The government is stressing households to the limit and beyond when it should be taking the strain

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On a morning when I am not overly endowed with time the standout story in the media this morning is about growing poverty.

The FT is reporting that 57% of households are already cutting back on food to make ends meet. The Guardian suggests 2 million households are now facing days without food for the same reason because they cannot afford a proper meal every day. The FT also notes that this is before an expected £900 increase in energy prices this autumn, the estimate coming from Scottish Power. And it notes that people are already borrowing on dangerous short term schemes to fund fuel bills, which is a crisis that can only escalate.

As I have pointed out time and again, even if the government refuses to tackle monopolistic profit-making by energy companies, here and internationally, there is a great deal it can do to prevent rising energy costs.

It could change the basis for electricity pricing, which maximises profits at cost to the consumer.

It could cut VAT, duties and levies to cap prices.

And it could simply subsidise what is still left over, at least for less well off households, either directly or by increasing pensions and benefits.

Technically all these things are possible, and quickly. But they are not being done. Nor is there a hint that they are going to be done.

Instead, the government has decided to prioritise its finances over those of the poorest households in the UK. Let me be clear about what I mean.

This fuel price crisis will increase UK government revenues. Whenever tax is based on the price of a commodity and that price, pre-tax, goes up, the amount of tax goes up. When the amount of tax, in various forms, collected in proportion to the price pre-tax is high, and on most fuel that is the case in the UK, the increase in government revenue is significant.

So, ignoring the knock-on effects of this crisis in terms of company failures, rising unemployment, debt crises, banking crises and housing crises, most of which have yet to emerge and so are being ignored by the government, this crisis is so far good the Treasury. I am certain that is the Whitehall view right now. The Treasury will be delighted that it is getting greater revenue. Any other consideration has, I suspect, been forgotten.

But the consequence is that in the face of a cost crisis the government is making things worse for the most vulnerable. And this is not only with regard to their immediate ability to pay essential bills, it is also destroying the already vulnerable balance sheets of the least well off.

You could say that discussing personal balance sheets when people can’t eat is an indication of indifference. I disagree. That would be the government line. They are indifferent to people's well-being. I am concerned for people's resilience and that means that they need a personal balance sheet with some resources still available to them on which to draw in an emergency. If you remove those reserves that cover that possibility not only does a previously manageable event become the tipping point into a crisis but the stress that this might happen does, by itself, create all sorts of trauma for those involved. The deliberate decision by the government to make those with least push their finances to the limits, and beyond, to just pay routine bills is callous.

The alternative would, of course, be for the government to increase (but not stress) the size of its balance sheet. It could simply create new money to solve this issue right now. There is no evidence that quantitative easing has ever caused consumer price inflation, and none that it will. The government could simply create the new money required to tackle this crisis in that case.

In fact, I would argue that it needs to do that. In an inflationary economy, there is a need for new money supply. That is inevitable. The government should be the agency creating it using quantitative easing. It should not be relying on new lending by banks to create that money at this time when that increases stress.

Alternatively, it could increase the interest rates it offers on savings products and bring in new money instead. It is very easy to do: NS&I could pay more competitive rates and attract all the money the government needs right now to cover the cost of the fuel price crisis. And yes, National Savings accounts are part of the so-called 'national debt', which simply makes clear that this so-called debt is entirely made up of savings accounts of varying sorts for those wealthy enough to be able to save.

So what we are actually seeing here is not just indifference to suffering but lousy financial management by the government, which is reducing its own stress and deliberately increasing that for many households to levels that are dangerous, or beyond that. As reckless irresponsibility goes that takes some beating.