One of Britain’s leading retailers has called for a major boost to wealth for the poorest as pressure mounts on Chancellor Rishi Sunak to tackle the cost of living crisis.
Stuart Rose, the chairman of Asda and Conservative colleague, effectively supported the reinstatement of a £20 a week increase in universal credit introduced at the start of the Covid pandemic to help people on low incomes. He said some saw “shocking” increases in their bills and warned the pressure would likely continue through 2024.
“We have a national economic emergency and we all need to work together to solve it,” he told the… Observer† “Doing nothing is not an option. We must act and act quickly. Even if things improve next year, prices will still rise if inflation falls. The people we should be concerned about are people with lower incomes. They are really having a hard time.”
Rose is the latest senior businesswoman and conservative to push for immediate action. Last week, Tesco chairman John Allan called for support, saying there was now an “overwhelming case” for a windfall tax on energy companies to help those most affected by the cost of living crisis. Rose said he was “nervous about a windfall” and believed direct, targeted aid to the low-paid was a better approach.
“I think it has to be done through wellness — it has to be carefully targeted,” he said. “It has to be an intervention that will make a significant difference to people. I don’t know how people with lower wages and a few children are going to make it this year. If you have a disease, give medicine until you are cured and then take it away. You just have to explain it well. People will understand. I would have a very, very targeted intervention that makes a meaningful difference to people – the equivalent of £1,000 a year.
“It’s shocking. This has been going on for months if not longer. It’s shocking that we only just seemed to see this coming.
“The second thing to say is that this will not be temporary. This will have a lasting effect on the economy up to and including 2024 and therefore also on consumers. That is a big problem.”
His intervention comes after Sunak said an old computer system of the Ministry of Work and Pensions (DWP) prevented him from raising more benefits in the spring statement. He admitted that citing technical issues “sounds like an excuse”, but had been told that for people on certain benefits, there could only be a raise once a year.
Several Tories are pushing for action. Boris Johnson has declined to rule out the introduction of a windfall tax, while Sunak has suggested it could be an option if energy companies do not invest in the UK. However, many MPs want tax cuts brought forward or aided through the benefit system. The government has increased benefits by 3% when inflation is at 7% and is expected to hit 10% by the end of the year.
Rose, a figurehead in the Remain campaign ahead of the EU referendum, lamented the fact that he felt “you shouldn’t” cite the impact of Brexit on the cost of living crisis. “It is the biggest economic disaster to hit this country and will have a lasting negative effect for the foreseeable future.
“It’s been conveniently camouflaged and ignored because of Covid. It was the best excuse the government ever had to cover up all the bad effects of Brexit. The costs of transportation, insurance, freight, administration and labor have increased. It has caused the problem we have with Northern Ireland. Trade with Europe has fallen by a greater amount than any new trade we got from foreign trips, where people rushed around the world and said, ‘We have another trade deal.’ We can’t turn it back, but my god, at some point someone has to be honest and have a good balance sheet. No one wants to be seen as a ‘Remoaner’, but it’s actually shocking. If it wasn’t so shocking, it would be comical.”
He said he believed that in the next generation there would arise a politician who would be willing to stand up again for a closer relationship with Europe: “There is a young man or woman, probably already around, who is about Will stand on an orange box for 10 or 15 years’ time, saying, ‘I have this vision.’ I think we’ll be back in Europe by the mid-2030s – kind of a different structure, but closer to the Europeans in some way of trading. That’s my prediction.”