Confronting the cost of living on the frontline of poverty
By Sam Joshi
The imposition of sanctions on Russia, and subsequent escalation in price of energy bills, may be the most immediate explanation for the cost of living crisis in the UK. But for us, conflict in Ukraine is just the latest battle in a much longer war between poverty and prosperity. In each fight, defeat over the aggressor has always depended on the defensive willpower, focus and tenacity of the aggressed. Our collective prosperity, like the freedom of Ukraine, is under attack. As demonstrated by the latest retreat from Kharkiv, Russian aggression is up against the formidable resistance of a central, unified impassioned Ukrainian population. In the UK however, poverty risks advancing unimpeded against the incohesive plans of an incoherent government.
The current fuel cap, set at just below £2000, restricts the price we pay for gas and electricity. Yet on 26th August, Ofgem revealed its plans to raise the cap to above £3500. With the deduction of heating bills, removing this lifeline would send 8 million households into fuel poverty, reducing disposable income to below the official poverty line. The government has since announced its intention to cap the uplift to £2500 per household, in a move to evade the prospect of national catastrophe. It has failed however, to provide an affordable plan to finance its scheme. The scale of suffering at stake demands that we examine this strategy, highlight its deficiencies, expose the costs of inaction, and explore an alternative approach.
Since Ofgem announced its energy plans, in its fixation over leadership turnover, internal conflict and indecision over economic plans, instability has gripped the government. During her short tenure as prime minister, Truss unveiled intentions to implement a stimulus package worth at least £180 billion, the bulk of which was ringfenced to compensate energy giants for the revenues otherwise amassed from extortionate retail bills. In the immediate future, the scheme promised to save consumers from the worst extremities of energy inflation. In its resolute defence of private profits however, the government has so far refused to implement a windfall tax, a key means through which to raise revenue without risking a heavy electoral backlash.
Before giving Truss the chance to wreck irreversible damage, investors cast a resounding vote of no confidence in the government, sending her strategy, and leadership, into retreat. The Bank of England was nonetheless forced into an emergency wave of quantitative easing, printing billions in bonds to finance demands for borrowing. Without the immediate execution of an affordable alternative, the deficit continues to grow. Under the new Sunak regime, the government must choose now whether to pass this burden on to us, or the energy giants. Some hope remains given that Sunak presided over the “Energy Profit Levy” as Chancellor, a £5 billion windfall tax on energy producers that helped finance government support for households grappling with a cost of living crisis.
Madeline Daley is among the leading members of FareShare Greater Manchester. And for the poorest, her insight helps to illuminate the practical implications of the prevailing political paralysis. Among the most urgent is food insecurity, which in the five months following April, has seen 45% of adults skip meals, forcing one twentieth into consistent hunger. Whereas incomes have stagnated, the price of over half of all major supermarket value range products have increased by 15%.
It is therefore striking to note that when 10% of the British population will spend the next six months with a choice between heating and eating, no less than one billion tonnes of British food will go to waste. WRAP, a climate action NGO, estimates that of this waste, 270,000 tonnes could otherwise be redistributed to people in need. For an average family, 1 full meal consists of around 420 grams of edible food. This amounts to 1200 million wasted meals every year. The numbers are astronomical - in the next six month this could save 7 million people from spending a single day in hunger.
Before the blame can be levied on supermarkets however, we must remember that executives are themselves constrained by the escalating costs of supply. On 13 August, the Independent reported that on the back of the nation’s driest July since 1935, drought will force farmers to raise “the prices of beef, lamb, wheat and other crops” in anticipation of severely restricted harvests for the year ahead. The National Farmers’ Union argue that in response to the sharply rising cost of fertiliser, feed, wheat and barley, farmers’ financial security can only be guaranteed if supermarkets pay more for their produce. As a necessary result, “prices must go up”.
Even before the energy crisis, Madeline explains how the price of accommodation had established itself as the biggest reason for food insecurity.
“In Greater Manchester, the monthly rent for a two bed flat is £1822”, which for those on benefits “means no areas are classed as affordable”. Because an annual “£21,824 just to pay for rent” means working “61 weeks per year…even if you’re working full time with overtime that’s not enough to survive”. Putting the numbers in perspective, Madeline explains how the 25% of GM residents earning “below the living wage” would be enough to “fill Stamford Bridge five times over”.
For the millions in this country with “childcare, driving and transport restrictions” however, “people can’t afford to work full time”. Added to the humiliating “stigma attached to those on benefits”, this creates a desperate situation in which “it's so shameful for so many to accept the help”. From her experience, many of Greater Manchester’s 75,000 Universal Credit claimants “were so distrustful of the process of accepting a food parcel that when the help came, they chose not to accept it”.
As a country, we produce more than we can eat, yet charge more than we can pay. Readily edible, healthy food that could be channelled into meals on the plates of the poorest is instead incinerated, converted into biofuel, or returned to feed for the livestock, themselves condemned to stack supermarket shelves at unaffordable prices. The future of food is contingent on sustaining affordable energy and housing markets, a resolution to the conflict in the Ukraine, and fighting climate change. Without an immediate solution for any however, our urgent priority becomes food distribution, the waste from which is as avoidable as it is unjust.
Although Madeline does not “think FareShare should need to exist”, hers is among the only organisations fighting to save families from starving this Winter. But finance for their work depends upon supplier donations. Since April, support from supermarkets has run increasingly dry, at the same time as beneficiary demand has become ever more intense. Since a monthly peak of 206,000 kilos at the end of the pandemic, the food FareShare can move has been forced to below 150,000 kilos. The difference, in real terms, runs the risk of starvation for those dependent on the 270 charities they serve. Because 70% of this is perishable, such as fruit, vegetables and dairy, the most pressing challenge is making the requisite movements while the food is still fresh and edible.
Harvard Business Review outlines how existing technologies can cut delivery times between inventories and supermarket shelves. Paying close attention to consumer habits creates clearer expectations about necessary produce. Close communication between supermarkets and farmers could therefore help to eliminate excess produce, and its associated waste.
In the immediate future therefore, farmers, transport networks and retailers must work together in a drive to deliver their supply before it expires. Such an ambitious venture would require coordination, communication and commitment. But if the collective focus of an industry can shift to face the immediate crisis of poverty, families may need not starve this Winter.