London’s cost of living crisis: Boris needs to help ease the burden on households

Labour’s message to London Mayor Johnson is simple, when you’re able to help and support people by easing the burden on household finances, you should.

Len Duvall AM (Labour, Greenwich and Lewisham) is the leader of the Labour group on the London Assembly

The recent inflation report for July, that will be used for calculating rail fares across the country and transport fares across London – showing an inflation rate of 3.2% – makes grim reading for households who are already struggling.

In London private sector rents continue to rise above inflation and well above wage increases.

At the same time child care costs are on the up, with London parents on average spending more than £6,000 a year on a part-time childcare place in a nursery – putting even more pressure on working families.

The recent drought in the USA is expected to push food prices higher later this year and energy prices are also expected to continue their upward trend. We’ve just seen SSE raise their prices by 9 per cent. As always fuel rises take effect before the cold weather kicks in – just in time for the energy companies to cash in on our need to keep warm.

Some of these cost pressures could be tackled by the government investing in decent childcare provision, better regulation of the energy market, building enough housing and introducing rent regulation to help low income families in these difficult times.

Even if implemented today these changes would take time to have an impact and help household budgets. However, in London the Mayor controls transport fare levels. Boris Johnson’s stated policy is to raise transport fares in London at RPI plus 2%.

On his watch, transport fares have significantly increased, bus fares have gone up from 90p to £1.35 and weekly travelcards for zones 1-6 have risen by 20% to £53.40 – this means people are paying £457 extra each year just to get to work. The Mayor is chair of Transport for London and has it within his power to help Londoners who are struggling.

 


See also:

Inflation is worse for the worst off 6 Nov 2011

Could earnings-based rent-control replace quantitative easing? 26 Sep 2011

Miliband’s “squeezed middle” message gains ground 25 Mar 2011

The challenges ahead in raising living standards 28 Feb 2011

Miliband to warn of “cost of living crisis” 28 Feb 2011

Time to think again about the way we measure inflation? 15 Feb 2011

How the recession is hitting low earning households hardest 23 Oct 2011


 

Boris Johnson’s attention is already starting to shift from his job as Mayor of London to position himself nationally. As recently reported he is planning on going “part-time” after the Olympics. He needs to focus his full attention on his current job and use his position to stop his above inflation rises and help Londoners during this difficult period.

Our message to Mayor Johnson is simple: when you’re able to help and support people by easing the burden on household finances, you should.

6 Responses to “London’s cost of living crisis: Boris needs to help ease the burden on households”

  1. Nick

    Time to up interest rates.

    The BoE Target needs to be prices, not inflation. Currently they are repeatedly getting it wrong, but the inflation target means they keep writing a sorry letter, then carrying on.

    If inflation overshoots the target should mean they have to get prices back to the level their should have been.

  2. Selohesra

    But that what Govt wants & why they support QE – they want to inflate the debt away & start again. A bit tough on the retired or those like me nearing retirement as we have less time to start again

  3. Newsbot9

    They’re always “surprised” when inflation rises when they do QE…the liars.

  4. bgeb

    if inflation overshoots, ie 3% rather than the target of 2% then they will never try and target 1% to make prices even out at the target 2%. they would say too risky. could have devaluation. they would certainly never try and make prices unchanged over a long period of time (ie average inflation 0%). or there would be no advantage putting our savings into banks to be made available to the rest of the economy.

    as Selohesra says below, inflation transfers money to debtors (ie governments) from creditors (mainly pensioners). letting inflation rip is just too tempting not to do (although the long term effect on the economy is negative – but hey, who gives a monkeys about the long term!)

    Hayek used to say that history is really the history of governments getting into trouble and then devaluing the money supply. maybe we need to take money out of the hands of governments.

  5. ff

    yes! and QE=inflation almost by definition, you increase the money supply, the value of each unit goes down.

  6. Repeal the Act!

    Rail and bus fare are forced up by green climate policies. The future is green and miserable.

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