Boris denies claims supply chain chaos just part of ending UK’s ‘low wage’ economy

How inflation threatens families and the public finances 

Headline CPI inflation has been spiking, reaching 3.2 per cent in August, and is expected to reach double the Bank of England's 2 per cent target

Headline CPI inflation has been spiking, reaching 3.2 per cent in August, and is expected to reach double the Bank of England's 2 per cent target

Headline CPI inflation has been spiking, reaching 3.2 per cent in August, and is expected to reach double the Bank of England’s 2 per cent target 

With inflation set to peak above four per cent, this will likely cause the price of everyday goods – from food to fuel – to rise.

Supermarket food shop

Last year, the average household spent £277 a month on food expenses, but the latest inflation reading suggests this could increase to £285 a month this year.

Price of a pint

The average price of a pint in the pub across the country could soon pass £4, the ONS has said.

Fuel cost

In August this year – when the UK’s headline CPI inflation rate hit 3.2 per cent – average petrol prices reached 134.6 pence a litre, making an average tank of unleaded petrol cost around £74.

That price hike is compared with 113.1 pence a litre a year earlier, when travel was reduced due to the coronavirus lockdown restrictions.

If inflation tips over the 4 per cent mark, the average price of a tank of fuel could hit £78, and that is without factoring in any supply chain pressures or global issues which make the cost rise further.

How inflation has hit other countries

Inflation has long been seen as one of the biggest threats to economies.

In extreme examples, it has spiralled out of control and sparked panic.

The German Weimar Republic effectively collapsed after the value of the mark went from around 90 marks to the US dollar in 1921 to 7,400 marks to the dollar in 1921.

In Zimbabwe between 2008 and 2009 the monthly inflation rate was estimated to have reached a mind-boggling 79.6billion per cent.

Although inflation has faded in the minds of Britons who have become used to ultra-low interest rates and stable prices, it caused chaos in the 1970s.

Deregulation of the mortgage market, the emergence of credit cards and an overheating economy drove the rate to an eye-watering 25 per cent in 1975.

People would rush to buy goods with their wages after pay-day, as the costs were rising so quickly.

Strikes erupted as there was pressure for pay packets to keep pace with prices.

Unemployment rose as the economy tipped into recession, and the government had to pump up interest rates in a bid to bolster the pound and control the surge.

That meant mortgage interest payments spiked into double digits.

And as a result servicing the national debt became a serious problem. 

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Furious business chiefs accused Boris Johnson of ‘buck-passing’ today after he defiantly dismissed fears over spiking inflation and supply chain chaos today, saying it is not his job to fix all the problems.

In a flurry of interviews ahead of his keynote speech to Tory conference tomorrow, the PM denied that the country is in ‘crisis’, comparing the disruption to a ‘giant waking up’ and ‘creaking’ after the pandemic.  

Despite Cabinet ministers telling MailOnline they were concerned about ‘complacency’ about inflation, now on track to be double the Bank of England’s target, Mr Johnson said he was not ‘worried’ about it running out of control.

He also pushed the responsibility for solving the problems back on the private sector, insisting it is ‘not the job of government to come in and fix every problem’. 

Referencing Margaret Thatcher’s 1980s dictum – which ironically she used to stress the need to control inflation in a market economy – Mr Johnson said: ‘In a famous phrase, there is no alternative. There is no alternative.

‘The UK has got to – and we can – do much, much better by becoming a higher-wage, higher-productivity economy.’

But he admitted that Christmas might only be better from a ‘low base’ amid fears of ongoing shortages – after it was effectively cancelled during the pandemic last year.

And he conceded that the government’s efforts to bring in more lorry drivers from abroad are having limited success, with just 127 having applied for emergency visas.  

The uncompromising line from Mr Johnson came as new figures showed pump prices have hit 136.10p per litre, the highest level since September 2013. 

Tensions were also inflamed further by Mr Johnson releasing a series of videos of him drinking beer, buttering toast and eating fish and chips to promote his ‘Build Back Better’ slogan. 

