There could be a second winter of discontent ahead, senior conservatives fear, with people’s personal finances pushed to breaking point, health services at risk of collapsing and the threat of Covid restrictions returning.
Energy price hike
UK gas prices have quadrupled over the past year to record levels well above those in neighboring countries, and are expected to remain high during the colder months. This has also increased the cost of carbon dioxide, which is in short supply because factories producing it for the food industry have had to work fewer hours to cut energy costs. The gas price hike has already seen many companies go bankrupt, as they cannot fully pass on the increase to customers due to the energy price cap, which will not be revised until next spring.
For now, consumers should be partly shielded from escalating costs, but people whose energy companies are collapsing will be charged a tariff of last resort by another supplier’s Ofgem, and so may end up paying much higher bills than they did before. satiate Shortages also have dire consequences: gas is used to make dry ice to keep food fresh for transportation, to cool nuclear reactors, and to stun poultry before slaughter. Ministers had to save a company that stopped producing carbon dioxide2 – But the deal only lasts for three weeks.
Lack of food and fuel
Ministers are confident that the CO2 shortage is temporary. However, there are other serious problems that can threaten the food and fuel supplies. The UK has been suffering for months with a shortfall of 90,000 truck drivers delivering such goods, exacerbated by new immigration rules after Brexit. The government is divided over what to do next. Any steps to recruit more drivers will take time, prompting supermarkets to privately express concerns to the government that their shelves may be more empty than usual at Christmas. BP also said some front-end outlets would be closed, and 100 of them lacked at least one grade of fuel, while Esso said a few of its gas stations operating alongside Tesco Express stores were affected. Queues have been seen forming outside petrol stations in some parts of the country, and ministers are worried about panic buying masses like those seen at the start of the first lockdown.
Covid restrictions – and the new changing threat
Although Johnson is known to be fiercely opposed to another lockdown, he has not ruled out a return to some of the stricter restrictions seen last winter. The government is acutely aware of how unpopular it has fallen in the run-up to Christmas 2020, when tens of millions of people were promised they would meet family and friends, but then their plans were scrapped with a few days’ notice – before the ‘stay at home’ message returned to England for a third time.
While the vaccine has raised hopes that measures such as social distancing and wearing masks will not be needed again, they are being kept in reserve in case the situation deteriorates. A long-awaited decision to offer scones to 12 to 15-year-olds was finally announced, additional shots were released for those over 50 who are clinically impaired, but still more than 10% of those eligible did not get their first vaccine. . And if a new variant that is resistant to current vaccines emerges, or immunity is significantly diminished in those that have already been vaccinated, there will be a real problem.
Although politicians struggle to say the pandemic is not yet over, there are significant concerns within the government about people not coming forward for treatment and other tests, which means thousands of cancer diagnoses are missed and non-urgent operations are being pushed even further. Back. Ministers have pledged around £12 billion to try to speed up the backlog (as well as fund social care changes that won’t start until 2023), but they are concerned about the pressure the NHS will be on. Under due to a combination of Covid and a particularly bad flu season.
Comprehensive credit cut – and a looming tax hike
From October, millions of universal credit claimants will see the £20 increase that has kept many afloat during the pandemic disappear. In an effort to head off protest, the Department of Work and Pensions has asked the Treasury to allow workers receiving the benefit to keep more of their earnings. This would include lowering the “gradual rate” from 63 pence to 60 pence, which could cost the government around £1 billion a year. If the chancellor, Rishi Sunak, agrees, the measure may be announced in next month’s budget. Moreover, the 1.25 percentage point increase in National Insurance contributions for both workers and businesses will take effect from April 2022 – the so-called “Health and Social Care Tax”. This is likely to further strain the personal finances of low-income families.