Jeff Prestridge  

Govt must take urgent and decisive action on cost of living crisis

Jeff Prestridge

Jeff Prestridge

We are living in extremely dangerous times, both economically and geopolitically.

From a global perspective it is more worrying than any moment in my lifetime, with the possible exception of the Cuban missile crisis in 1962 – at the time I was barely out of my pram, so thank goodness I had no idea how close the world was to a nuclear war. 

Today, we face threats from a Russia led by someone who seemingly will stop at nothing to get his way in Ukraine – and maybe beyond.

And out east, we have a China that is intent on commanding the South China Sea, as well as pursuing an expansionist policy in the Pacific, edging ever closer to Australia’s front door. At some stage, it will also do what it has long promised, which is take back Taiwan. God forbid what will happen then.

Economically, the outlook is not as grim because employment is holding up well. Wandering the streets of my home town Wokingham (Berkshire) at the weekend, I was pleasantly surprised at how busy the local restaurants were. Some were chock-a-block with diners.

Yet Wokingham is not a typical British town – its local economy remains rather vibrant. 

I fear that grimness will intensify in the weeks and months ahead as energy bills ratchet up again and inflation heads for 10 per cent and beyond. Fuel poverty will explode. Come autumn, some 40 per cent of households could be facing fuel poverty. Perish the thought. 

With some of the country’s biggest unions (scandalously) threatening to bring the country to its knees in the coming weeks, we could well return to the awful days of 1973 when the country was plunged into a three-day working week as electricity supplies were threatened. I remember going into secondary school at the time and feeling how an ice lolly must do sitting in a freezer (bloody cold).

We could even face food shortages if Russia continues to block exports of Ukrainian grain.

So, what should the government do? Some Conservative politicians have suggested that we should all grin and bear it until inflation starts falling. But I do not believe that would be a wise strategy at all.

It would simply reinforce many people’s opinion (and rightly so) that the government is horribly out of touch with the electorate. I am sure the government would not be forgiven at the ballot box – although there is a lot more besides that will not be forgotten. 

A windfall tax on energy producers seems to be gaining traction (the Treasury has said nothing is now off the table when it comes to addressing the cost of living crisis). Such a form of tax was employed by Margaret Thatcher against the banks, so if she did it, Boris Johnson could get away with it.