Last week, the Bank of England released its inflation forecast for the rest of the year. It projected an overall inflation rate of 10% by December, following an official rate of 7% throughout March.
Recently, however, the chairman of Tesco John Allan appeared on BBC Radio 4 to explain that the cost of many essential goods is rising even faster than the general inflation figures indicate. “There is no doubt at all,” claimed the supermarket chief, “people who have never had to go to a food bank are now having to do so. We are seeing real food poverty for the first time in a generation.”
Allan then added: “This cost-of-living crisis, people talk about percentage increases but actually it’s absolute increases for many people—and the people on the lowest incomes. The hardest pressed. It’s much, much more serious—and much more difficult to cope with than those on higher incomes.”
Analysis by The Spectator data team reveals that, as compared to March 2021, the price of margarine was up 34% last month. At the same time, the cost of fuel increased by 30% and lamb by 17%, while milk, butter, and pasta all rose by 10%. Of course, when the price of petroleum has skyrocketed by 30%, it is very little consolation for low-wage customers to discover that gym membership fees have risen by, say, 3%. In this respect, the general figures for inflation—which take into account everything from luxuries to essentials—inevitably downplay the harsh reality lived by the poorest who suffer its consequences.
Meanwhile, unlike in Hungary, wages have failed to keep pace, thus weakening the purchasing power of the average consumer. According to a frequently updated Spectator graph, private sector wages are up 6% and public sector wages up 2%. Moreover, the Chancellor Rishi Sunak is facing pressure to be more generous with government welfare, which since the onset of rampant inflation has increased by just 3.1%.
This ongoing crisis is much more important to ordinary Britons than the blow-ups over #Partygate and #Beergate, however illustrative those scandals might be as case studies in hypocrisy. The cost of living squeeze is also more likely than the string of mid-lockdown Downing Street parties to cause long-term trouble for the British Conservative government. After all, having campaigned during the 2019 general election on a promise not to increase taxes, last month the government raided the pockets of the poor by increasing National Insurance by 1.25%.
In his remarks to Radio 4, the Tesco chief criticised the Chancellor for exacerbating food poverty with this untimely National Insurance hike: “It’s hitting people on modest incomes disproportionately,” said Allan, “and it’s absolutely the wrong time to do it. If I were in government, I’d roll that back.”
It is no wonder that Kit Malthouse, the Minister for Policing, disregarded ‘collective responsibility’—a convention in British politics requiring that Cabinet disputes remain private—to call publicly on Sunak to lower taxes. Malthouse also said that the government would rule out “nothing,” up to and including an emergency budget, to address the cost of living crisis.
