While Jeremy Hunt confirming in the Autumn Statement that benefits and pensions will rise in line with inflation was “somewhat relieving”, millions of people across the country will find it “very difficult” to cope with the cost-of-living crisis continuing into 2023, believes Martin Lewis, the personal finance adviser.
Alongside the 10.1 per cent increase in benefits, the Chancellor’s statement yesterday (17 November) included an extra £1bn for the Household Support Fund, which allows councils to give one-off, targeted support to struggling residents. The policies were “reasonable” attempts to help the vulnerable, Lewis said, within “the understanding that this is a Conservative Party government”.
“It is still going to be a very difficult time for many people over the next year and a half, but this could have been a lot worse,” he said. “To be fair to Jeremy Hunt, the tone has changed from the Truss-Kwarteng era. I had a real fear that we were going to see benefits [and pensions], even in the middle of a cost-of-living crisis, not even get uprated in line with inflation.”
“The inflation car is running away from people and the question is, how much help [can] we give people to catch it? And had [the government] not done this, then the poor would have been falling even further behind.”
Lewis is quick to say that he is not taking a view on Hunt’s repeated line that his Autumn Statement was “compassionate”. “I’m not going to get involved in moral judgements,” Lewis said. “My point is, as this is a Conservative government – and we all know what that stands for – you expect Conservatives to lower taxes and lower spending, and certainly lower benefits… [but] this has been somewhat relieving compared to what it could’ve been.”
In March Lewis, who founded MoneySavingExpert.com, told the BBC Sunday morning politics show that he was “virtually out of tools” to advise society’s poorest who had already cut back on everything. That’s still “absolutely” the case, he says. “I feel sick. Those [who] cut back everything, there is nothing I can do.”
Even those above the poverty line will struggle, Lewis warned, as government support for the high cost of living, such as the energy price guarantee, is reduced over the next year. “The primary austerity for individuals is coming from inflation,” he said. “If we just take energy bills, this winter we’re [paying] double what we were last winter. But next winter we know that unless there’s a real drop in wholesale prices, the vast majority of people will be paying around 40 per cent more than they are this winter.
“I will leave it to those in the political sphere to define that and whether that is austerity, or whether that’s worldwide economic factors, but the reality is incomes are squeezed [and] expenditure is increasing. That’s not a good recipe.”
Lewis said there had been a cost for speaking out “in a more political way – never party political, but a more political way than ever before”. He said that he had suffered severe anxiety. “It’s very frustrating to see when you’re dealing with people’s lives, political games being played,” he said, referring to the failures of Liz Truss and her staunch defence of trickle-down economics. “It’s been a very difficult year for me personally, but nowhere near as difficult for the many people who are struggling to feed their family.”
Next year is “arguably going to be even tougher than this year” for millions, he predicted. “When I talk to my team at Money Saving Expert, I like them to understand the genuine impact of the work that we do and how many people rely on the information that we provide. I’ve talked to them about 2023. We have to keep our foot on the pedal – we have to keep going because this is far from over.”
[See also: What does the Autumn Statement mean for levelling up?]