Liz Barnes, managing director at Lewes-based wet wipes firm FreshWipes said: ‘If he likes alliteration, Boris can shove his butter up his backside.’

Others raged that Mr Johnson should be focused on solutions rather than ‘stuffing his face with chips’.  

Foreign Secretary Liz Truss has warned that firms will be to blame if the festive season is blighted by shortages and price rises.

One Cabinet source told the Telegraph that companies have been ‘drunk on cheap labour’ and failed to plan for the changes. 

But industry has warned of an estimated shortfall of 100,000 HGV drivers, with the threat of empty shelves if the shortages are not addressed.

They said the government’s visa offer is not ‘attractive’ enough to draw in the people they need immediately. 

In other developments at the Tory conference builds towards the leaders’ speech: 

  • Mr Johnson has branded Insulate Britain protesters ‘irresponsible crusties’ as Priti Patel unveiled tougher measures to stop them blocking roads;
  • The PM called for people to return to offices warning otherwise they will be ‘gossiped’ about and miss out on ‘stimulus’ and ‘competition’;
  • Mr Johnson clashed bitterly with the BBC’s Nick Robinson in his first Today programme interview in two years;
  • The premier refused to rule out calling an early election but insisted he is focused ‘on the job at hand’; 
  • The number of offenders forced to wear electronic tags will double under a major initiative from Dominic Raab;
  • The PM ruled out making misogyny a hate crime, saying there are ‘abundant’ existing laws that should be enforced to tackle violence against women;
  • Civil servants still working from home were told to ‘get off their Pelotons and back to their desks’ today by Tory party chairman Oliver Dowden 







Boris Johnson pictured writing his Conservative Party conference speech at the Midland Hotel in Manchester today

Boris Johnson pictured writing his Conservative Party conference speech at the Midland Hotel in Manchester today

Boris Johnson pictured writing his Conservative Party conference speech at the Midland Hotel in Manchester today 








In a round of interviews at the Tory conference in Manchester, the PM insisted the country is at a 'turning point' as businesses are weaned off cheap labour after Brexit

In a round of interviews at the Tory conference in Manchester, the PM insisted the country is at a 'turning point' as businesses are weaned off cheap labour after Brexit

In a round of interviews at the Tory conference in Manchester, the PM insisted the country is at a ‘turning point’ as businesses are weaned off cheap labour after Brexit

Mr Johnson tried out a bike as he toured stands at Tory conference in Manchester this morning

Mr Johnson tried out a bike as he toured stands at Tory conference in Manchester this morning

Mr Johnson tried out a bike as he toured stands at Tory conference in Manchester this morning 

The premier also tried out a hydrogen car as he was shown around the stands at the conference centre today

The premier also tried out a hydrogen car as he was shown around the stands at the conference centre today

The premier also tried out a hydrogen car as he was shown around the stands at the conference centre today

Boris Johnson compared the current disruption to a 'giant waking up', saying it was what you would expect of the global economy recovering and 'sucking in demand'

Boris Johnson compared the current disruption to a 'giant waking up', saying it was what you would expect of the global economy recovering and 'sucking in demand'

Boris Johnson compared the current disruption to a ‘giant waking up’, saying it was what you would expect of the global economy recovering and ‘sucking in demand’

Mr Johnson’s broadcast round included his first interview on BBC Radio 4’s Today programme in two years.

Has Boris just had his ‘Ratner moment’? When politicians and business leaders have said things they come to regret 

Boris Johnson’s comments today could come to be seen as his ‘Ratner moment’. Here are six other famous gaffes by politicians and businessmen:

Gerald Ratner: The jewellery company boss jokingly referred to a set of decanters sold by the company as ‘total c**p’ during a speech in 1991, which almost led to the business collapsing. The share price tanked and the group had to restructure financially, with Mr Ratner resigning the following year.

