Money Matters: How could the new government help ease the cost-of-living crisis?
In this week’s Money Matters column, Wrekin’s debt and energy manager Dan Bebbington sets out what our new government is promising to do to help ease the cost-of-living crisis.
As the dust settles after the election, or new Prime Minister is now faced with the task of delivering on all the promises made during the campaign.
Sir Keir Starmer and his Labour government have pledged to address things like stagnating wages and child poverty, while keeping taxes down, creating jobs and supporting people into work.
It was enough to win the country’s trust, and now our new government needs to deliver.
We are hoping to see a number of policy changes over the next few months and years which will have a positive impact on your household finances, whether that’s outgoings like energy costs or childcare bills, or income such as wages, pension or benefits.
The government wants to bring down energy bills and create jobs by setting up a publicly-owned energy company, Great British Energy, to invest in renewables and reduce our reliance on oil and gas.
It’s hoped this will bring the average household’s bills down by £300 a year, which would be a welcome relief following the energy crisis of the last few years.
To help parents and tackle child poverty, free breakfast clubs are to be launched at every primary school, and 3,000 nurseries will be opened to help deliver funded childcare hours.
Schools will also have to limit the number of branded items of uniform they can require parents and carers to buy.
To ‘make work pay’, the government wants to improve wages and working conditions, while helping more people into work. This will include more targeted support for people with long-term health conditions and disabilities, as well as a guarantee for all 18-to-21-year-olds that they will have an apprenticeship, training or be helped to find work.
It will raise minimum wage to a ‘genuine living wage’, taking into account the cost of living, but we don’t know yet how much it will go up by.
There is also a welcome pay rise in store for younger workers, with the age bands on minimum wage set to be scrapped so everyone is paid the same.
To further help workers, Labour will also ban what it calls “exploitative” zero hours contracts and “fire and rehire”, giving people more security over their jobs.
We’ve also had assurance that income tax and VAT won’t be going up, and the pensions ‘triple lock’ will be maintained.
However other measures that would have had an immediate impact on struggling households have not been promised – including scrapping the two-child limit for benefits, and raising the tax-free personal allowance from the current £12,570.
The continued freeze on the tax-free allowance could impact pensioners further down the line, as the state pension is expected to go over this amount in just a few years. But there is time for the new government to revisit this.
And despite these missed opportunities, there is plenty to be optimistic about.
As always, Wrekin Housing Group customers who are worried about their personal finances can contact our Money Matters team.
11th July 2024