Tory peer calls for welfare boost to counter cost of living crisis

One of Britain’s most prominent retailers has called for a major welfare boost for the poorest as pressure grows on chancellor Rishi Sunak to act on the cost of living crisis.

Stuart Rose, the chairman of Asda and Conservative peer, effectively backed reinstating a £20-a-week uplift in universal credit introduced at the start of the Covid pandemic to help those on low incomes. He said some were seeing “shocking” increases in their bills and warned that the pressures were likely to persist into 2024.

“We’ve got a national economic emergency and we’ve all got to pull together and sort it out,” he told the Observer. “Doing nothing is not an option. We’ve got to act and act fast. Even if things do improve next year, prices will still be going up as inflation falls. The people we need to worry about are those on lower incomes. They are really struggling.”

Rose is the latest senior business figure and Conservative to urge immediate action. Last week, Tesco chairman John Allan called for support, saying there was now an “overwhelming case” for a windfall tax on energy companies to help those suffering the most from the cost of living crisis. Rose said that he was “nervous about a windfall tax” and believed that direct, targeted help to the low paid was a better approach.

Chancellor Rishi Sunak
Chancellor Rishi Sunak said that technical problems in the Department for Work and Pensions had prevented him from raising benefits. Photograph: House of Commons/PA

“I think it needs to be done through welfare – it needs to be carefully targeted,” he said. “It needs to be an intervention which is going to make a significant difference to people. I don’t know how people on lower wages and a couple of kids are going to manage this year. If you’ve got an illness, you provide medicine until you’re cured then take it away. You just have to explain it carefully. People will understand. I would be having a very, very targeted intervention that makes a meaningful difference to people – the equivalent of £1,000 a year.

“It is shocking. This has been coming down the road for months, if not longer. It is shocking that we’ve only just seemed to have seen this coming.

“The second thing to say is this is not going to be temporary. This is going to have a continuing effect on the economy and therefore on consumers through to 2024. That’s a big problem.”

His intervention comes after Sunak said that an old computer system used by the Department for Work and Pensions (DWP) prevented him from raising benefits more in the spring statement. He admitted that citing technical problems “sounds like an excuse”, but had been told there could only be an uplift once a year for people on some benefits.

Several Tories have been pushing for action. Boris Johnson has refused to rule out the introduction of a windfall tax, while Sunak has suggested that it could be an option if energy companies fail to invest in the UK. However, many MPs want tax cuts to be brought forward or help through the benefits system. The government increased benefits by 3% when inflation is running at 7% and is forecast to hit 10% by the end of the year.

Rose, a figurehead in the Remain campaign ahead of the EU referendum, lamented the fact that he felt “you’re not allowed” to cite Brexit’s impact on the cost of living crisis. “It’s the biggest single economic disaster that has happened to this country, and will have a continuing negative effect for some time to come.

“It’s been conveniently camouflaged and ignored because of Covid. It was the best excuse the government ever had to cover up all the bad effects of Brexit. The costs of carriage, insurance, freight, administration and labour have gone up. It has created the issue we’ve got with Northern Ireland. Trade with Europe has gone down by a greater amount than any new trade that we got from foreign forays, where people were rushing around the world saying: ‘We’ve got another trade deal.’ We can’t reverse it, but my goodness, at some point in time somebody needs to be honest and have a proper balance-sheet reckoning. No one wants to be seen as a ‘Remoaner’, but it’s actually shocking. If it wasn’t so shocking, it would be comical.”

He said that he believed a politician would emerge in the next generation willing to champion a closer relationship with Europe again: “There is a young man or woman, probably already around, who will be standing on an orange box in 10 or 15 years’ time, saying: ‘I have this vision.’ I reckon we’ll be back in Europe – with some sort of different structure, but closer to the Europeans in some sort of trading way – by the middle of the 2030s. That’s my prediction.”

The Guardian

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