Emily Thornberry: The Labour MP resigned from Ed Miliband’s shadow cabinet in 2014 after tweeting a photo of a house in Kent draped in St George’s flags with a white van outside, captioned: ‘Image from Rochester.’ She tried to rebuild her reputation and is now shadow international trade secretary.

• Mike Coupe: The Sainsbury’s boss sang ‘We’re in the Money’ from the musical 42nd Street in 2018 while waiting to be interviewed by ITV to talk about the proposed Asda merger, but later apologised. The deal was blocked the following year, and he is now chairman of Oak Furnitureland.

Philip Green: The retail mogul apologised to the Irish to prevent a customer boycott after claiming in 2003 of the Guardian’s then-financial editor Paul Murphy: ‘He can’t read English. Mind you, he is a f***ing Irishman.’ His Arcadia group went into administration last year amid falling high street sales.

Freddy Shepherd and Douglas Hall: The Newcastle United chairman and vice-chairman called Newcastle women ‘dogs’ and implied fans were paying too much for replica shirts while being recorded in 1998. They both apologised and resigned two weeks later. Shepherd died in 2017.

Bill Clinton: The US president denied his affair with White House intern Monica Lewinsky in 1998, saying: ‘I did not have sexual relations with that woman’. He was later impeached for lying about the matter under oath, but was acquitted at his Senate trial.

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And it quickly descended into acrimony, with presenter Nick Robinson demanding that the PM ‘stop talking’ as he blustered through responses to questions.

A clearly stung Mr Johnson repeatedly referred to the rebuke, asking why he was there if he was not meant to be talking. 

In another wave of interviews this afternoon, Mr Johnson said he is ‘not worried’ about staffing shortages and rising energy prices and dismissed concerns about rising inflation.

He told BBC News in Manchester: ‘We’re moving to a new approach, and I do not want to go back to what I think is a tired old failed approach, which people voted against twice in 2016 and in 2019.

‘Some of the people who would be writing to me, may be worried about this, but I’m not worried about this because, actually, I think it would be good for their businesses to invest in people.’

Asked about inflation having the possibility to eat up wage rises, he said: ‘Actually I think that people have been worried about inflation for a long time and it hasn’t materialised.’

Pressed if he is not worried about inflation, he said: ‘I believe that supply will be encouraged, and we want to encourage people to invest in.’

Mr Johnson told GB News: ‘It’s not the job of government to come in and try and fix every problem in business and industry.

‘We have fantastic supply chains in this country, fantastic logistics, there is a problem of demand.’

He said in the haulage industry has depended on low wage workers migrating to the UK to work under tough conditions.

Mr Johnson said that just 127 of the 300 visas for tanker drivers to come to the UK immediately have been granted.

‘What we said to the road haulage industry was: ‘Fine, give us the names of the drivers that you want to bring in and we will sort out the visas, you’ve got another 5,000 visas’,’ he said.

‘They only produced 127 names so far. What that shows is the global shortage.’

The Department for Transport later clarified that of the 127 visas issued, 27 were for fuel tanker drivers and the remaining 100 were for food hauliers. 

Speaking on BBC Breakfast, the premier said: ‘The supply chain problem is caused very largely by the strength of the economic recovery.

‘What you will see is brilliant logistic experts in our supermarket chains, in our food processing industry, getting to grips with it, finding the staff that they need, we will help them in any way that we can.

‘But the shortage is global.’

He went on: ‘What you can’t do is go back to the old, failed model where you mainline low-wage, low-skilled labour – very often very hard-working, brave, wonderful people – who come in, working in conditions that frankly are pretty tough and we shouldn’t be going back to that.’

That had led to a situation where there was not investment in the industry and ‘people had to urinate in bushes’ because of the lack of facilities for drivers, he said.

Mr Johnson told LBC: ‘I sympathise very much with the frustrations of people who have been queueing for petrol. I really, really do.

‘I understand how infuriating it is when you can’t get petrol at the pumps, but I must repeat that this has overwhelmingly been a problem of demand, not supply.’

