“If I didn’t come here, I wouldn’t eat,” says Julia Heathcote, a 57-year-old former pub owner, as she stands in line at the entrance of a weekly charity grocery sale. “I would rather be running it, finding the funding to put the food on the table for other people.”
Heathcote is at St Mary and St Botolph Church in Ipswich, a town in eastern England. In this marginal seat, which turned Conservative in the last general election, the effects of a cost of living crisis, driven by a surge in household bills alongside the tapering of work support and universal credit, are being writ large.
The squeeze on living costs will be hardest for the poorest families, according to Financial Times calculations, as they are the group most likely to receive benefits and allocate a greater share of their spending to the necessities of food, gas and electricity.
On Wednesday Rishi Sunak, the chancellor, announced a 6.6 per cent increase to the national living wage from next April, with officials arguing that rising wages and a buoyant jobs market will help cushion the impact of higher prices.
At St Mary’s, people are invited to pay £2 in exchange for a food shop with items donated from supermarkets and FareShare, an organisation that helps redistribute excess produce from farms to feed vulnerable communities.
“I never ever thought I would be walking through this door to get food, but here I am,” says Heathcote. “You are only ever two pay packets away from poverty if you haven’t got savings, or some form of structure of support.”
Responding to the Budget on Wednesday, Heathcote said she was disappointed it failed to “mention any increase for employment support allowance or personal independent payments”. The announcement did little to help her personal situation, she added.
“The increase on wages will reduce the amount people might be able to afford for their carers, which might reduce the hours people can afford them.”
In the queue of about 40 people stand single parents and families who are facing sharp rises in their winter bills, as well as higher goods prices with inflation heading towards 5 per cent, according to the Bank of England.
The end of the furlough scheme in September has added to financial pressures for some, with about 1.6m people still fully or partly furloughed at the start of August, while the plan to increase national insurance contributions by 1.25 percentage points of salary for both employers and employees next April, means tax rise are on their way.
Forced to stop working four years ago after being diagnosed with both chronic fibromyalgia and breast cancer, Heathcote relies on the employment support allowance and the personal independence payment.
Educated privately, she enjoyed full-time employment and earned a healthy salary before her diagnosis. “I had a good income and used to work a 50-hour week while raising three children on my own, I had a busy and productive life. When it crumbles there’s nothing but the benefits system to rely on.”
One woman using the pop-up, who asked to remain anonymous, said she works in a local shop six days a week where she can see food prices go up in real time as her wages stagnate.
“I am here because I can’t afford some of the food I used to get,” she says. “I go without a lot. I have people moaning at me about the price of food in the shop but it’s nothing to do with me. It’s scary, everything is jumping in price but my wages just aren’t.”
Sarah Woolven, 45, looks after her three children and volunteers while her husband works as a delivery driver. “The cost of shopping is going up and we are struggling even though my husband works full-time,” she says.
At the same time as food prices increase due to supply-chain shortages, soaring transport costs and other disruptions caused by the Covid pandemic, energy bills are rising.
Cornwall Insight, an energy consultancy, has forecast that energy costs will rise by at least 30 per cent from April for homes that consume both electricity and gas, as wholesale gas prices continue to surge, forcing some households into desperate measures such as rationing their heating over the colder months.
Reverend Maureen Bonsall, who runs the pop-up at St Mary’s, says she is concerned by the rising number of people coming.
She believes the chancellor’s decision to end a temporary uplift to the main welfare benefit is to blame. The £20-a-week increase to universal credit was introduced at the start of the pandemic to help people hit hardest. The additional funding, which cost £6bn a year, ended on October 6.
“When you say £20 a week that doesn’t sound like a lot,” says Bonsall. “But when you say £90 a month . . . there’s a lot can you do with £90 and that’s a big chunk to lose from your income.”
John Sherman, 54, is distributing poppies in a local Starbucks, as a volunteer with the Royal British Legion. As one of the 6m people who claim UC, he works too as a security guard for an agency on a zero-hours contract. His hours vary each week, as does the rate of pay depending on which company he works for.
The uplift meant it was worth working extra hours, he said, whereas the current taper rate system means he loses more than half of any additional income he receives.
The current benefit’s taper rate means Sherman loses 63p in every pound he earns that exceeds his work allowance. “When we had the extra money it was all right because you could work those extra hours,” he said. “Now it’s gone and they take 63p of every pound extra you make. Taking away that uplift has made it worse.”
This will now change after Sunak used Wednesday’s Budget to announce a reduction in the taper rate from 63 per cent to 55, which will come into force no later than December 1. However, the move will not benefit the 50 per cent of people who receive UC and do not work.
Sherman says his personal finances have also been hit by the sharp increase in fuel prices, which have risen as the global economy restarted after a series of coronavirus lockdowns and supply-chain disruptions.
Sunak also used his Budget to announce a planned rise in fuel duty will be cancelled, which he said would save £8bn. Fuel duty has been frozen for the 12th year in a row.
“Going to and from work is costing me £80-£100 a week [up from £60-80]”, Sherman said. “Universal credit don’t take these things into account, they only consider your wages.”
The benefit uplift meant he could buy things like apples, he said. “They have become a luxury, I can’t afford to get my five fruit and veg a day now. Everything is going up and up, but universal credit doesn’t.”
At St Mary’s, Heathcote said she had been a “staunch Conservative” all of her life but that had now changed. “It’s only now, as my own life has crumbled through ill health, that I realise somebody has to look after the vulnerable.”