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How High Do Prices Have to Go?
- 6 days ago
- 2 min read
The chaos in the White House has given Iran a clear playbook – essentially privatise the Strait of Hormuz and you can hold the global economy hostage, leaving households across Newbury and the country to bear the financial brunt of a war they didn’t choose.
So yesterday in Parliament, I pressed the Chancellor on how long she would wait, and how high the price has to climb, before she rolls out further, targeted support for hard-working Britons.
Not in a year’s time, but this quarter.
This follows my calls last week to the Prime Minister to redirect the unexpected £200+ million in higher VAT from the Treasury to families and businesses today.
In her response, the Chancellor pointed to existing support such as the £150 energy bill reduction for households through to the winter of 2030/31. However, when energy bills jump again in June - and predictions such as from Cornwall Insight suggest this could be 12% or £196 a year - the savings will be wiped out.
Equally, the additional £50 million announced in March for low-income families struggling with the cost of heating oil is, of course, welcome for the roughly 30% across Newbury and West Berkshire who are off-grid. But, except for those at the very top, stubbornly high prices are continuing to hurt people across the board.
A quick glance across to our international allies, and we can see a different approach. In Australia; fuel tax halved; in Spain $5 billion worth of fuel and gas subsidies have been spent alongside a reduction of VAT on electricity bills; and in France, further relief schemes have been provided for the most vulnerable farmers.
I and my Liberal Democrat colleagues know the government cannot absorb all of the deep disruption caused by the conflict in the Middle East, but in comparison to some of the action taken elsewhere, the safety nets here are just not strong enough.
And the warning signs continue to flash red:
Analysis by EY Item Club forecast that a quarter of a million people could lose their job by the middle of 2027 due to a downturn in economic growth.
Inflation will spike to almost 4% in the second half of this year – nearly double the Bank of England’s 2% target.
Separate Deloitte survey shows business confidence among the UK’s largest firms was at a six year low, a net -57%, falling from -13% in the previous quarter.
These are not only bleak projections, as people are already feeling the pinch. The latest Which? Consumer insight tracker found a quarter of households are now regularly dipping into savings to cover the cost of essentials. People across Newbury and West Berkshire are doing their best, but how are they expected to get through the upcoming months when they’re already facing a constant struggle to make ends meet.
As Trump erratically tries to shove through a peace process he doesn’t control and Iran continues its banditry in the Strait of Hormuz, the financial situation for worried families is only going to get worse without immediate relief from the government.
