If Truss becomes leader of the ruling party on Monday, as is widely expected, she will need all the guile and guile of the Iron Lady as she enters a scene straight out of the 1980s: a looming recession, industrial turmoil and urban decay. In a sign of the times, an area straddling the River Mersey near Liverpool that was once an industrial heartland now has a less illustrious claim to fame: families there are seeking protection from creditors at the fastest rate in the country. Sign up now for FREE unlimited access to Reuters.comSign up South of the river in Runcorn, where business parks and logistics centers sit alongside shops and churches asking for donations for desperate families, ex-soldier Eddie Thompson is taken aback by what has become of his hometown. Returning after 38 years in the military, Thompson quickly volunteered to run food banks, as the sight of so many people sliding into poverty, unable to cope with rising food and energy prices, took him back to the bitter days of the 1980s. “I think it’s shocking,” the 57-year-old told Reuters. When Thatcher came to power in 1979, she inherited a stagnant economy, rising inflation and waves of industrial unrest that swept through the following years, ushering in the free market policies that defined her legacy and endure today. Rising through the ranks of the party, Truss was photographed in a tank, wearing a Russian hat in Red Square and sitting astride a Triumph motorcycle, all looking like pictures of Thatcher. If Truss beats former finance minister Rishi Sunak in an election to lead the ruling Conservative Party and become prime minister, she will face similar controversy. Rising wholesale gas prices due to the Ukraine war are hitting countries across Europe, but Britain is particularly dependent on natural gas for electricity and heating, pushing its inflation above all other major economies. Growth is lagging, and workers waking up to years of nonexistent real wage growth — from train drivers to lawyers to nurses — are spoiling for a fight for higher wages to offset inflation running at 10 percent. On the campaign trail, Truss said she would provide help but did not elaborate, other than that she prefers tax cuts to “handouts,” while Sunak says support should be more targeted.
“THEY WILL BE PRAYED FOR”
The cost of the turmoil is evident in places like Runcorn, where ex-soldier Thompson is handing out emergency parcels to six food banks in the town helping those who can’t make ends meet – many of whom work full-time. “I’ve seen people who haven’t eaten for days and the only reason they’ve gone over that limit is because it’s starting to affect their dependents,” he said. Runcorn’s food banks served 3,295 people in 2017/18, but four years later that number had risen to 5,881 – similar to the workforce once employed locally by Imperial Chemicals Industries (ICI), which dominated the area in the 20 century. St Michaels and All Angels Church in Runcorn is urging its congregation to buy an extra item in their weekly donation shop – deodorant, shower gel, seasonal produce, baby food. Bethesda Church offers tea and prayer to those collecting emergency food parcels. “Not everyone will take up the offer, but that’s okay. They’ll be prayed for anyway after they leave,” she says on her website. Food bank staff say many people arrive in tears. A hospital worker wore sunglasses to hide her eyes. “He was at work,” said Anne McPoland, president of the food bank’s board of directors. “But she said, ‘I’m so embarrassed, I don’t want anyone to see me.’ Usually visits to food banks decrease in the summer as people spend less on energy, but this year demand remained high. The biggest threat to households now comes from the rising price of energy. Average annual bills are expected to rise 80% in October to £3,549 ($4,130), before an expected rise to £6,000 in 2023, decimating personal finances. The Trussell Trust, which supports a nationwide network of food banks, says it sees a spike in applicants every time the price cap on energy bills rises. The scrapping of the £20-a-week welfare allowance, introduced during the pandemic and scrapped last October, led to a similar jump. The National Institute for Economic and Social Research, meanwhile, estimates that one in five UK households will have no savings by 2024. Finance Minister Nadhim Zahawi has warned that those earning 45,000 pounds ($52,000) a year – well above the average of 31,285 pounds for full-time workers – may struggle to pay their bills.
BREATHING SPACE NEEDED
Thompson’s efforts at food banks in Runcorn are echoed across Britain amid the biggest blow to livelihoods since records began in the 1950s, threatening low- and middle-income families. According to the Resolution Foundation, the top 10% of households in Britain are wealthier than in many European countries, but middle-income homes are not. They are 9% poorer than their counterparts in France and the poorest fifth of households in Britain are now more than 20% worse off than their counterparts in France and Germany. While millions of people in Britain have benefited from rising house and stock prices due to low interest rates, those without such assets are in the doldrums with little financial protection. This 15-year change in fortunes has also been combined with a global financial crash, four UK elections, referendums on Scottish independence and the European Union and a global pandemic, creating a sense of near-constant crisis. In Runcorn, the recession is likely to hit hard. The local authority of Halton, which includes both the port city and Widnes across the River Mersey, was already ranked as the 13th most deprived in Britain in 2019. In recent months, the council has seen an increase in demand for a program that provides breakfast to schools so children don’t go hungry. And the debts are increasing. Halton has the highest rate of applications in England and Wales for a new ‘breather’ scheme which gives debtors up to 60 days of protection from creditors. The two legislators who represent Runcorn and nearby areas in parliament say they are getting more and more messages from families and businesses who can no longer pay their bills. “I’m getting more emails with capital letters, which is always a bad sign,” said Mike Amesbury of the opposition Labor Party.
“FRACTURES IN SOCIETY”
Derek Twigg, who has represented Halton for Labor for 25 years, said the difference between now and the 1980s, when he worked for the local council, was the number of middle-income families coming to him for help. “I can’t remember, apart from that 80s, that there has been such a traumatic period, since the pandemic,” he said. “Inflation is causing real economic distress. It feels like these fractures in society are happening again.” Halton’s ability to respond is limited by a 31% cut in the council’s budget over the past decade, imposed as part of national austerity measures in the wake of the fallout from the global financial crisis. And more cuts are on the way, forcing greater reliance on charities. FareShare, which distributes surplus food from retailers and farmers, has handed out 40,000 meals in Halton so far this year. So far, the government has responded to the energy crisis with a £37bn package in May, which included a £400 credit on energy bills from October and a one-off payment of £650 for 8 million low-income households. Since then, energy costs have more than tripled. The gap between people’s wages and their living costs has already led to widespread industrial action nationwide and Runcorn was hit by the fallout when bus strikes made it harder for people to get to food banks. Thompson said local businesses were extremely supportive, but he still felt like the country was going back to the 1980s. “From garbage on the streets to strikes, unrest and suffering of people to food poverty and fuel crisis: they cannot keep up with the cost of living,” he said. ($1 = 0.8593 pounds) Sign up now for FREE unlimited access to Reuters.comSign up Reporting by Andy Bruce in Runcorn and Kate Holton in London. Kate Holton writes. Edited by David Clarke Our Standards: The Thomson Reuters Trust Principles.