He added: ‘What I am getting at is that the tanker drivers, the lorry drivers, they have got more than the average week’s supply to the pumps for the last few days, and that is the situation.’

Go to the office if you don’t want to be ‘gossiped’ about, says PM 

Boris Johnson today warned Britons working from home that they risk being ‘gossiped about’ and missing out on ‘stimulus and competition’ unless they return to the office. 

The PM voiced growing confidence that Covid will not spark further lockdowns as he urged people to get ‘back to work in the normal way’.

He said the government was always ‘humble in the face of nature’ and recognised that ‘a new variant or another pandemic could always hit us’.

But he insisted: ‘The data that I see at the moment is very clear that we are right to stick to Plan A, which is what we are on.’

He said getting back to offices was ‘essential for young people in particular’. 

‘If you are going to learn on the job, you can’t just do it on Zoom,’ he told LBC radio.

‘You have got to be able to come in, you have got to know what everyone else is talking about – otherwise you are going to be gossiped about and you are going to lose out.’   

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He also said: ‘I think even the Petrol Retailers Association have been saying that the situation has been improving markedly.

‘What you are seeing is the UK economy coming back into life, really sort of stretching its legs, starting to move again, and of course there’s been a bit of creaking here and there because we haven’t had such activity in a long time.’

Mr Johnson played down fears over spiralling inflation, saying the tackling underlying productivity problems was the way to ‘fix’ rising prices. 

He said the market would address current demand-led shortages and the shift away from fossil fuels would have a long-term effect on energy bills.

‘This Government is going to fix it for the long-term by making investments in renewable power that we can rely on in this country,’ he said.

Mr Johnson added: ‘This Government is doing the difficult, long-term things. We got Brexit done, which was a very difficult thing to do, and we are now going to address the big, underlying issues that face the UK: long-term lack of productivity, long-term lack of investment in energy and infrastructure.

‘We are going to fix that.

‘That will have a big downward pressure on costs and that is the way to tackle inflation.’

He also defended ending the £20 a week boost to Universal Credit, arguing the taxpayer should not subsidise low wages. 

‘I understand that people feel times are difficult at the moment because we have got an economy that’s coming out of a very tough period with the Covid pandemic and it’s growing strongly now,’ he said.

‘We’ve got the fastest economic growth in the G7.’  

However, Mr Johnson’s relaxed attitude on inflation is not shared by all his top team.

One Cabinet minister told MailOnline the Bank of England is ‘complacent’ on inflation. 

‘They should be unwinding quantitative easing now, before acting on interest rates. They could try reducing it a back and gauge the reaction,’ they said.

‘It might push the pound up, but that is not a bad thing as the pound has been falling and it would help reduce inflation.’

And there is increasing frustration from many sectors about his failure to step in. 

PM refuses to rule out calling early election 

Boris Johnson today refused to rule out an early general election in 2023 as he insisted he is ‘focusing on the job in hand’. 

The Prime Minister said that ‘nobody is thinking about that right now frankly’ and ‘we want to get on with delivering’. 

He repeatedly declined to commit to serving a full term, with the next election currently scheduled to take place in 2024. 

There is growing speculation that Mr Johnson could go to the country earlier than planned. 

The Government is in the process of repealing the Fixed-term Parliaments Act which was rolled out in 2011 and dictates that parliamentary terms last for up to five years. 

The legislation, introduced by the Coalition Government, dictates that following the election in 2019, the next national poll will take place on Thursday May 2, 2024.

The Conservative Party pledged in its most recent manifesto to get rid of the law, arguing that it should be up to the PM when elections are called.     

Currently an election can only be triggered outside of the normal parliamentary cycle if two thirds of MPs vote in favour of one or if the Government loses a vote of no confidence.    

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As well as an estimated shortfall of 100,000 HGV drivers, businesses from meat producers to retailers have warned of empty shelves if the shortages are not addressed.

