This year, for the British, the start of April has meant a significant increase in taxes, as well as sharp rises in the cost of utility, internet and phone bills. In most parts of England, from April council tax is rising by 5%, in Wales by 5.5% and in Scotland by 3%. Water bills are rising by 7.5% on average, which is an increase of about £31. In some areas, bills are rising by £47 a year. The largest internet and phone operators are also announcing price increases for their services of 14-17%. What’s more, Jeremy Hunt, the finance minister, (known as the Chancellor), is warning that the half-year-long government programme to help with the payment of gas and electricity bills is coming to an end. (This £400 subsidy was paid to suppliers in instalments over six months). At the same time, the size of benefits for those on low incomes is increasing by 10% on average, as is the minimum wage. The most vulnerable members of society will receive a total of £900 of extra financial support in three tranches to be paid over the year, while the disabled will also receive an extra £150.
Kommersant Uk has talked to several British residents from different income brackets and social circumstances about what the measures in the government’s spring budget mean for them and what changes they expect to see in their lives in the new financial year. Most respondents chose to remain anonymous, so their names have been changed.
Leonard, owner of a landscape design company:
I always wait for the announcement of next year’s budget because it’s a big event that everyone discusses. But, as a rule, my business and family are not heavily affected by government programmes. The last budget was an exception; it was the largest change affecting me directly that I can remember; the base rate of corporation tax for a company earning more than £250,000 a year was increased by 6%. This is an awful lot and it will cost us thousands of pounds. Now we’ll have to work even harder to bring in more revenue. I have already raised prices due to inflation, but I can’t charge any more for our services, so I’ll just have to pay more taxes and make less money. We’ll have to accept the inevitable and wait for a new chancellor to come and cancel these measures. I’d vote for any politician who’d cancel this decision. I believe that small businesses such as mine are always being used to raise more money for the budget and we’re paying a fortune.
But there is some good news too. Brexit has allowed the government to freeze a rise in alcohol duty in pubs; while we were in the EU that would have been impossible. So at least we’ll be able to drink a few beers with friends at the same prices. It also helps that the government has prolonged the freeze on fuel duty.
As for gas and electricity prices, people will turn the heating on less in the summer months; I hope prices will either go down in the autumn or that the government will reinstate its financial support.
The ones who need the most help right now are the most vulnerable families. People who are doing alright for themselves will cope without any support.
Roy, pensioner and former bus driver:
An enormous problem for people of my age, in fact, of all ages, is the way prices have been shooting up lately. Of course, we should all say ‘thank you’ to Mr Putin for that. People who have either retired, are on the minimum wage, or are on benefits are suffering the most. The government is subsidising electricity payments, but, as I see it, this is only encouraging energy companies to rip people off even more. The money is just flowing from one pocket to another, and we don’t see it. I’m also very concerned about the cost of groceries. I’m afraid that the growth in prices will be a huge problem this year.
It’s good that they’re putting the pension up this year, but what does that mean in comparison to the surging cost of everything? The problem is that pensioners live on a fixed sum; the size of their pension. Look around and you’ll see that in any supermarket there are workers who are 70 or 80. They need to work to make ends meet. Last year I got a job so that I’d have some extra income.
In the past, for the average person, the budget was about the tax on spirits and cigarettes, but now, each year, the government is introducing more and more new taxes. For example, I was quite outraged when they introduced a tax on insurance (the IPT). It just keeps on going up and up. Another tax which I also think has no right to exist is the 5% tax on home heating. And there are so many hidden taxes that you’d never even guess exist!
I have lived a long life and I have seen different crises, but I consider bureaucracy to be the country’s biggest problem. Of course, the state pays all those on low incomes compensation to help them at least a little during the crisis. But clearly, the requirements of people in the same income bracket can be very different; some people don’t really need this help at all, while for others, the money they receive falls far short of what is necessary for a decent life.
Katerina, on disability benefit (PIP):
If I understand things right, the government is cancelling work capability assessment (the Department of Work and Pensions’s appraisal of whether the benefit recipient is fit for work) in favour of a PIP-style assessment, which means they will assess people’s ability to work using the criteria for the Personal Independent Payment (PIP). This will be a disaster for those unable to work. The PIP criteria are much stricter as they do not take into account many aspects of personal circumstances. The question ‘Can you work?’ is not asked at all, only the question ‘Can you look after yourself?’. Yet, for various reasons, from debilitating anxiety to weakened immunity, many people who can’t work can look after themselves. For instance, I have heightened lethargy, my ‘batteries’ sometimes switch off in the middle of the day, and I could pass out in the street. So how can I work? I could work freelance, but only when I have enough energy. I have even written to Martin Lewis (a financial journalist and the founder of the site MoneySavignExpert.com) and asked him to speak up for us. What does “encouraging the disabled to work” mean? Some people are at risk of taking their own lives if, on the threat of destitution, they are pushed and bullied into going out to do any old form of work. What’s more, if I went to work and started to earn well, I would stop receiving benefits. What would happen later if my circumstances worsened, would I be able to apply for benefits again? That’s a big question. It sometimes seems better not to do anything at all, rather than risk losing your benefits. I’m not the only person to think like this.
