250,000 households face ‘destitution’ unless chancellor provides immediate support, think tank says

Rampant inflation will push thousands of households into “debt and destitution” unless the government takes immediate action to support falling real incomes, according to analysis by the National Institute of Economic and Social Research (NIESR).

The think tank warns that the squeeze on living standards – caused by the Covid-19 pandemic, Russia’s invasion of Ukraine and Brexit – is being made worse by government policy.

The NIESR calculates that rising prices and higher taxes will leave 1.5 million households across the UK facing food and energy bills which are greater than their disposable income.

The greatest concentration of those hardest hit will be in London, Scotland and Northern Ireland.

”These people, unfortunately, do not have the large amount of savings that better off households have,” says Professor Jagjit Chadha, NIESR’s director.

“They are therefore constrained by whatever income is coming in day-to-day. Essentially, they are living hand-to-mouth and in that world they need support now.”

In Tuesday’s Queen’s Speech, Boris Johnson said the government is taking steps to address the cost of living crisis, but insisted that the government could not fully shield Britons from the impact of soaring inflation.

The prime minister highlighted an existing package of support for households worth £22 billion. The NIESR describes the scale of this response as “inadequate”.

“What we have from government is a ‘wait and see plan’ and ‘let’s do something in six months’ time,’” says Professor Chadha.

“I’m afraid that the bills are coming in now, I’m afraid that households are suffering now.”

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