From rent caps to free public transport, here are the French and Spanish policies our governments should consider
New data released this week It shows inflation rising to 4% again. Inflation numbers have risen, but even as they fall, any inflation reading above zero means prices are still rising. Following last autumn's statement, poorest families That would be £200 a week less than the acceptable standard of living. Britain continues to suffer worse cost of living crisis than other rich countries in 2023 Comparable European Countries.
But it's not just everyday essentials that British households can't afford. Families have also been deprived of support generally provided by governments in countries such as Spain and France.
In the UK, this government did implement some policies to cushion the impact of price shocks.This includes financial support energy bills, Bus fares capped at £2energy price freeze and living cost and Winter fuel costss.
However, Spain has been more successful in supporting households through the cost of living crisis, with its government recently decided to keep some policies A few more months to go. Spain goes further than Britain and:
- Cut VAT on basic foods such as eggs, pasta, vegetables and fruit until June 2024.
- Tax credits for people buying electric cars until End of 2024.
- Public transport costs reduced this January replaced Free transportation is provided to the unemployed and those under 18 years of age.
- capped rent increase By the end of 2023, the tax rate for tenants will be 2%, rising to 3% Earlier this year.
- Limit gas wholesale prices Reduce electricity prices for consumers by subsidizing producers.
The rise in UK inflation has been fueled by soaring energy costs following Russia's invasion of Ukraine. Our government is trying to ease the financial pressure on household bills by capping consumer prices at the end of the process. Spain, on the other hand, has solved the problem of high energy prices at the source by: Wholesale electricity prices decoupled Affected by international natural gas prices, natural gas wholesale prices are limited. partial subsidy The cost of lowering prices is paid by consumers who benefit from the scheme in their bills, with the rest borne by the government. AAccording to the Bank of Spainwhich would reduce inflation by 0.5% in 2022.
The French government took a similar approach:
- give financial aid Pay energy bills to households.
- There is a cap on electricity bill increases.
- Rent increase cap 3.5%.
- Deal with leading supermarkets agreeing to offer shoppers the lowest possible prices Daily essentials basketevery three months
- Limiting tariff increases on consumers' energy bills.
Unlike the UK and Spain, the French electricity market is less dependent on natural gas and therefore less affected by gas price fluctuations.Fossil fuels only occupy Power generation in 2022 will be 14%, compared to Spain is 36% and the UK is 40%. This means a different approach to France's energy policy.French government limits energy tariff increases in 2022 to 4% By 2022, this will limit the growth of electricity bills for 70% of residential electricity consumers.They were also stunned natural gas price By 2022.
French politicians also implemented National Energy Conservation Plan. The plan consists of 15 policies aimed at influencing households, businesses, local and government sectors to permanently cut energy consumption by 10% by 2024.These measures include Number“Sobriety bonus' to incentivize households to reduce energy needs. Civil servants get paid to work from home 2.88 euros per dayand french commuters Get 100 euros Incentives for car sharing.The most ambitious policy is actually Launching in 2020and provides households with financing of up to €9,000 to install a domestic heat pump, Boost installation number.
Britain, Spain and France are spending roughly the same proportion of gross domestic product (GDP) as they try to support their people through a cost-of-living crisis.The cost in the UK is equivalent to 2.7% of GDP, while France and Spain allocated 3.5% and 2.2% respectively.
according to Organization for Economic Co-operation and Development (OECD), from February 2021 to May 2023, the UK has allocated a total of US$86 billion to protect businesses and households from rising living costs, while Spain and France have allocated US$431.7 billion and US$98.4 billion respectively.
International energy prices are falling and may continue to fall. But while prices in April 2024 are still expected to be a third above pre-crisis levels, remaining support schemes for people on welfare or disability will be withdrawn in the spring.
French and Spanish policies resulted in lower inflation rate By 2023, this number will surpass that of the UK, although the UK has been playing catch-up in recent months. Their policies are also forward-looking: France and Spain not only provide direct subsidies to households, they also try to alleviate the cost of living crisis by improving energy efficiency and reducing energy demand – by making it cheaper for people to do things like bus transport, opting for electric car, or install a heat pump.
France and Spain have used the cost of living crisis as an opportunity to make it easier for people to make green choices, which will reduce future carbon emissions. The UK government could learn a lesson or two.
Picture: iStock