The Road Haulage Association (RHA) disagreed with Mr Johnson’s comments over the Government asking for names of European lorry drivers they want to work in the UK.

Rod McKenzie, managing director of policy and public affairs at the RHA, said: ‘There isn’t a database of lorry drivers with names attached to them and want to work in Britain that British lorry firms can tap into and say: ‘We’ll have that one, that one, that one or that one’. It doesn’t work like that, it doesn’t exist.’

He added: ‘Why would you give up a well-paid job in Europe to come and drive a truck in Britain for a very short period of time when you have to get a six-month let on a flat and go through all the hassle, initially to be chucked out on Christmas Eve, but now, we’re told, for a bit later?

‘It is not an attractive offer and, effectively, what Europeans have done is kind of vote with their feet on that.’

Rhys Schofield, managing director at Peak Mortgages and Protection in Belper, Derbyshire, said: ‘A lovely bit of buck passing from the government. Whilst the government can’t be expected to solve every problem, it is surely the government’s responsibility to fix the problems that they create.

‘A poorly implemented Brexit and general lack of any coherent plan in anything they do just makes life more difficult than it needs to be.

‘It’s easier to make a video stuffing your face with chips to distract the electorate than actually solve problems of your own making.’

Ali Capper, executive chair of the trade body British Apples and Pears, who also runs a hop and fruit farm, said: 

‘Like all British apple and pear growers, staff are short this year. On our own farm we’re running 10 to 15 per cent short of the numbers we need, but I am speaking to farms that are 30 or 40 per cent short of staff.

‘It’s a combination – Brexit, Covid… but really what we need are sensible policies put in place. We have the seasonal workers scheme for our sector. This year it’s bringing 30,000 workers. There is no doubt that needs to be expanded, probably doubled, and we need the number of permanent operators increased as well.’ 

A spokesperson for the British Meat Processors Association said: ‘The current supply chain issues are systemic and long term, but we have an immediate and worsening short-term labour crisis right now.

‘The problem requires both short and long-term solutions in order to allow industry to adjust to the realities of the post-Brexit labour market, which were only made clear once the Brexit deal was finally signed at the end of January 2020. 

‘Such solutions were presented to the Government in October 2020 by the Migration Advisory Committee, however the Home Secretary, Priti Patel rejected all the recommendations.

‘Contrary to recent claims, we are not asking for a return to free movement, nor are we asking Government to fix the problem for us. 

‘What we are actually calling for is a short-term pragmatic use of the UK’s new-found immigration controls to plug workforce gaps immediately, while we work on the longer-term solution.

‘Industry is already working hard on the longer-term solution with a combination of recruitment and investment in technology. 

‘As an example, one company alone has been investing around £100 million per year for the last five years on new technology and equipment, and this is being replicated across the industry.

‘Regardless of how high wages rise and how many people join the industry now, a new recruit takes eighteen months to become a fully trained butcher. 

‘And we need approximately 12,000 trained butchers right now in October 2021.

‘Government knows that the only practical way to plug the current gap in workers is to bring in fully trained migrant workers while UK workers are being recruited and trained-up. 

‘This is not free movement. It is an Australia-style controlled immigration policy to fix a short-term labour problem.’

Mark Reynolds, chief executive of construction company Mace said: ‘It’s constantly a challenge (to get workers) and it’s not helped through the effects of Brexit and the current fuel situation, getting people to work, is making things more difficult.

‘I think we pay pretty well as a sector – the average salary for a construction professional in the UK is in excess £44,000 a year and in London is excess of £50,000. So I think the industry pays pretty well compared to most and has great opportunities.’ 

Gary Parsons, of HR consultancy Talk Staff, said: ‘Great leaders take the blame and pass on the credit, not point the finger and ignore the support being asked for. 

‘SMEs account for 99.9 per cent of businesses in the UK and with the right support, government leadership and industry interventions they could be the answer to all of Boris Johnson’s problems.’ 

