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With inflation tightening the screws on every sector of British life, the new prime minister Liz Truss faces the prospect of nationwide civil unrest

While rising inflation is putting pressure on many parts of the world, in the UK its effects are weakening the nation's socio-economic fabric and undermining the government. A nation that was essentially leaderless over the summer until the recent confirmation of Liz Truss as prime minister, and which has now lost its totemic queen, seems to be facing a perfect storm of fiscal woes. Chief among them are the worryingly unrestrained hikes in the cost of petrol, food and energy; fuelled by the pandemic and Ukraine war, inflation is at a 40-year high of 10% and rising. 


Further battering the morale of the UK has been a series of debilitating national rail strikes, forcing employees who had just about got over lockdown to go back to working from home. Other public sector workers – teachers, doctors, nurses and even criminal law barristers – have also threatened strikes, due to stagnant wagesand the erosion of public welfare. With no end in sight, many older British people recall the dim, dark days of the 1970s when protesters took to the streets amid ongoing industrial action. The then Labour government was toppled and did not return to power for nearly 20 years – a warning for a struggling Conservative administration that may have to deal in winter with serious civil unrest.  

Food


While the rest of Europe reels from the effects of inflation, the UK has the unenviable distinction of potentially having the highest inflation in the developed world later this year, with an annual rate of 13.3 % forecast in October when the energy price cap rises. Another rise is predicted in January, too, when inflation could top 18%. In the UK, July’s startling statistics saw numbers affected by a sharp increase in the cost of food due to the war in Ukraine, rising fuel prices and a shortage of truck drivers and agricultural workers. Food is second only to transport in the country for driving inflation.

The percentage of people spending over £100 ($118) per week on food shopping has doubled since 2018. According to a YouGov poll, one in six people are regularly skipping meals to save money (worst affected are 18-24 year-olds), and 50% of people have cut back on dining out in cafes and restaurants, with others putting food back on the shelf in supermarkets to curb costs. Interestingly, the majority of those forced to do the latter are non-Tory voters. Forty-one per cent of 2019 Lib Dem voters admitted to it, 50% of all Labour supporters, and just 29% of Conservatives. It reinforces the sense of increasing disgruntlement with the Conservative party as being out of touch with the common man/woman.

Transport fuel


The unprecedented sight of snail-paced motorists purposefully holding up the traffic flow on the UK's motorways became a reality in July as hundreds of vehicles of all types created rolling blockades to protest exorbitant fuel prices which reached 191.53p for petrol and 199.07p for diesel in July, up 9.45% in a year. This has been due to the cost of crude oil increasing, with suppliers struggling to keep up with demand and the drop in the value of the pound compared to the US dollar. 

The protests were organised on social media under the banner Fuel Price Stand Against Tax, and 12 arrests were made. A protester and business owner from Bristol told the Guardian: “We’re protesting because this affects everyone. When the fuel prices go up, the price of everything goes up.” The worst affected, naturally, have been those that rely on transport for their living, particularly small businesses that can no longer afford to keep vehicles on the road. 


Energy costs


Households and businesses across the UK are braced for soaring energy costs this winter. Though households are protected from wildly increasing costs by a price cap (albeit one still rising quickly: by £3,500 this autumn and £4,000 next year), businesses, generally locked into one- , two- , or five-year contracts, have no such luck. For those coming off those deals, they are facing down the barrel of a gun. Kevin Preston, managing director of a West Midlands roof and brick manufacturing company, told the Financial Times it was “a cliff-edge scenario”. He continued: “With no relief in prices on the horizon and lack of government support, we all face a very bleak future.”


Domestically, a survey of 20,000 people by Legal & General, a UK-based financial services company, shows that over a quarter of households earning less than £20,000 are worried that they will not be able to make any further spending cuts to pay their heating bills this winter. It also showed that almost half of UK households are worried about being able to manage rent and mortgage payments. 

