How Europe is protecting the poor from the cost of living crisis
In order to combat the soaring cost of living, Germany has introduced a cap on travel costs.
From innovative policies to encourage low energy consumption to encouraging citizens to use public transport, many European countries have acted more decisively than the UK to help people get through the cost of living crisis.
In Germany, a three-month initiative which started June 1 means people can travel across the country for just €9 (£7.50) a month.
All local and regional transport on buses, trains and the metro are included in the government initiative, except for city center trains.
German Transport Minister Volker Wissing described the €9 per month tickets as a great opportunity and a success. “It’s a success that we have already sold seven million tickets,” he said.
The program is also designed to discourage people from using their cars.
However, the fuel tax was reduced by around 30 cents per liter for petrol, bringing prices down to less than €2 per litre.
Diesel prices have also been reduced to the EU minimum for the next three months, meaning a liter of diesel has been reduced by around 14 cents.
Among other measures imposed by the German government to help mitigate soaring living costs, people at work are receiving a one-time €300 discount to help with energy costs in the fall.
In July, family allowance recipients will receive a bonus of €100. Recipients of social assistance will also receive €100.
France caps energy prices at 4%
After announcing a one-off payment of €100 (£84) in 2021 to 5.8 million households receiving energy vouchers, the French government has forced the public energy supplier to cap wholesale prices for a year.
In September 2021, a “tariff shield” – shield against tariff increases – was introduced, which meant that electricity tariffs were capped at a 4% increase, instead of 44.5%, and regulated gas prices were frozen instead of increasing by 60%.
According to Brussels think tank Bruegel, France is set to spend around 38bn euros (£32bn) to help people through the cost of living crisis.
France has also been experimenting with free public transport since 2018, and in March Paris reduced the cost of train tickets.
Many European countries have also set up systems to support home insulation. For example, in March Ireland adopted a grant policy that provides up to 50% of the costs of a deep renovation.
Meanwhile, the UK is accused of having far from the same ambition. In June, the E.on boss pleaded with the government for more insulation and retrofitting of homes, saying Britain badly needed to step up its energy efficiency drive.
The Spanish “anti-crisis plan”
In March, the Spanish government announced a series of initiatives to deal with the rising cost of living. At the time, President Sanchez said the measures were “intended to help the most vulnerable families and sectors” and would last until at least June 31.
Now the Spanish government is negotiating measures that could be part of the new extension of the country’s “anti-crisis plan”.
Initiatives could include further reductions in fuel prices, which are currently €0.20 per litre, and the introduction of a €300 benefit, to help families at risk.
The Netherlands reduces VAT on energy bills
As the use of food banks in the country’s largest cities has risen sharply, the Dutch government has announced several billion euros to help poorer households cope with the rising cost of living.
Measures include increasing the energy benefit from €200 to €800 and reducing VAT on energy bills from 21% to 9%.
The reduction in VAT should save all households around €140 over six months.
How much European countries are spending to reduce their energy bills
A BBC analysis looked at how much European countries were spending to help households pay their energy bills.
It found Italy to be the highest, providing 2% support as a percentage of GDP to help pay energy bills. Next come Spain at 1.7%, followed by France, which is spending 1.5% of its GDP to deal with soaring energy bills.
Germany and the UK both spend 0.8% and the Netherlands 0.7%, according to BBC research.
UK criticized for not going far enough
The UK government has announced several support programs to help people through the current financial crisis, including two cost-of-living payments to households receiving social benefits. He has, however, been accused of acting indecisively and criticized for not going far enough, especially to support low-income families.
Rishi Sunak’s spring declaration has been heavily criticized for providing almost no targeted support for low incomes.
While France capped energy prices at 4%, millions of British households saw their gas and electricity bills jump by more than 50% in April after energy regulator Ofgem announced a record increase in its price cap.
In May, the Chancellor announced new policies to tackle energy costs and provide relief to those for whom “the fight is too tough and the risks are too great” amid the cost of living crisis. The support includes a “temporary targeted profit tax” to tax the windfall profits of energy companies, while encouraging investment. The package also plans to provide 8 million low-income households with one-off increases in social benefits in 2022.
The measures have received a mixed response, with charities and anti-poverty groups saying they are providing temporary relief to millions of households but leaving those on the lowest incomes facing uncertainty.
Sunak rejected calls for permanent benefit increases to deal with rising prices.
Household Support Fund
A key part of supporting low-income families has been the £500m Household Support Fund (HSF). The fund was introduced last fall to help poorer families with essentials. In response to accusations that the government is not doing enough to help people cope with soaring inflation, ministers cited the HSF.
However, in May the Observer revealed that funding had not been available in parts of the country for months after councils ran out of money.
Dame Clare Moriarty, Chief Executive of Citizens Advice, said: “Since the start of the year, we have seen record levels of demand for crisis support amid a squeezing cost of living. Government assistance is far from sufficient to target low-income households who need it most.
“It is concerning that this limited aid has forced some councils to shut down their systems early. With only the same amount of money coming in again in April and cost of living pressures still rising, that won’t be enough for those struggling.
The Tories have been caught up in a fresh row over the cost of living when a senior Tory minister suggested some people should get better paying jobs or work longer hours to keep up with skyrocketing bills.
Minister Rachel Maclean provoked a backlash when she said it could be a ‘long-term’ plan to ‘make sure people are able to better protect themselves’ amid the cost crisis of life.
Responding to the comments, Lib Dem Wendy Chamberlain said: ‘So the Tory response to the cost of living emergency is people should just earn more? It shows how disconnected they really are.
Meanwhile, as Germany offers travel tickets at €9 a month, people have been quick to share their annoyance at the cost of public transport in Britain, where train fares have risen by a fifth in real terms since privatization.
Summing up the disparity, one Twitter user said: “My boss lives in Germany. 9 euros per week, travel throughout Germany. He priced London to Leicester last week and when it was over £100 he simply refused to go.
“It’s a joke.”
Gabrielle Pickard-Whitehead is editor of Left Foot Forward
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