As the Conservative gathering enters its final stages, Home Secretary Priti Patel will today announce plans to hit eco-warriors with a new type of Asbo in an attempt to halt their motorway protests.

Justice Secretary Dominic has unveiled a deal to force criminals in ‘chain gangs’ to clear rubbish from waterways.

Mr Johnson said Insulate Britain protesters are ‘irresponsible crusties’ who have been ‘doing considerable damage to the economy’. 

‘There are some people who call those individuals legitimate protesters,’ he said.

‘They are not. I think they are irresponsible crusties who are basically trying to stop people going about their day’s work and doing considerable damage to the economy.

‘That is why we have taken the powers and why Priti Patel is doing the right thing to bring in powers so they can get six months or an unlimited fine.’ 

Ms Patel has confirmed plans for tougher powers against the likes of Insulate Britain and Extinction Rebellion in her conference speech.

Protesters from Insulate Britain have blocked major roads including the M25 and the M4 in recent weeks.

A court injunction was taken out to prevent their blockade of the M25, but demonstrations have continued, most recently on roads across London on Monday.

Boris brands Insulate Britain protesters ‘irresponsible crusties’ 

Boris Johnson has branded protesters who have blocked major UK roads as ‘irresponsible crusties’.

The PM said Insulate Britain protesters, who have blocked highways across the South East in recent weeks, have been ‘doing considerable damage to the economy’.

His comments come ahead of Home Secretary Priti Patel’s speech to conference, in which she will lay out new measures to deal with demonstrators deemed to be disruptive. 

Mr Johnson told LBC: ‘There are some people who call those individuals legitimate protesters.

‘They are not. I think they are irresponsible crusties who are basically trying to stop people going about their day’s work and doing considerable damage to the economy.

‘That is why we have taken the powers and why Priti Patel is doing the right thing to bring in powers so they can get six months or an unlimited fine.’

The Home Secretary is expected to confirm plans for tougher powers against the likes of Insulate Britain and Extinction Rebellion in her conference speech. 

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A hearing on the original injunction, granted to National Highways on September 22, will take place at the High Court in central London later on Tuesday.

Ms Patel announced an increase in the maximum penalties for disrupting a motorway, while also criminalising interference with major roads, railways and the press.

The Home Office will also give the police and courts new powers to deal with the ‘small minority of offenders’ who are ‘intent’ on travelling around the country with the aim of ‘causing disruption and misery across our communities’.

Ms Patel has unveiled a £15million expansion in testing suspects for drugs on arrest, and is expected to say that ‘unconscionable crimes and acts of violence against women and girls have no place in our society’.

Mr Johnson is expected to use his Tory conference speech tomorrow to encourage a return to the workplace.

‘He believes very strongly in the value of face-to-face working,’ a senior source told the Daily Mail. ‘It is critical for the training and development of young people. How can you learn a new job on Zoom?’ 

Mr Johnson launched an ill-fated attempt to get office staff back to their desks last year, which was wrecked by the emergence of the second wave of Covid.

Scientific advisers have pressed him not to repeat the exercise this year because working from home is one of the most effective ways of slowing the spread of the virus.

Instead the Government left it up to employers to encourage a ‘gradual return to the workplace’.

But a second Tory source said ministers were now hopeful they would not have to issue another work from home order this winter.

‘You can never rule anything out with Covid,’ the source said. ‘But we are now in early October and hospitalisations are still running at manageable levels.

‘We are not at the point of anyone thinking about Plan B.

‘Even if we get to that point, it would start with things that cause relatively little disruption, such as mandatory masks and Covid certification.’ 

Mr Johnson climbed on a digger as he carried out his whistlestop tour of the conference stands this morning

Mr Johnson climbed on a digger as he carried out his whistlestop tour of the conference stands this morning

Mr Johnson climbed on a digger as he carried out his whistlestop tour of the conference stands this morning

Dominic Raab has unveiled an initiative to double the number of offenders forced to wear electronic tags

Dominic Raab has unveiled an initiative to double the number of offenders forced to wear electronic tags

Dominic Raab has unveiled an initiative to double the number of offenders forced to wear electronic tags 

What are the higher costs coming down the track for Britons over the coming years? 

