Should rich firms do more to help? Millions of people are struggling to pay their bills as the cost of energy and food spirals. But few agree on who exactly should shoulder this burden.
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Fears grow as cost of living crisis cuts deep
Should rich firms do more to help? Millions of people are struggling to pay their bills as the cost of energy and food spirals. But few agree on who exactly should shoulder this burden.
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Classrooms with no textbooks. Lessons cut short to slash the cost of running the school. And for 800,000 students living in poverty, no food at lunchtime.1
This is called a "cost of livingThe money that someone needs to afford basic food, housing and clothes. crisis." Costs of necessities like food and energy are increasing, and almost every part of life is affected.
Europe has been hit by a series of protests and strikesWhen people refuse to work as a form of protest. because of this crisis. In the UK, people are responding by joining unions, going on strike and changing their political views.2
British prime minister Liz Truss has suggested turning the UK into a low-tax economy to deal with the issue. This means reducing tax rates for people and businesses who earn more money, so that they also have to pay less money to the government.
Truss believes that this will boost economic growth, because those who are richer will have more free income to spend on goods and services. For her, it will mean an injection of money into active circulation. This theory is known as supply-side economics, and the UK is unique in taking this approach to solve the cost of living issue.
The policy is controversial. Many consider that it will increase inequalities, as it means that those who are already rich will be spared the struggle of the cost of living crisis, whilst those who have low incomes will feel it more deeply. Some are asking why normal people are once again expected to "tighten their belts", whilst high earners get a free leg-up from the government - they think that firms should pay.
One thing is clear: a solution must be found for the cost of living crisis. But few agree on who should shoulder the burden.
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Should rich firms do more to help?
Yes: People and businesses who have more money should be expected to pay their share, not get more money. How is that fair when ordinary people are cutting down?
No: We need to look for economic solutions, not moral ones. Trust the economists in the government. If they say this is the right solution for the long term, it is.
Or... A mixture of policies will be the right approach. If we offer to help those who are better off, we should help low-income people too somehow.
Keywords
Cost of living - The money that someone needs to afford basic food, housing and clothes.
Strikes - When people refuse to work as a form of protest.
Fears grow as cost of living crisis cuts deep
Breaking point: Nearly half of adults in the UK say they are buying less food than before. Glossary
Cost of living - The money that someone needs to afford basic food, housing and clothes.
Strikes - When people refuse to work as a form of protest.