Gordon Brown: ‘Set an emergency budget or risk a winter of dire poverty’ | Gordon Brown

Written by Javed Iqbal

Boris Johnson and the Tory leadership candidates should agree an immediate emergency budget to tackle the rising cost of living, Gordon Brown has said, or risks “condemning millions of vulnerable and innocent children and pensioners to a winter of dire poverty”.

The intervention from the former prime minister comes as new figures Observer shows that more than 4 million households are on track to spend a quarter of their net income on energy.

“The reality is grim and undeniable: a financial time bomb will explode for families in October as a second round of fuel price hikes in six months sends shockwaves through every household and pushes millions over the edge,” Brown writes in Sunday’s magazine. Observer.

“The more the Conservative leadership election heats up, the more the remaining candidates have resorted to claiming the moral high ground. Raising debt is ‘immoral’, Rishi Sunak say. “High taxes are immoral,” replies Liz Truss. But there is nothing moral about indifferent leaders who condemn millions of vulnerable and blameless children and pensioners to a winter of dire poverty.”

He adds: “Boris Johnson, Sunak and Truss must agree an emergency budget this week. If they don’t, Parliament should be recalled to force them to do it.”

It follows the Bank of England’s gloomy forecast last week that inflation will increase 13% in October. There have also been predictions that UK energy bills could reach more than DKK 3,600 per year this winter.

With increasing pressure for action, senior Labor sources have confirmed to Observer that the party is preparing to back a key intervention to stem the winter crisis, in addition to removing VAT on energy bills, which it has already supported.

Labor leader Keir Starmer and Rachel Reeves, the shadow chancellor, have yet to finalize the package but have concluded that major action is needed. “We recognize that this is an emergency and it requires a response that matches the moment,” a senior Labor source said.

Brown’s call for immediate action was backed by shadow climate change secretary Ed Miliband. “Families across the country are facing a catastrophic increase in energy bills,” he said. “Meanwhile, the Tories are lacking in action and the two leadership candidates have nothing to say about the cost of living.

“The Government urgently needs to provide more support to help people cope this winter, including per scrapping the Tories’ tax breaks for oil and gas producers, which earns record profits at the expense of bill payers.”

The Energy Surplus Levy also delivers 91p of tax savings for every £1 of investment made by businesses.
The Energy Surplus Levy also delivers 91p of tax savings for every £1 of investment made by businesses. Photo: Bluegreen Pictures/Alamy

It comes as Observer has been handed new research that exposes the extent of the looming crisis. By January, there will be 4.2 million households – or around 11.6 million people – spending more than a quarter of their net income on fuel, according to a study by York University’s Social Policy Research Unit.

It also found that more than 3 million households will spend at least 30% of their net income on fuel in January.

A separate report by Professor Donald Hirsch at Loughborough University found that existing government support for low-income households does not cover the shortfalls they now face. Some families will be up to £1,600 worse off a year, the survey found.

Matt Copeland, head of policy at the National Energy Action Group, said the poorest could be protected with the right action. “With energy bills so high, this winter will be a nightmare for millions in the UK,” he said. “However, we would like to make it clear that this can be avoided. The UK Government has the power to rescue millions from the throes of cold homes, crushing debt and uncertain coping tactics.”

Rishi Sunak
Rishi Sunak has backed scrapping VAT on energy bills. Photo: Jacob King/PA

Brown said local charities he knew were now stocking up on blankets, duvets, sleeping bags and hot water bottles as they prepare for “the worst winter in living memory”. He said it would have a devastating impact on child poverty. “Britain is creating a left-out generation of young boys and girls, without the money to participate in what their friends are doing, whose childhoods are beginning to look like shameful scenes from a Dickens novel,” he writes.

He has now joined dozens of faith groups, charities and local politicians to urge the government to act quickly.

There are no plans for the leadership candidates to agree to any joint program before the appointment of a new prime minister next month. Asked how she would help those affected by high energy costs, Truss said last week that she would help to lower taxes instead of through “handouts”. She has backed cuts in national insurance and a suspension of green fees on bills.

Sunak has supported scrapping VAT on energy bills, but wants to prioritize tackling inflation. “High inflation is a concern for everyone right now,” a campaign spokesman said. “We need to do everything we can to tackle inflation and quickly. There is no doubt that the country is facing a tough winter – we need to be honest with people about that. As Prime Minister, Rishi will look at any possible leverage available to help those struggling with higher prices and their bills.”

A Downing Street source said Johnson believed major fiscal decisions should be left solely to the next prime minister.

A government spokesman said: “We know that rising prices caused by global challenges are affecting how far people’s incomes go and many will be concerned about the latest economic forecasts. We have taken ongoing action to help households by phasing in support for worth £37bn over the year, which includes specific support to help people through the difficult winter ahead.

“Eight million of the most vulnerable households will see an extra £1,200 of support, paid in installments over the year, and everyone will receive £400 over the winter to help with energy bills. That’s on top of earlier this year, including a record fuel duty cut and a National Insurance reduction worth up to £330 a year for the typical employee.”

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Javed Iqbal

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