution Foundation. But the poorest quarter of households will see their income fall by 6%, 1.3 million in absolute poverty.
These numbers are mind-boggling, but avoidable. The Trussell Trust reports that 600,000 more people used food banks in 2021, bringing the total to more than 2.5 million. This number will surely increase by at least another 600,000 in 2022 to over 3 million. Yet Britain is one of the richest countries on the planet. What kind of society are we creating to be prepared to live with such poverty among us? For the conservative party, what counts is not the condition of the people, but the will to reduce taxes and the shoehorn of any political ambition in the yoke of artificial constraints on the debt. A moral and effective social policy is also popular.
It is a recklessness born of deep cynicism. Many Britons have every reason to believe they shouldn’t live in a society that forces so many people to choose between eating, dressing or staying warm. But mainstream conservative practice blames their poverty of choice; they should pull themselves up by their bootstraps to self-reliance.
But as we have learned from the pandemic, the rich cannot isolate themselves from the poor crowded into dilapidated multi-occupied housing, incubating the virus. Only self-interest demands that we all care. The doctrine of self-help ignores the reality that for the poor, the struggle is just to survive. But beyond that, the recognition of a reciprocal obligation towards our fellow citizens defines our humanity. There is a collective “we” beyond the “I” that demands tax cuts. By their choices, we will know them. Last week, the Conservative Party’s choices and their impact were laid bare.