At last night’s meeting, Cabinet declared a ‘Cost of Living Emergency.’ Acting on behalf of the whole Council given its urgency, a motion was carried which demands that the Government takes the following measures:
- Immediately reduce the standard rate of VAT from 20% to 17.5 % for one year, saving the average household in Eastleigh a further £600 this year;
- Immediately re-introduce the pensions triple lock to support Eastleigh pensioners;
- Immediately restore the Universal Credit supplement of £20, which as cancelled by Government in September 2021; and
- Immediately change taxation on fuel to transfer the risk of price changes to the Government, with fuel prices pegged at long-term average prices
Councillor Keith House says: ‘This is a very real crisis that is of grave concern to many of our residents; the Government must take definitive action now to protect those who are most vulnerable, as a local authority we will do everything in our power to support our residents during this worrying time, but more must be done at central government level to alleviate this crisis.’
As requested by the motion, a letter has been sent from the Council to the Chancellor of the Exchequer and the Secretary of State for Work and Pensions
The full motion, brought forward by Cllr Liz Jarvis can be found below
Cost of Living Emergency
Motion by Cllr Liz Jarvis, updated at Cabinet, 7 July 2022
Cabinet notes the impact of increased prices and taxation and that:
- a) On 1 April 2022, Ofgem increased the energy price cap by 54%, increasing the average standard tariff energy bill by £693 per year and the average pre-pay meter energy bill by £708 per year (Ofgem, 2022);
- b) The energy price cap is expected to rise by 42% in October;
- c) Latest ONS data shows average households are now spending more than £5,780 a year on food, drink and clothing, £425 more than a year ago. Meanwhile record petrol and diesel prices mean that a typical Eastleigh family re-filling their car twice a month pays an additional £620 a year;
- d) On 6 April 2022, the Government increased National Insurance by 1.25%, which is projected to cost the average family in Eastleigh an additional £600 per year;
- e) The hit to families from soaring food and fuel prices is being practically doubled by an additional £638 in extra National Insurance, Income Tax and VAT this year;
- f) Inflation is currently at a 40-year high of 9.1% and expected to rise to 11% by October;
- g) So far Eastleigh Basics Bank has provided food for 1,188 people in 2022 – 614 adults and 574 children, which is up by over one-third compared to pre-pandemic levels, and that other foodbanks in the Borough will have similar figures. The soaring cost of fuel and food will inevitably mean that many of our local residents will face a tough time in the months ahead; and
- h) While the Government has announced it will reinstate the triple lock for pensions next year, by suspending it for 2022/3, Eastleigh’s 19,437 pensioners will see a rise of 3.1% this year (instead of 8.3% under the triple lock formula) costing pensioners in Eastleigh hundreds of pounds.
Cabinet further notes the decision taken in June 2022 to impose a ‘Windfall Tax’ on the super-profits of oil and gas companies and to redistribute this as a one-off payment of £400 to households later this year. Cabinet notes that the Windfall Tax was first proposed by Sir Ed Davey MP, Leader of the Liberal Democrats, in January 2022. Cabinet welcomes the Windfall Tax, but believes it does not go nearly far enough and the Government should be doing much more to support local people through the Cost of Living crisis.
Given the urgency of the situation, Cabinet acts on behalf of Eastleigh Borough Council in declaring a ‘Cost of Living Emergency’ and calls on the Government to:
1 – Immediately reduce the standard rate of VAT from 20% to 17.5% for one year, saving the average household in Eastleigh a further £600 this year;
2 – Immediately re-introduce the pensions triple lock to support Eastleigh pensioners;
3 – Immediately restore the Universal Credit supplement of £20, which was cancelled by the Government in September 2021; and
4 – Immediately change taxation on fuel to transfer the risk of price changes to the Government with fuel prices pegged at long-term average prices.
Cabinet asks the Chief Executive to send a copy of this motion to the Chancellor of the Exchequer and the Secretary of State for Work and Pensions.
Cabinet further notes the long-term benefits to residents through the Council’s 19-year record of setting Council Tax at 1% below CPI each year and commits to continue this policy to help tackle the regressive nature of Council Tax, and commits to review the local Council Tax Reduction Scheme in light of the Cost of Living Emergency.
Cabinet further notes the increasing demand on food banks and looks to continue to support our local communities and voluntary sector to work towards an outcome where foodbanks are not needed in what is still one of the world’s richest countries.
Cabinet resolves that it will seek to consider the Cost of Living Emergency in policy and financial decisions.