The Cost of Living Crisis and the Jubilee answer

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Today, the energy watchdog for the UK confirmed that the price-cap on fuel bills will rise by 80% in October with average household bills set to go up from £1,971 to £3549.

Since the beginning of the year, I’ve been writing frequently about the Cost of Living Crisis. This is a crisis that is already happening as many people struggle to pay bills for basic essentials, food, shelter, fuel.

I warned in this article that things were going to get substantially worse. We couldn’t simply expect to bounce back from the pandemic. The “new normal” is in fact a return to the old normal. We’ve experienced a cushioned existence for the past thirty or so years or relative peace and prosperity with low interest rates, low inflation, steady economic growth, increasing health and life expectancy and no major military threat close to our border. Yet, that was not the normal before then and is not the normal for many people around the globe. We are returning to a situation where war, disease and economic catastrophe are ever present threats.

Now, in the previous article I argued that this was something that we needed to pay particular attention to as Christians because of the affect the crisis would have on our neighbours, our friends, family and on our church.

It’s something we need to give our attention to because we have a message to give. We have answers in the midst of the crisis. First of all, in word and deed, we have the opportunity to show what it means to live in a fallen, frail, dangerous world with real hope and to give a reason for the hope we have. Whatever else we can do, we should do this and can do this.

But I also believe that in the Bible we find some practical solutions that might just help our communities and nations get through this present crisis. We might sum up the solutions under the umbrella term “Jubilee”.

Jubilee offers a principle for how communities can function healthily over the long term. It is, I believe rooted in an awareness that in a frail and fallen world there are both hard times and good. We can expect there to be cycles of growth and prosperity followed by decline and hardship.

There seem to be two cycles at work. There’s a mini-cycle of seven years. We see this at the end of Genesis when Joseph is is Egypt and Pharoah’s dreams prophesy 7 years of plenty followed by 7 years of famine. Then there seem to be longer cycles of 50 years. You may have a period of time where the shorter term picture is of relative decline so that we are worse off than we were 7 years ago but the bigger picture is that we are better off than we were 50 years ago.

The Old Testament seemed to build these expectations into the routine of life. A Sabbath year every 7 years and a Jubilee (or Sabbath of Sabbaths) every 50. It enabled a level of reset. Land and property was returned to its original owners, slaves were set free and debt was forgiven. There was also opportunity for rest as the land lay fallow.

What if we were to encourage that kind of thinking in government policy. Here are some ways in which it could help.

First of all, we need to return to a principle of using better times to prepare for hard times. This is something that Governments should be well aware of. Margaret Thatcher famously held off from a confrontation with the miners early in her time in office to enable the coal board to build up reserves ready to face down Arthur Scargill in 1984.

David Cameron and George Osborne famously criticized the Blair/Brown government for “not fixing the roof when the sun was shining”. Now, I’m not sure why, but it seems that they didn’t learn from that themselves. Maybe it was because they were too busy fixing one missing tile that they missed a gaping hole or maybe the rain never really stopped long enough but it is pouring in now. We faced COVID without proper preparation for a pandemic and we now are trying to face down Putin’s aggression as he uses energy resources against us. However, unlike in 1984, we have not been building up our reserves. We got rid of gas storage facilities. I hope we’ll learn the lesson for the future but it’s probably too late to do anything about that big picture right now.

However, there are some micro-possibilities we can look at. Gas and electricity costs will hit hardest in the winter months. Many of us are on fixed payment plans. We pay the same each month throughout the year. At the moment, this means we are building up credit for the winter months, we are paying more than what we are using. In January, we will pay much less than we use. The problem is that a lot of the poorest and vulnerable are not on such contracts, instead they rely on having a key card that plugs into the meter. This ensures that they pay for their energy before using it, it’s pre-paid but it also means that they cannot spread costs throughout the year.

I believe that such payment options are anachronistic and are going to add to hardship this winter. It’s time to get rid of them and ensure that everyone is able to spread their energy costs across the year.

Secondly, what it also means is that people have been building up credit for the winter but now, they are going to find that this will not be anywhere near enough to cover the gap in their payments this January February. Responsibility should not be punished. I’m not quite sure of the mechanics here but we should be seeking to ensure that the bills people are charged for this winter properly reflect their wise stewardship over the summer.

Thirdly, we need to look at ways in which those who are better off can look after those in need. I’ve previously talked about the Biblical approach of gleaning and suggest we can implement that in supermarkets so that people can use reward points accrued to help shoppers who are less well off.

I notice that a few of the energy companies have shared that they are setting aside a percentage of their profits to provide hardship help to those in need. This is a form of jubilee/gleaning help. I would encourage more of this. In fact, that’s in effect what a social tarrif would do, those who are better off -specifically the energy companies themselves commit to ensuring that those in need don’t go without. My view is that we need to do more of this. Energy companies need to set aside more of their profits to help struggling customers. Not only that but those bigger companies making greater profits should contribute to meeting the social tarrif costs of smaller companies with tighter profit margins. This is similar to having a windfall tax I guess but it means that help goes directly to those who need it rather than passing through the treasury.

I believe that debt cancellation has a part to play. That’s because we don’t pay our fuel bills in isolation. If you are free from paying a mortgage then whilst rising fuel bills will force you to tighten your belts, you will be cushioned reasonably well against higher costs. So, I’m proposing that we look at a debt cancellation jubilee. In the following areas:

  • Writing off student loans -and to reward those who have already paid off their loans return a portion of those repayments back.
  • Cancelling high interest payday loan repayments.
  • Writing off a proportion of everyone’s mortgage enabling them to pause or reduce payments over a one year period.

On a sidenote, I’d look at ways in which we can substantially increase household incomes to enable people to make ends meet. There’s normally a resistance to this because wage increases are a potential inflationary pressure. However, I believe that in the current crisis, that wages would be such a small part of that pressure that it can for a little while be absorbed, not least because we’ve had over a decade of low increases. I would recommend that the Government lead the way by giving public sector workers a decent pay rise and increasing benefit payments including pensions, universal credit and child benefits.

Each of these measures would make a small difference to bills but as one advert reminds us, “every little helps” and for many this could make the difference in terms of survival through the winter,

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