Inside the UK’s ‘stressful’ cost of living crisis Burnham hopes to tackle | Business and Economy News
London, United Kingdom – For several weeks, until her daughter is paid, Donna O’Hara is unable to buy food. On those days, she goes to a food bank instead, or borrows money to get by.
The 54-year-old, who has four children, started relying on food banks, nonprofit initiatives that collect and provide free emergency food to those in need, after her son and his girlfriend moved out following the birth of their baby in February. They had been contributing to the household bills, and losing that income tipped things over the edge.
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“Mentally, it’s just stressful and it’s embarrassing having to go to the food bank, utterly embarrassing,” she says. “I hate asking people for help. I hate borrowing money.”
The stress compounds an already precarious situation.
O’Hara has multiple myeloma, a blood cancer, and has been hospitalised three times since October on life-saving antibiotics after infections forced her to pause chemotherapy. Her cancer is in remission, but doctors have told her it is likely to return before she can resume treatment. Her husband died of lung cancer last year.
Two of her children are on Universal Credit, the UK’s main working-age welfare monthly payment, including support for housing, children and low income or unemployment.
After paying child maintenance, her son is left with 340 pounds ($460) a month to live on after the payment. He cannot work because he is waiting for gallbladder surgery.
“Who can live on 340 pounds a month?” O’Hara said. “And because I’m always helping him out, that cuts into my money.”
Her own housing benefit payment is 1,800 pounds ($2,440) a month, against rent of 2,500 pounds ($3,390) for a private property with the downstairs toilet she and her late husband both needed because of their cancer treatment. She has fallen behind, and expects to be evicted.
“The day the bailiffs come round, I must be packed and ready to go into the housing they put me in,” she said. “Who knows where I’m going to end up?”
‘Damaging structural factors’
The UK has been in an acute cost of living crisis since inflation surged from late 2021, driven initially by pandemic disruption and then by the spike in energy prices following Russia’s invasion of Ukraine.
But for households like O’Hara’s, the strain runs deeper, with its roots in more than a decade of austerity, weak wage growth and stagnant productivity, compounded by the economic impact of Brexit.
That longer history is central to Prime Minister Andy Burnham’s political pitch. To tackle the UK’s cost of living crisis, the new premier has set out a 10-year plan built around expanding social and affordable housing, reforming Universal Credit and investing in local economies.
He is currently touring the nation to engage with people’s financial concerns.
Universal Credit is meant to act as a safety net, but for many, including O’Hara, it no longer stretches far enough to cover it.
Research from the Joseph Rowntree Foundation puts scale behind stories like O’Hara’s.
“We estimate 7.4 million low-income families were unable to afford at least one essential item in the last six months,” said Sam Tims, the charity’s lead analyst, pointing to cutbacks on heating, toiletries and food. “This is at a record high.”
Tims traced the roots directly to policy choices.
“The combination of all these damaging structural factors has left our economy weaker, our wages lower, our rents higher and our income safety net in need of repair,” he said, noting that the basic rate of Universal Credit support is lower now than a decade ago.
He welcomes the removal of the two-child benefit limit in April, estimated to have lifted about half a million children out of poverty, but argues it needs to be paired with a “protected minimum floor” in Universal Credit and higher local housing allowance rates to make private rents affordable again.
Adam Lang, director of policy at Carnegie UK, says the think tank’s polling shows just more than a quarter of households could not afford an unexpected 850-pound ($1,150) expense, and one in 20 cannot afford to feed everyone at home.
“What is striking is that we’ve conducted the same survey for the last three years and we see no real improvement on most of these measures,” he said.
Lang cautiously supports Burnham’s approach, but warned against expecting a single set of measures to fix things.
“It is heartening to hear the UK government talk of a 10-year plan,” he said. “On the other hand, it is clear that life is too hard for too many and change is required.”
He argued that governments need to track wellbeing alongside growth and employment, so policymakers can see “not just how the economy is performing, but how people are doing”.
Evelyn Henderson-Child, senior researcher at the Centre for Local Economies (CLES), said that even when growth does happen, it does not reliably reach those navigating the crisis.
“GDP [Gross domestic product] can kind of swish on upwards while the foundational conditions of life, community resilience and people’s financial stability are eroded,” she said, pointing out that growth-focused policy tends to prioritise high-productivity sectors while overlooking the ones that actually sustain society and offer significant amounts of employment, such as food, retail, transport, housing and care.
The answer lies less in growth itself and more in who benefits from it, she believes.
“Traditional policy tends to rely on patching up inequality, if it does at all, after wealth is generated and concentrated at the top,” she said. “It’s about pre-distribution, rewiring the economic system from the get-go so that economic and social benefits are spread more evenly.”
But the debate over growth statistics and structural reform is of little consequence for O’Hara.
“Some people say ‘work on a budget’. Try working on a budget when you have to count your pennies just to get a loaf of bread,” she said. “It’s not my fault I got cancer and can’t go to work. Life shouldn’t be like that.”
