He added: “We hear of people unable to cook the food they rely on from food banks as they cannot afford to switch on the oven or hob; families limiting themselves to one shower per week; and elderly people riding buses all day to stay warm.”
Ofsted increased the energy price cap by 54 per cent earlier this month, squeezing the budgets of 22 million households and marking an average £700 increase in annual energy bills for those who pay by direct debit. Economists have warned that, as global wholesale gas prices remain at a high and Russia’s war in Ukraine puts further pressure on supply, the cap could rise again in October.
These “terrible situations are not inevitable”, Birt said. This week, benefits increased by just 3.1 per cent – less than half of inflation – meaning a real-terms cut to the incomes of the UK’s poorest households as the cost of living accelerates and a 35-year low for the value of unemployment benefits.
This means that though the social security system is “designed to deliver financial support to people who need it most”, Birt said, Chancellor Rishi Sunak has “simply refused to use it”.
“His failure to recognise the seriousness of the situation will lead to more people being sucked into the kind of grinding daily hardship that is very difficult to escape,” Birt said.
Around 600,000 more people could be pushed into poverty in the months ahead as the prices of essentials outpace wages, according to JRF analysis, a quarter of whom are children.
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“The government must, at a minimum, ensure that benefit rises match the real rise in living costs as an immediate first step to protect people from hardship,” Birt said. “Beyond this, the government needs to further strengthen our social security system, which was already woefully inadequate even before the cost of essentials began to shoot up.”
The cost of living crisis will “continue to worsen before it starts to ease at some point next year”, according to Jack Leslie, senior economist at the Resolution Foundation, who warned that people are experiencing “the biggest squeeze since the mid-70s”.
Labour market figures released this week showed that real-terms basic pay had sharply dropped well below inflation, but that those in the finance and business sectors actually saw a rise in their earnings, driven mostly by big bonuses.
Chancellor Rishi Sunak said: “I know this is a worrying time for many families, which is why we are taking action to ease the burdens by providing support worth around £22bn in this financial year, including for the most vulnerable through our Household Support fund.”