National insurance rise – from April 

The rates of national insurance are due to be pushed up by 1.25 percentage points from April, in a move that will cost households hundreds of pounds. 

The move will raise £12billion a year, which will initially go on bailing out the NHS and clearing backlogs after the pandemic. However, in the longer term it is meant to be used for social care.

Boris Johnson has promised that no-one will pay more than £86,000 towards their care costs. However, that does not include accommodation and some other costs, with fears of a ‘postcode lottery’ as local authorities set different rules.  

Initially the hike will look like a NI rise on pay slips, but later it will be billed a ‘health and social care levy’. 

Ministers insist it is fairer than other tax options because it falls on business as well as individuals.

To raise the equivalent amount in income tax would require an increase in individuals’ tax of 2 percentage points.

A typical basic rate taxpayer earning £24,100 will contribute £180 in extra NI in 2022/23.

A higher rate taxpayer earning £67,100 will contribute £715. For the first time, the NI will be charged on people working over the state pension age of 66.

Universal credit – £20 uplift ends 6 October 

The Government introduced a temporary £20 increase to universal credit payments in response to the pandemic in April last year, but the scheme is set to officially end on 6 October. 

Close to six million people currently claim universal credit, almost double the three million before the pandemic, with almost 40 per cent of them classed as being in employment. 

Thanks to the boost, a single person aged 25 or over has gone from earning £317.82 to £409.89 a month, a difference of £23 a week or £1,104.84 a year.

In that case, the £23 a week boost made up more than a fifth of the amount they were paid. 

Citizens Advice has warned that a third of people on universal credit will end up in debt when the uplift is removed, with the average shortfall set to be of around £50 a month. 

Research by another charity, Turn2us, has found that over half of people on universal credit will struggle to pay their bills when the cut comes into effect, with a further one in four unable to afford their rent or mortgage payments. 

‘Due to the way Universal Credit is tapered as earnings increase, it’s not just a case of people picking up an extra couple of hours of work to help fill the gap, instead they will likely have to make tough decisions about what to pay for and what to cut from the household costs,’ notes Laura Suter, head of personal finance at AJ Bell.

‘Anyone who will be hit by the cut should check they’re getting all the benefits they’re entitled too – Citizens Advice is a good first port of call for help navigating the system.’   

Thomas Lawson, chief executive at Turn2us, said: ‘The £20 per week cut to Universal Credit was already going to leave many families struggling to keep up with the cost of living. 

‘This, now combined with a sudden surge in energy prices, could spell disaster and plunge thousands more people into financial insecurity or even poverty; especially those of us whose financial resilience has been worn away by the pandemic.’

Green revolution – coming years 

Homeowners are set to be hit with a new environmental tax on gas as ministers try to force them to abandon the fuel in favour of green alternatives.

Climate change levies currently added to domestic electricity, which average £159 per year, are expected to be axed and new payments added to gas to entice people to replace their central heating boilers and cookers.

The move is intended to encourage the take up of heat pumps and other electric alternatives as they seek to make the UK net zero for carbon emissions by 2050.

Ministers insist the change will mean no overall increase to bills and could help increase the take-up of electric cars as it become cheaper to charge them at home.

However critics doubt that will be the case, and the change comes at a time when UK gas prices have hit a record high.

Mr Johnson has also pledged to make all the UK’s electricity supplies ‘green’ by 2030, although again the government argues this will cut prices for households rather than increase them. 

Stamp duty holiday – already over

The full stamp duty holiday came to an end in June, with the nil-rate band – the portion of a property purchase buyers don’t need to pay stamp duty on – reduced from £500,000 to £250,000.

