Today is bad news for bills – that’s no April Fools joke. If you pay council tax or car tax, have a water bill, a mobile phone, a broadband contract or TV licence, you will be facing higher costs. Last month rail fares in
England rose by 4.9 per cent (they rise by 8.7 per cent today in Scotland). Even NHS dental charges rise by 4 per cent today. Most of these price hikes will apply to most people. Inflation may have fallen to 3.4 per cent last month, but inflation-busting bill rises are yet to become a thing of the past. The cost of living crisis is far from over. In most cases, there is no plausible justification for these above-inflation hikes. Have water companies improved water quality, reduced leaks or sewage pouring into our rivers? No – and yet water bills rise by an average of 6 per cent in England and Wales today. Has your council started delivering more services to justify their council tax rises? No, in fact most councils have cut services while hiking bills by 5 per cent this year (10 per cent in Birmingham). You’re paying more to get less. While other costs have dropped this month – notably energy bills (though they are still around 12 per cent higher in real terms than in 2021) – food price inflation is still 4.5 per cent, meaning the cost of your weekly food shop continues to rise. The news is no better on housing costs. Rents have risen by 9.2 per cent in the last year, with Office for National Statistics figures showing
London has had the highest rent hike, at 10.6 per cent. No wonder London Mayor
Sadiq Khan is asking Westminster for the power to bring in rent controls. The average monthly rent in the
UK is now £1,238 and UK renters are paying more than our international peers for housing that is, on average, less well insulated and less spacious. The Resolution Foundation reported last week that “when it comes to housing, UK households are getting an inferior product in terms of both quantity and quality … the worst value for money of any advanced economy”. Read Next Let Thames Water go bust More than 1.5 million households will have to remortgage in 2024. Fixed-rate mortgage deals from two or even five years ago were much cheaper, and most will be forced to refinance at rates that are double or more what they paid previously. This is a straight redistribution from households to banks that have enjoyed record profits in the last year. Have you ever felt like you’re being ripped off? The common thread running through many of these price rises is poorly regulated suppliers that are able to extract more and more profit from us without constraint, whether that’s banks, landlords or water companies. Unsurprisingly, this is resulting in more households being in debt : the number of people in the red has jumped from 3.25 million at the start of 2020 to 5 million today – an increase of more than 50 per cent. Last month an exasperated Citizens Advice said that UK politicians were “burying their heads in the sand” about the scale of the debt crisis afflicting UK households. Many campaigners are now reframing this era as a “cost of greed crisis”, coining the term “ greedflation “. This “leave it to the market” approach, the dominant paradigm in UK politics for the past 45 years, is not delivering, as 15 years of economic stagnation and falling real wages attest. The Office for Budget Responsibility forecasts that real wages will not even return to their 2008 levels until 2025 – an unprecedented pay squeeze of 17 years. A service-based
economy like the UK’s relies on buoyant consumer spending to thrive. There can be no economic recovery until household budgets are replenished. There are precious few signs of that happening. Government ministers out in force today emphasising the cut in national insurance from 12 per cent to 8 per cent are only telling half the story. The freezes to income tax thresholds, known by economists as “fiscal drag” (and by everyone else as a “stealth tax”) mean most earners are worse off overall – as a Sky News calculator shows. Economic failings have social costs too: lives are being ruined by this ongoing political failure. Last October, the Joseph Rowntree Foundation (JRF) reported that 3.8 million people in the UK are destitute, including 1 million children. JRF defines destitution as “when people cannot afford to meet their most basic physical needs to stay warm, dry, clean and fed”. Destitution has increased by 148 per cent since 2017. This is the
Britain of 2024, where terms like destitution, a relic of the Victorian era, are being revived. Last
Christmas more children than ever (139,000 in England alone – equivalent to the population of a large town, but just of children) were in temporary accommodation , without a permanent home. Today’s bill hikes show there is no end in sight to the UK’s malaise: squeezed consumers and, as a result, constricted economic growth and misery for millions. We currently sit mired in recession , with only the prospect of weak growth on the horizon. Until politicians start protecting consumers, tenants, passengers and billpayers, there will be no economic recovery and more misery to come. Andrew Fisher is the former executive director of policy for the
Labour Party