By the way, the criteria for PIP are reviewed much more often than for work capability assessment, so the government's argument that there will be fewer reports and commissions is balderdash. They just want to check everyone again. People will be going green with anxiety.
We don’t receive any benefits, because my husband is still working and he receives a pension. We pay the usual taxes. They have raised the pension a little this April, but I wouldn’t say that it changes anything since council tax, for instance, has gone up too, in our case, it’s up 5.1% compared to last year. So it works out that they’re helping us with one hand and quietly taking things away with the other. We paid £600 or so for gas and electricity in this quarter; compared to last year, our bill for this winter has precisely doubled. This is despite the £500 we received at the start of the heating season, instead of the usual £200. We got more because there are pensioners in the family. It’s a good thing that we’ve already paid off our mortgage because it means we’re not suffering from the rise in interest rates, the only positive note is that we don’t have to worry about that. Of course, it’s hard for those who are young, with kids and a mortgage.
Evgenia, accountant and mother of a one-year-old:
My partner and I have listened to what the Chancellor had to say about his economic plans, and we’re very pleased that the government is going to reform the childcare system and intends to help young parents to get back to work. We have a one-year-old, and both of us work full-time. Currently, we can only rely on help from our parents, who look after our son so that we can work. We would like to give our parents a break; they’re getting old and it's hard for them. But there’s no other way out. For example, my friends have sent their two-year-old son to a nursery. For two full days in this creche, they pay more than £800 a month. For us, that’s an enormous amount. The promised free hours in a nursery would help us financially, but principally, they’ll take the burden off our parents. I’m just afraid that we’ll probably have to wait a long time for help from the state; a year and a half or more.
We asked Tatiana Henderson-Stewart, owner of Little Cherry (Vishenka) Nursery, her view on how realistic the government plans are to provide 15 free hours of care in a nursery to children from the age of two. Subsequently, this is planned to be extended to children from the age of nine months. Also, we asked her for her thoughts on how much parents can rely on the promise of 30 hours of childcare for children from the age of nine months to five years, which is planned for September 2025.
Here is Tatiana’s reply:
I can’t say that it’s a realistic plan. For instance, as a private nursery, we can’t afford to do it. The whole situation is more complicated than it seems at first glance. When the current programme appeared, which provides from 15 to 30 free hours of childcare in nurseries for each child, many private nurseries refused to take part in it. Or rather, they agreed at first, but then they realised that it wasn’t profitable. The state pays £6 an hour, while a good private nursery charges at least £9-£11 an hour, because in a private nursery, we do more cleaning, buy every conceivable material and hire dancing and music teachers as well as a sports coach. The state is very strict about ensuring that each child receives the number of hours due to them. If they are due 15 free hours, that’s how long they should spend in the nursery. This is why private nurseries ask parents for a supplement and the government allows this. But all the same, the child should physically be in the nursery for the specified number of hours.
The state pays even less for two-year-olds, but more staff are required to look after them. For children at nine months, the ratio of carers to children is one to two. But actually, there should always be another member of staff to hand, as, if a carer needs to go away to change a child’s nappy, somebody else has to stay to look after the other children. This means we need an awful lot of staff. For a nursery, employing so many people is too expensive. That’s why we only have three state-funded places for two-year-olds. They come for the specified number of hours.
Our staffing expenses are not limited to wages. We’re constantly investing in raising qualifications and recognising certificates. Currently, there is a great shortage of professionals in the preschool education industry, as young people aren’t coming to work in nurseries. Instead, older ladies come who find everything more difficult. It’s a catastrophe for the whole industry; it’s hard work and the pay is low.
Patrick, a university student in Manchester:
I’m lucky; my parents help me pay my rent (I pay £600 for a room in a house which I rent with friends). On top of that, my parents give me £400 for expenses, and I receive another £400 from the state as a maintenance loan. Also, I have a loan to cover my tuition fees, which are roughly £9,000 a year. I can’t work as I have a lot of studying to do, so I’m very grateful to my parents for their help. But I have friends whose parents can’t help them. They take out loans of £25,000 to £27,000 a year, which works out at £9,000 in tuition fees, £6,000 on renting a flat and £9,000 on living expenses. It’s very hard, and food at universities is getting more and more expensive. In the shop, we choose things that are cheaper or on special offer and we cook at home. Beans on toast, for instance, is a very economical meal.