Rail strikes


Rail strikes have caused chaos throughout the UK over the summer, crippling the state-owned network operator Network Rail, who has become accustomed to issuing the all-too-familiar refrain of travel “only if absolutely necessary”. In London, strikes have been hampering transportation around the capital for six months or so. 

The main reason for the strikes is that union officials maintain that salaries for their workers are not commensurate with the cost of living. With inflation climbing to over 10%, the 8% pay increase offered by the government over two years was, unions argued, the equivalent of taking a pay cut. An estimate from the Office for National Statistics in May, put railway workers, including drivers, at a median salary of £43,747 in 2021, which fell to £36,800 when driver salaries were omitted.

Currently, there seems to be a contentious stand-off between the transport unions and the government, forcing the latter to threaten dramatic action if an agreement cannot be arranged. Transport Secretary Grant Shapps said recently that he would seek to force through some of the measures by enacting legislation “section 188”, which seems to imply permanent lay-offs.

The union bosses called Shapps “desperate” and “out of touch” and accused him of advocating a “fire and rehire” policy.


Healthcare strikes

No sector has escaped the UK’s inflationary wildfire, but when healthcare workers discussed downing scrubs and stethoscopes the nation paid attention. Touted to take place this winter, the potential strikes are in response to the government’s pay increase offer of 5%, which is markedly behind the rising cost of living. In real terms, the Royal College of Nursing says it amounts to a £1,000 reduction in nurses’ wages. 


The Royal College of Nursing is seen as a relatively moderate union and has gone on strike only once – in Northern Ireland – since its formation in 1916. The legal threshold for walkouts is 50% and based on a survey in Scotland, it is believed support for action far exceeds that. With Omicron variants still lurking to trouble an already short-staffed NHS, the prospect of a lack of healthcare workers could be the final straw for a nation mired in frustration and worry on multiple fronts. 

A pent-up country


With financial stress spread across the country between business owners and households alike and widespread strike action affecting an already disaffected country, there is a very real possibility that the frustration could erupt in the kind of riots in major cities that were last seen in 2011. All the indications are that the UK is heading towards some sort of tipping point:

  • Twenty per cent of UK households have a shortfall of £60 per week in their essential expenses according to data from the Asda income tracker collated by the Centre for Business and Economic Research.
  • The amount that UK consumers borrowed rose by 11.6% in April, the fastest rate in 17 years over the summer. People borrowed an additional £1.8 billion in consumer credit in June according to Bank of England data.


When the cost of living exceeds a large proportion of a country's income, citizens can no longer borrow money to pay even for money previously borrowed, frustrations will inevitably be vented. It remains to be seen whether that will occur solely at the ballot box, or on the streets too.

Written By: Olivium staff


References: 

Bank of England: Money and Credit April 2022

WalesOnline: Real reasons food is so expensive now, and getting dearer every day

Citizens Advice: Two-fifths borrowed to pay off Buy Now Pay Later

The Washington Post: Britain’s summer of discontent is thrashing Conservatives

The Guardian: Average UK food bill rises by £454 a year as grocery inflation nears 14-year high

The Guardian: Fifth of UK households now have ‘negative disposable income’

The Guardian: More than one in eight UK households fear they have no way of making more cuts 

The Guardian: Grant Shapps accused of ‘advocating fire and rehire’ to end rail strikes

The Guardian: Grant Shapps writes to RMT leader demanding pay offer be put to vote

Metro: Teachers could be next to strike as Britain’s summer of discontent deepens

The Times: Millions regularly skip meals to save money as food prices rise

The Times: UK inflation hits 10.1% in new 40-year high

New York Times: UK train strikes bring more summer disruptions

BBC News: Rail strikes: Passengers told not to travel by rail as disruption hits

BBC News: Fuel prices: Why is petrol so expensive in the UK?

The Financial Times: UK industry braced for bleak winter as soaring energy costs threaten closures

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