Germany has rolled out significant discounts on public transport. Image: Unsplash
Laying out his plan to tackle the cost of living crisis in the Autumn Statement, Jeremy Hunt pinned the blame for the UK’s economic turmoil on “unprecedented global headwinds”.
As the world faces the lingering effects of the pandemic, the invasion of Ukraine and rising inflation rates, tens of millions of people across the globe are being plunged into poverty.
A total of 71 million people in the developing world fell into poverty in just the three months up to July as a direct consequence of global food and energy price surges, according to the United Nations Development Programme.
But as the population also faces higher energy bills, tax hikes and spending cuts, campaigners warn the government is not doing enough to help vulnerable people. We looked at what five other countries are doing to tackle the cost of living crisis.
How Spain is tackling the cost of living crisis
Free travel until the end of next year
Spain is offering free travel until December 2023 for short and medium-distance journeys. Free tickets are available on Renfe commuter trains and regional lines covering journeys less than 300km. You need to pay a deposit between €10 (£8.70) and €20 (£17.50), but that will be refunded if you make at least 16 journeys.
The Spanish government had already agreed a 30 per cent discount on public transport including metros, buses and trams.
Crackdown on heating, air conditioning and lights in shop windows
To save energy, the Spanish government has cracked down on heating and air conditioning levels in commercial buildings. Heating should not be set above 19C and air conditioning should not be set below 27C. Doors will need to be closed so as not to waste energy, and lights in shop windows must be switched off after 10pm.
Spain cut VAT on gas from 21 per cent to five per cent, making household energy bills more affordable. The move brought gas VAT in line with electricity VAT, which has been capped at five per cent since June.
Spain has also extended its cap on gas price increases for households and small and medium-sized companies until the end of 2023. Price increases cannot go above 15 per cent when they are adjusted every quarter.
Cost of living support package for vulnerable people
Spain announced a €9 billion (£7.8 billion) package of measures to support vulnerable households in June. It included a rise in pensions by 15 per cent – working out at around €60 (£52.21) more a month. Self-employed people on low incomes below €14,000 (£12,180) per year or who are unemployed also received a one-off payment of €200 (£174).
Germany’s chancellor Olaf Scholz announced a €65bn (£56.5bn) plan to help people in the cost-of-living crisis in September. This included a one-off payment to help more people pay their energy bills, an energy price cap and discounted transport. It will be paid for with a windfall tax on electricity companies and bringing forward an already planned 15 per cent global minimum corporate tax.
It followed two previous relief packages totalling €30bn (£26.2bn). The government had already granted €300 (£262) one-off payments for workers. As part of the latest package, they are also offering €300 to pensioners and €200 (£175) to students.
From June to August, Germany had a scheme where you could get near-unlimited public transport for a whole month for just €9 (working out around £8).
That’s now ended, but there’s a new initiative coming in January 2023 where regional transport will cost €49 (around £43) for a whole month. High-speed ICE trains are exempt from the offer. It’s much more expensive than the original scheme, but it still works out cheaply in the grand scheme of things. For context, a monthly pass for travel in central Berlin will cost you a maximum €86 (£75).
A monthly travelcard for London Zones 1-2 alone will cost you £142.10. You could travel the whole of Germany three times over with that.
Increased child benefits and pensions
Families currently receive monthly payments of €219 (£191) per child for their first and second child, €225 (£196) for the third child, and €250 (£218) for any additional children. From January 1, 2023, families will receive €237 (£207) per child for their first three children.
Pensions also went up by 5.35 per cent in western Germany and 6.12 per cent in the former East German states. They are set to increase again next year, by 3.5 per cent in the east and 4.5 per cent in the west.
Benefits only rose by 3.1 per cent in the UK this year. Rishi Sunak is yet to confirm by how much benefits will increase next year, although he promised that he would uprate them in line with inflation when he was chancellor.
How France is tackling the cost of living crisis
Cap on gas and electricity price rises
In France, gas prices will be frozen and there is a cap on electricity price rises at just four per cent until the end of the year. Special levies on energy companies are expected to reduce the net cost of that price gap from €45bn (£39bn) to €12bn (£10bn).
Increasing public sector pay and benefits
France gave civil servants a 3.5 per cent pay rise in July to tackle inflation. The same month in the UK, the cabinet office rejected a recommendation for an across-the-board minimum three per cent pay rise this year.
Some welfare benefits and pensions increased by four per cent earlier this year in France. And in September, the French government gave a one-off handout of €100 (£87) – plus €50 (£43) for each child – to low-income families on welfare benefits.
Cap on rent increases
Rent rises were capped at 3.5 per cent in July for a year. This means people already living in a property in France won’t see their rent soar to astronomical levels. There is a rent freeze in Scotland, which goes a step further, but it’s not yet been introduced elsewhere in the UK.
Scrapped the TV licence
France has scrapped its TV licence for the mainland, saving around 27 million homes €138 (£121) a year.
How Italy is tackling the cost of living crisis
A costof living support package
Italy announced a €14bn (£12bn) plan with the hope of keeping fuel bills at around 2021 levels. It includes a €200 (£174) one-off payment to people earning less than €35,000 (£30,000) a year. Taxes are being raised on energy companies to help pay for this.
Students and workers earning below €35,000 (£30,000) were able to get €60 (£52) to help with the cost of catching the bus, train or metro.
Keeping gas consumption low
The government asked people to turn down central heating by 1C and turn it off for an extra hour each day. It also encourages limits on heating in public buildings.
How Ireland is tackling the cost of living crisis
Expanded benefits and tax cuts
Ireland unveiled a €11bn (£9.6bn) package of benefits and tax cuts in September. Residential electricity bills will receive €600 (£524) in credits over the winter – and farms and other businesses could claim up to €10,000 (£8,700) a month off their utility bills.
The package also includes further assistance with energy bills to the most vulnerable – in addition to a normal weekly fuel allowance payment, a lump sum payment of €400 (£349) will be made before Christmas to recipients.
There’s also a sum of €500 (£436) given to those in receipt of the working family payment, a double child benefit payment worth €140 (£122) in November, and €500 (£436) paid to people in receipt of disability benefits. These are just a few of the measures announced as part of the package, which you can read about in the statement by Minister McGrath.
Discounts on public transport
The Irish government announced an extension of the 20 per cent discount on public transport and the youth card discount of 50 per cent until the end of 2023. This is on all operators’ services.
National childcare scheme
The Irish government claims its national childcare scheme will put up to €2,106 (£1,838) a year back in the pockets of parents. The measure provides funding to support a reduction of up to 25 per cent in the weekly fee spent on childcare.