The tax break, which saved buyers up to £15,000 on their house purchases up until then, was cut back, with the maximum saving currently capped at £2,500. 

But from the 1 October, that went too, as the nil-rate band will revert to the normal £125,000.

Stamp duty has been blamed for pushing house prices higher over the past year, with many experts anticipating a drop in demand, and hence prices, after its end. 

And demand did indeed fall off a cliff between June and July, with the number of property transactions plummeting by 63 per cent, according to official figures from HMRC. 

But many believe prices will hold up well in the coming months thanks to cheap mortgages and demand continuing to be driven by people looking to relocate to larger homes in the countryside in the wake of the pandemic.

‘While there is likely to be a surge of property purchases pushed through before the deadline and a small drop in the month after, the early signs are that the property market isn’t headed for a large crash – particularly while borrowing is still so extraordinarily cheap,’ Suter said.

VAT reduction – already over  

The reduced VAT rate on food and soft drinks for hospitality businesses was introduced during the pandemic to help out struggling pubs and restaurants, and has been extended a couple of times. 

However, it will now come to a close at the end of the month – and could see businesses hike prices to customers.

On 30 September 2021 the current 5 per cent reduced rate will rise to 12.5 per cent, which will last until 31 March 2022, when it will rise back to the old standard rate of 20 per cent.   

‘Many hotels and restaurants decided to keep this reduction for themselves rather than pass it on to customers, to help shore up their finances post-pandemic,’ said Suter.

‘With food and energy costs rising it has provided a cushion for businesses and may have helped them put off increasing prices. 

‘But once the rate shoots back up it will be another squeeze on margins for businesses and means we’ll probably see higher prices when going out to eat or booking a trip away.’

Energy price cap – from October 1

On top of seeing much of Government support scrapped, many families and businesses are also facing rising energy bills thanks to the energy price cap.  

Some 11 million households on their suppliers’ default energy tariffs will see an increase of £139 a year to £1,277, while bills will also increase by £153 to £1,309 a year for 4 million pre-payment meter customers.  

The increased bills will start from 1 October and last for the following six months until the cap is reviewed again.

‘Usually you’d be far better off getting off your provider’s standard variable tariff and locking in a fixed-rate deal, but the energy market is so barmy at the moment that no one is offering a fixed deal for a cheaper price than the energy cap,’ Suter says.

‘This means everyone needs to face up to rising energy bills, just as we head into the colder months.

‘If your deal has ended you need to weigh up whether you want to secure a fixed-rate deal now, at a higher cost than your current price, with the expectation that you’ll be protected from rising energy prices. 

‘Or you can stick with the energy price cap rate and gamble that recent gas price rises end soon.’

Households struggling to pay their bills can also contact their supplier or ask for help from a debt advice charity.   

Rising inflation and food costs

Inflation fears were fuelled again this month, when the headline CPI rate recorded its largest jump ever in August to 3.2 per cent – with the Bank of England predicting it could soar above 4 per cent by the end of the year. 

Contributing to the rise was a jump in the price of food and drinks, partly as a result of the supply chain crisis gripping the country.

Food and non-alcoholic drink prices rose 1.1 per cent between July and August, and by 0.3 per cent over the year, according to the latest figures by the Office for National Statistics. 

The average price of a pint in the pub across the country could soon pass £4, the ONS said. 

Last year, the average household spent £277 a month on food expenses, but the latest inflation reading suggest this could increase to £285 a month this year, according to analysis by Royal London. 

‘Anyone who has been to the supermarket recently will have noticed that their weekly bill has been rising,’ said Suter. 

‘A combination of shipping issues, driver shortages, supply chain issues and a leap in demand have all lead to a spike in prices – in July we saw the largest monthly rise in food costs. 

‘While you can’t directly combat rising prices, you can reduce your food bill. There are lots of offers out there for using online grocery delivery services for the first time, which can get decent discounts on a shop. 

‘Or you can go back to the old fashioned methods of sticking to your list, meal planning and budgeting.’

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