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  • Writer's pictureKenneth Gibson MSP

Tory Failure to address Energy Crisis is Driving Child Poverty to Highest Level since 1990s

A report published by the Resolution Foundation on Thursday warns that if the UK Government doesn’t take action, relative child poverty will rise to the highest level since the 1990s, and lunging a further 3 children people into poverty.

The report, In at the Deep End: The Living Standards Crisis facing the New Prime Minister furthermore shows that the UK is on track to lose two decades of income growth.

The rising inflation may wipe out all pay growth since 2003, decrease the typical real household income by 6% by 2023/24, and see the number of people living in poverty increase from 11 million to 14 million by 2023/24.

The Resolution Foundation calls for a “substantial policy intervention” on “energy prices or incomes to limit destitution over this winter.”

It furthermore concludes that “real incomes are projected to be lower in 2024/25 than in 2019/20 across the distribution, making this the worst Parliament in history for income growth.”

Stephen Fitzpatrick, Chief Executive of the third biggest energy company Ovo in the UK, has also today called on the UK Tory Government to take action to prevent the poorest households going cold and hungry.

A key proposal in a 10-point plan Ovo published is to allow energy firms to borrow from a UK Government-backed fund, and then use the money to subsidise bills.

A similar proposal by Scottish Power to freeze energy bills for all at their current level was dismissed by the Treasury for giving the same relief to richer and poorer households. However, under Mr Fitzpatrick's plan, everyone would receive some assistance, but higher earners would see the amount of money received reduce the more energy they used.

This is a similar way to how the tax system works, with a tax-free allowance and increased levels of taxation for those on higher incomes.

Kenneth Gibson MSP said:

“The SNP has repeatedly called for urgent action from the UK Tory Government, including measures such as doubling the energy bills grant, reinstating the Universal Credit uplift and extending it to legacy benefits, reversing the energy price cap increase, bringing in a Real Living Wage and matching the Scottish Child Payment.

“All of these calls have been ignored and as a result, in 2022 some people have to choose between heating and eating.

“Both Liz Truss and Rishi Sunak should really start thinking beyond pandering to Tory members, and commit to working with energy companies to help households get through winter.

“The plan presented by Ovo is fair and must be given very serious consideration as getting through the winter is becoming increasingly more challenging for many. My thoughts are in particular with our older and more vulnerable people.”

Rishi Sunak has meanwhile admitted that a reason the UK is suffering from higher inflation rates than EU neighbours is Brexit. He now seems to recognise that:

“[A contributing factor] here is that most European countries don't have the tightness we have in our labour market" and that "is probably the biggest challenge is finding workers and it has been for a while," while "labour inflation is something that we are experiencing that the rest of Europe is not."

The Resolution Foundation's report can be found here.



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