Gordon Brown demands emergency budget before ‘financial timebomb’

A report commissioned by Mr Brown suggested Government help has not addressed households’ needs.

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Former prime minister Gordon Brown has demanded the Government come up with an emergency budget before a “financial timebomb” in October “pushes millions over the edge”.

A new report commissioned by Mr Brown suggested Government help has not addressed households’ needs, he said the Prime Minister, Rishi Sunak and Liz Truss must agree to emergency measures “this week”.

He said: “A financial timebomb will explode for families in October as a second round of fuel price rises in six months sends shockwaves through every household and pushes millions over the edge.

“A few months ago, Jonathan Bradshaw and Antonia Keung at York University estimated that April’s 54% increase in fuel prices would trap 27 million people in 10m households in fuel poverty.

“Now, 35 million people in 13m households – an unprecedented 49.6% of the population of the United Kingdom – are under threat of fuel poverty in October.” He said, writing in The Observer.

Mr Brown said if an agreement was not drawn up by Mr Johnson, Mr Sunak and Ms Truss then “parliament should be recalled to force them to do so”.

Former prime minister Gordon Brown.
Former prime minister Gordon Brown.

The Labour former chancellor suggested the country had reached a dangerous point, telling BBC Radio 4’s World At One programme: “I feel that we’re at a moment when a lot of the gains of the last 30 or 40 years have been lost, when people are being forced into dire poverty in a way that I did not expect would ever happen again in my lifetime”.

He lamented the “vacuum” created by the Prime Minister and Chancellor being on holiday and the Tory leadership candidates being on the campaign trail.

“At the centre of Government, not enough thinking is being done about the major social crisis, the biggest issue that we’re facing in the next few weeks.”

The new report, carried out by Professor Donald Hirsch at Loughborough University, found support for low-income households has fallen short of offsetting the losses they face amid the cost-of-living crisis, with some families up to £1,600 worse off a year.

The additional £1,200 offered to the poorest in society this year will fail to compensate for three major blows to their income from October 2021 to October 2022, the analysis suggests.

The loss of the £20-a-week benefits uplift, an annual uprating out of line with inflation forecasts, and a jump in the energy cap will mean the worst-off families cannot bridge the gap.

This is because the flat-rate payments offered by the Government fail to take into account the different sizes and needs of different households, it says.

A Government spokesperson said: “We understand that people are struggling with rising prices, which is why we have acted to protect the eight million most vulnerable British families through at least £1,200 of direct payments this year, with additional support for pensioners and those claiming disability benefits.

“Through our £37 billion support package we are also saving the typical employee over £330 a year through a tax cut in July, allowing people on Universal Credit to keep £1,000 more of what they earn and cutting fuel duty by 5p, saving a typical family £100.”