Wednesday, April 02, 2008

The rise and rise of the cost of living in England

Even the least perceptive of fellas may have picked up on the correlation between low wages, mental price hikes and the unstoppable rise of debt. Unconvinced? Let's look at our imaginary friend Glenn Gallop from Dudley and work out some simple maths.

For most living mortals, life in Britain is becoming increasingly unaffordable. And, just perhaps, even the least perceptive fella may have picked up on the correlation between low wages, mental price hikes and the unstoppable rise of debt (in turn linked to the looming economic crisis everyone keeps talking about). Unconvinced? Let's look at our imaginary friend Glenn Gallop from Dudley and work out some simple maths.

Say Glenn Gallop is a 39-year-old office worker at his local Council. In 2007 he pocketed £1,000 net a month. Bear in mind his mates are of the opinion Glenn is doing alright. His wages are nothing to write home about, but council jobs are generally viewed as 'steady'. In this day and age, a permanent contract isn't something you take for granted. If anything, the pay rise level of Council workers generates a country-wide look of envy. Well, the local government offer for employees in England, Wales and Northern Ireland amounted to 2.2% (incidentally, UNISON described it as a "slap in the face"), which will take Glenn's monthly pay up to £1,022- a vertigo-inducing rise of £22.

At this point it may be wise to advice Mr Gallop not to go mad with shopping sprees at Merry Hill or with a dinner out with his missus (he may not even mind paying 12 quid for the same wine that is going for £3 at his local Tesco). We still haven't worked out his general expenses.

The dreaded council tax keeps going up. Glenn's home in Dudley figures in the average 'Band D', which means his bill went from about £1,009 last year to £1,057.97 in 2008. Following previous surges of up to 15% a dollop, the government has dressed up this year's national rise of 3.9% as a comparatively 'low' one. As it happens, council tax for 2008/09 is now officially double the amount it was when New Labour came to power in 1997 (even though rubbish collection went from once a week to every fortnight). As his monthly council tax bill went from £84 to just over £88, Glenn's monthly payrise is already 4 quid thinner: from £22 to £18.

Then there's the utility bills. If you were still oblivious to why British Gas, nPower and friends keep trebling their year-on-year profits, then just remember the look of shock each time you pay your bill. Electricity and gas are going up by 14% and 15% respectively. And no, it's not because Glenn Gallop's leaves the Christmas lights on all year round. Anyway, he's got a standard monthly direct debit with British Gas, £48.50 per month (up 6 quid from last year) whereas his nPower monthly bills went from £37.75 to £43.41. Again, an extra £5-50 out of the window. Water is also up by 5.8%, an extra £18 a year, unless poor Glenn decides to cut down on scrubbing sessions.
BT has also increased basic line rental and added other so-called "stealth-charges", which may explain your extra swearing each time you unwrap that bill. Glenn's doesn't use his landline much. He's got a broadband account which costs him £16 a month, but along with the increase in line rental (£10.50) and a few calls plus VAT, his monthly bills are never any lover than £60. And because he hasn't got a direct debit, there's an extra charge of £1-50 per bill. Overall, almost up twenty quid a month from last year.

By now, Glenn's payrise has already been cancelled out. He's £15 a month worse off than in 2007.

But wait. We haven't looked at the TV licence, and there's no dodging it. I tried once and I got done straightaway, ask my friend Vinz. Top quality entertainment takes its toll and whereas ten years ago, in 1998, a colour fee cost a 'puny' £97.50, the new price for 2009 is standing proud at £139.50, which means a monthly fee of over £11.

Transport. In line with the rest of the country, a bus ticket on Travel West Midlands went up by 50% in the period 2006-2008 (it now stands at £1.50) and doubled for the "short hop" option (from 55p to £1.10 but no, you still may have to wait for those gold-plated seats). Every month, Glenn spends up to £12 more than he did last year. But I suppose he should count himself lucky if you consider the price of owning a car (insurance, road tax, MOT and fuel).
Glenn is already around £30 poorer than last year, and that's without counting the price hike in groceries. The government spoke of a 4% retail rise in February but that may be in the dream world inhabited by New Labour ministers. However, even if we accept their propaganda, each shopping trip to his local Tesco, the only supermarket in his area, costs him significantly more than it did last year. And that's without the fancy stuff.
And then there's the mortgage. Two months ago (to be honest, he did so against his parents' words of caution), Glenn decided that buying a house would be an excellent investment. Now look what's happening. Sources reported an average 18% mortgage payment increase in 2007 (an extra £80 a month) for the West Midlands. Poor Glenn's now got £600 a month to fork out. And to think he was moaning when it was almost a hundred quid less in 2006...

Well, if you've read up to this point, you may have worked out that there's no way Glenn's wages can help him make ends meet. Which is why the number of personal insolvencies more than doubled since 2004. But it's precisely due to loans and credit cards that Glenn's yet to feel the immediacy of his financial woes. His credit card may be approaching its limit, but he's still going to book his Ryanair flight to Warsaw and make it for one of his mates' stag do. Oh, and he's toying with the idea of new laptop on hire-purchase too.
It goes without saying that you can't expect this government -or any government - to hammer the point home that you're worse off now than you were before they were voted in. Hence it's no surprise Labour have been saying nowt about it. After years of Blair and Brown lecturing continental Europe on economic management along chants of "we've-never-had-it-so-good", they are yet to wake up from their bubble-like state of delusion. And with the main opposition party called "Conservatives" who's ever going to care? Admittedly the Tories are at least in words acknowledging the horrendous rise of cost of living in the real world but you may be justified for not being able to picture them capping million-worth bonuses at British Gas in favour of cheaper bills. The Lib Dems suggested scrapping the council tax, but until enough Brits decide to give them due credit, don't look to Westminster for help.

So which option now for Glenn Gallop? Shelve his and his lady's dream to start a family? Advertise for room mates at the age of 39 and live like a student all over again oogling at piles of undone washing-up like in them olden days? Pack his bags and head for the 21st century British colony that answers the name of Benidorm? Endure the road-to-Damascus humiliation of asking his old man if he can move back into his old bedroom (still adorned with old 70s posters of the Fantastic Four) and shag in silence when his girlfriend goes round to see him?
Your suggestions are welcome. Send us an email and your advice will be passed to Glenn, or the millions of Glenn Gallops, straightaway.

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