Today’s the day.
We found out earlier that it’s now ‘Time for Truss’ – after Liz Truss was named the next UK Prime Minister.
But there are a few key issues she needs to tackle when comes to helping us manage our (rapidly running out) money.
There are three main issues dominating her in-tray.
Top of the agenda is deciding how to stop a total disaster this winter when energy bills rise to more than £3,500 a year on average. Worse is set to come in January and April when bills are predicted to scale £6,000 for a typical household.
So, what are the options? Here’s what I think the government should be considering:
- Give emergency energy credits to anyone with a household income of £30,000 or less. Businesses should be able to apply for credits, too. The government should foot the bill for the price cap rise from October 1, but only for those who need it.
- Axe the green levy. Controversial, I know. This is the tax we all pay on our energy bills, which goes towards paying for new wind farms, solar power, nuclear power stations and other eco-friendly energy sources.
- Yes, we have to invest urgently in ways to create our own energy in the UK; yes, renewables are part of the answer. No, now is not the time to ask taxpayers to pay the bill for something that won’t help for another two decades.
- Issue energy savings bonds and allow pension funds, businesses, individuals and all institutional funders to invest in them. Ten years at 10% interest. Yup, it’s expensive but it’ll raise lots of cash fast – and savers and pensioners are desperate for somewhere decent to put their money. The money raised can be used to pay for:
- Building efficiency grants for individuals and businesses to pay for things like solar panels, insulation, triple glazing, etc
- Community grants to build small and local wind, solar, biofuel or other clean energy production and storage.
- Making the grid better, so we don’t waste so much energy.
2. Personal Taxes
Liz Truss says that she’ll cancel Rishi Sunak’s National Insurance hike so that people have ‘more money in their pockets’. Problem is, undoing the NI rise might make a bit of a difference for some people, but not enough.
It does nothing to help anyone on benefits or in low-paid jobs. It probably does help businesses who would save on employment costs. They might even afford staff pay rises.
We still have to worry about all the teachers, port workers, train drivers and support staff, criminal barristers, Royal Mail workers and staff at BT striking over jobs and wages. Broadly, they want to earn more to pay for the rising cost of living. We all need more pay because inflation is heading for 13%.
Stuff that cost a pound this time last year will cost £1.13 by October. If City analysts are right, that will be £1.18 by the new year. It means someone earning £30,000 last year needs their pay to rise to £35,400 by January to afford the same lifestyle.