BLOG: Cost of living crisis needs a willingness to tackle the fundamental issues

More action is needed on the cost of living to avert a crisis for households and the local economy, writes Mayor Joanne Anderson.

The Government’s recent announcements on energy support for households and businesses do not go far enough to tackle the cost of living crisis we are facing.

Even ignoring the fact they are continuing to protect rich oil and gas companies who will continue to rake in billions of pounds in profit, the simple fact is that people already on the poverty line have already seen their gas and electric prices virtually double at a time when they are already facing rising costs for other essentials such as petrol and food.

Household incomes in Liverpool are already 25% below the national average. With the Bank of England forecasting that inflation is set to reach the highest level for 40 years, budgets are under strain like never before. With winter coming, we are really concerned about the impact on families who are already struggling to make ends meet. Even before the energy crisis hit, an additional 1,770 households in Liverpool fell into fuel poverty in 2020, taking the total to more than 42,000.

As a council we already make 96,000 financial awards each year to help people in crisis, to help pay their rent and their Council Tax, costing a total of £84 million a year. Even a 5% rise in demand would cost us an additional £4 million a year – which is a significant challenge when we have to save an additional £100 million from our budget over the next three years.

We are also really worried about the impact on the local economy. Government data shows businesses within accommodation, food services, education, manufacturing, land and retail sectors are forecasting decreases in turnover this month. These sectors employ 40% of Liverpool’s workforce and account for almost one in three businesses – higher than the national average – meaning the city’s economy is more vulnerable to the cost of living crisis.

A third of Liverpool’s jobs are in businesses that are expecting to reduce the number of staff they employ, which would be disastrous. Fewer jobs means less money for people to spend in shops, restaurants and going out – and we know that the hospitality and leisure sector is a lynchpin of the local economy, employing some 50,000 people across the city region. And, if we have more firms not paying business rates and more people struggling to pay bills such as Council Tax, that will dramatically affect the income we receive and impact on our ability to deliver essential frontline services.

What we need from the Prime Minister is compassion and a willingness to tackle some of the fundamental issues, rather than just papering over the cracks.

On housing, we need a proper investment programme to make homes more energy efficient. In Liverpool, we have tens of thousands of Victorian terraced properties which cost more to heat. We need the government to vastly increase the funding available for insultation, efficient boilers, solar power and other measures that will reduce people’s heating bills and consumption.

For business, we need long-term protection for those sectors that are the lifeblood of our economy. Hotels, restaurants and bars will have to shut their doors if their energy costs increase beyond the point where it is viable for them to keep their doors open. Many were already struggling following the Covid-19 pandemic, and the increased costs for gas and electricity could be the final straw, even with the measures announced today. And this includes community groups – it would be a tragedy if organisations providing social value and help for the most needy were to have to closed their doors.

And we need proper, long term funding for local government and adult social care. This is more vital than ever at a time when services we commission, such as care homes and home carers, are facing rising fuel and staffing costs which will inevitably have to be paid for in increased fee rates.

On the steps of Downing Street earlier this month, Liz Truss promised to ensure opportunity and prosperity for all people and future generations.

Now, more than ever, we in Liverpool need her words to quickly turn into action.