One of Britain’s most prominent retailers has called for a major welfare boost for the poorest as pressure mounts on Chancellor Rishi Sunak to act on the cost of living crisis.
Stuart Rose, chairman of Asda and a Conservative peer, effectively backed the reintroduction of a £20-a-week increase in universal credit introduced at the start of the Covid pandemic to help people on low incomes. He said some were seeing “shocking” increases in their bills and warned that pressures were likely to linger into 2024.
“We have a national economic emergency and we all have to come together and solve it,” he told the Observer. “Doing nothing is not an option. We have to act and act fast. Even if things improve next year, prices will continue to rise as inflation falls. The people we need to worry about are those with the lowest incomes. They are really fighting.”
Rose is the latest conservative senior business figure to urge immediate action. Last week, Tesco chairman John Allan called for support, saying there was now an “overwhelming case” for a windfall tax on energy companies to help those suffering the most from the cost-of-living crisis. Rose said he was “nervous about a windfall tax” and believed direct, targeted help for lower earners was a better approach.
“I think it needs to be done through welfare, it needs to be carefully targeted,” he said. “It has to be an intervention that makes a significant difference to people. I don’t know how people with lower salaries and a couple of kids are going to get by this year. If you have a disease, you give medicine until you are cured and then you take it off. You just have to explain it carefully. People will understand. You would be having a very, very specific intervention that makes a significant difference to people – the equivalent of £1,000 a year.
“It is shocking. This has been going on for months, if not longer. It’s shocking that it just looks like we saw it coming.
“The second thing to say is that this is not going to be temporary. This will have a continuing effect on the economy and therefore consumers through 2024. That’s a big deal.”
His intervention comes after Sunak said an old computer system used by the Department for Work and Pensions (DWP) prevented him from increasing benefits further in the spring statement. He admitted that citing glitches “sounds like an excuse,” but was told there might only be a once-a-year raise for people with some benefits.
Several Conservatives have been pushing for action. Boris Johnson has refused to rule out introducing a windfall profits tax, while Sunak has suggested it could be an option if energy companies don’t invest in the UK. However, many parliamentarians want tax cuts to be brought forward or to be helped through the benefits system. The government increased benefits by 3% when inflation is running at 7% and is expected to hit 10% by the end of the year.
Rose, a figurehead in the Stay Before the EU referendum campaign, lamented the fact that he felt he was “not allowed” to cite the impact of Brexit on the cost of living crisis. “It is the single largest economic disaster that has befallen this country, and it will have a continuing negative effect for some time.
“It has been conveniently camouflaged and ignored due to Covid. It was the best excuse the government had to cover up all the negative effects of Brexit. Transportation, insurance, freight, administration and labor costs have increased. It has created the problem we have with Northern Ireland. Trade with Europe is down by an amount greater than any new trade we got from overseas forays, where people were running around the world saying, ‘We have another trade deal.’ We can’t reverse it, but my God, at some point someone has to be honest and have a proper balance. No one wants to be seen as a ‘Remoaner’, but it’s actually quite shocking. If it wasn’t so shocking, it would be comical.”
He said he believed a politician would emerge in the next generation willing to champion a closer relationship with Europe again: “There is a young man or woman, probably already around, who will be standing on an orange box in 10 or 15 years.” he time, saying, ‘I have this vision.’ I think we will be back in Europe, kind of differently structured, but closer to the Europeans in some kind of trade, in the mid-2030s. That’s my prediction.”