CHURCH leaders and charities have urged the Government to reform the tax system, stabilise the economy, and act quickly on the cost-of-living crisis, which, they say, is driving millions more households into poverty.
On Tuesday, Church Action for Tax Justice called on the new Chancellor, Jeremy Hunt, to address wealth inequality by taxing the wealthiest people in the UK, who, the charity said, had “prospered” during the pandemic, while key workers who had kept the country running were being “particularly poorly served”.
In an open letter, which is signed by church leaders including the former Archbishop of Canterbury Lord Williams and the Archbishop of Wales, the Most Revd Andrew John, the charity says: “As you will be painfully aware, this is an especially challenging time (financially, and in many other ways) for the vast majority of ordinary people in this country. . .
“Rising inequality is damaging for rich and poor alike, in both societal and economic terms. Income inequality leads to inequalities of outcomes and higher inequality is linked to increased economic instability, rising crime levels, and increased burdens on the health and social care systems.”
The letter expresses concern over the Prime Minister’s economic policy, including tax cuts and a “lack of enthusiasm” for redistribution. “We are concerned that the combined impact of these potential cuts and a failure to redistribute will lead to a more regressive system, favouring the wealthy and limiting opportunities for poor and middle-income families to improve their situations.”
It asks for “bold and compassionate action to reform the tax system, through the introduction of wealth taxes targeted specifically at reducing the scourge of inequality”.
The Archbishop of Canterbury has also criticised tax cuts for the rich. In an interview with The Guardian in Australia this week, he said that he was “deeply sceptical about trickle-down theory” (News, 14 October) and could see “no moral case” for a Government that set budgets that disproportionately affected the poor.
The current economic uncertainty in the UK, to which Brexit, Covid, the Russian war on Ukraine, and the cost-of-living crisis have contributed, has been exacerbated by political chaos this week.
Liz Truss sacked Kwasi Kwarteng as Chancellor last Friday after his mini-Budget caused market turmoil (News, 23 September). She appointed her former leadership rival Mr Hunt as Chancellor, who, within days, dismantled Mr Kwarteng’s strategy, scrapping almost all of the tax cuts. Ms Truss later apologised for making mistakes, but insisted that she would lead the party into the next General Election.
On Wednesday, however, she was struggling to hold on to power after a series of polls projected that a General Election would result in a 1997-style landslide for Labour and that most of her party lacked confidence in her premiership. Several of her MPs have called for her resignation.
On Thursday, Ms Truss announced her resignation as Prime Minister, after 44 days in office. Speaking outside Downing Street, she said that she was unable to deliver on “the mandate on which I was elected by the Conservative Party”.
Responding to Mr Hunt’s statement, specifically the reduced support with energy bills from two years to six months, the director of external affairs for Christians Against Poverty, Gareth McNab, said that the previous timescale had been a “big relief” to many households. “While restoring confidence to markets was clearly necessary, the failure to restore confidence to households who are facing poverty and destitution this winter is deeply concerning.”
On Tuesday, the Bishop of St Edmundsbury & Ipswich, the Rt Revd Martin Seeley, warned that nearly one quarter of households in Suffolk could enter fuel poverty by the end of the year. He also said that many Suffolk households would not benefit from the cap on gas prices because they did not have access to gas.
‘‘We are hearing of pensioners having to go back to work to make ends meet, and more young working parents in Suffolk coming with embarrassment for the first time to a food bank or a top-up shop to be able to feed their family. Please do not make this situation worse.’’
On Wednesday, inflation rose above ten per cent for the second time this year (having dipped to 9.9 per cent in August). Prices have risen by almost 15 per cent compared to a year ago.
In a new report, Inside the Cost-of-Living Crisis: The experiences of young people living at YMCA, the supported living charity calls for benefits to be increased in line with inflation (rather than earnings) and for an increase in local-authority grants to meet need in communities (for example, for food- or winter-clothes vouchers).
The report also recommends that the Government amend the £400 energy rebate to include people in supported living, and more generally address the “systematic issues” of moving on from supported accommodation and finding employment.
Under-25s who are single claimants of welfare benefits receive an income about 20 per cent lower than those aged 25 and above, the report says. “The uprating enacted in April 2022 actually reflects a real-term cut when taking into consideration today’s inflation rate.”
Last week, when Mr Kwarteng was still Chancellor, the leaders of 27 charities, including the Children’s Society and Save the Children UK, had urged him in an open letter to increase benefits in line with inflation for the sake of the 200,000 children on the brink of poverty. “Hard-working families” were facing an average monthly loss of £1061 if benefits were not increased in line with inflation, they warned.
“We hear from our frontline professionals that many simply will not cope — and we know that it is children that will pay the price. Ordinary families frankly need more support, not less.”