In a drive to tackle soaring living costs, Germany has introduced a cap on travel expenses.
From innovative policies to encourage lower energy use, to encouraging citizens to use public transport, many European countries have acted more decisively than the UK to help people through the cost of living crisis.
In Germany, a three-month initiative that started on June 1, means people can travel around the country for just €9 (£7.50) a month.
All local and regional transport on buses, trains and the metro are included in the government’s initiative, expect inner-city trains.
Germany’s transport minister, Volker Wissing, has described the €9-a-month tickets as a great opportunity and success. “It’s a success that we’ve already sold seven million tickets,” he said.
The scheme is also designed to discourage people from using their cars.
However, fuel tax has been reduced by around 30 cents a litre for petrol, bringing prices down to less than €2 a litre.
Diesel prices have also been brought down to the EU minimum for the next three months, meaning a litre of diesel has been reduced by around 14 cents.
Other measures imposed by the German government to help alleviate soaring living costs include people in work receiving a one-off rebate of €300 to help with energy costs in the autumn.
In July, recipients of child benefit will receive a €100 bonus. People on welfare benefits will also receive €100.
France caps energy prices at 4%
After announcing a one-off €100 (£84) payment in 2021 to 5.8 million households receiving energy vouchers, the French government forced the state-owned energy provider to cap wholesale prices for a year.
In September 2021, a ‘bouclier tarifaire’ – shield against tariff increases – was introduced, meaning that electricity rates have been capped at a 4% rise, rather than 44.5%, and regulated gas tariffs have been frozen rather than increasing by 60%.
The Brussels-based think-tank, Bruegel, says France is expected to spend around €38bn (£32bn) to support citizens through the cost-of-living crisis.
Many European countries have also been implementing support schemes for home insulation. For example, in March Ireland passed a grant policy that provides up to 50% of the costs of a deep retrofit.
Meanwhile the UK is accused of having nowhere near the same ambition. In June, the boss of E.on pleaded with the government for more home insulation and home upgrades, saying Britain massively needs to ramp up its energy efficiency drive.
Spain’s ‘plan anti-crisis’
In March, the Spanish government announced a series of initiatives to address the rising cost of living. At the time, President Sanchez, said the measures are “intended to help the most vulnerable families and sectors,” and would last until June 31, at least.
Now the Spanish government is negotiating measures that could form part of the new expansion of the country’s ‘plan anti-crisis.’
The initiatives could include further discounts on fuel prices, which currently are €0.20 off every litre, and the introduction of a €300 benefit, in order to help families at risk.
Netherlands slashes VAT on energy bills
With food bank usage in the country’s largest cities having risen sharply, the Dutch government announced several billions worth of euros to help the poorest households with increasing living costs.
The measures have included increasing the energy benefit from €200 to €800 and slashing VAT on energy bills from 21% to 9%.
The VAT reduction is expected to save all households around €140 over six months.
How much European countries are spending to help with energy bills
Analysis by the BBC looked at how much European countries were spending to help households with energy bills.
It found Italy was the highest, providing 2% of support as percentage of GDP to help with energy bills. This was followed by Spain at 1.7%, and then France, which is spending 1.5% of GDP to help with soaring energy bills.
Both Germany and the UK are spending 0.8% and the Netherlands, 0.7%, the BBC’s research found.
UK criticised for not going far enough
The UK government has announced several support packages to help people through the current financial crisis, including two cost-of-living payments to households receiving welfare benefit. It has however been accused of acting indecisively and criticised for not going far enough, particularly to support low-income families.
Rishi Sunak’s spring statement was heavily criticised for providing almost no targeted support for low earners.
Where as France has capped energy prices at 4%, millions of UK households saw their gas and electricity bills jump by more than 50% in April after energy regulator Ofgem announced a record-breaking increase to its price cap.
In May, the chancellor announced new policies to tackle energy costs and to provide help for those for whom the “struggle is too hard and the risks are too great” amid the cost of living crisis. The support includes a “temporary targeted profits levy” to tax extraordinary profits of energy companies, while still incentivising investment. The package of measures also includes providing 8 million low-income households with one-off increases to welfare payments in 2022.
The measures received a mixed response, with charities and anti-poverty groups saying it provides temporary relief for millions of households but leaves those on the lowest incomes facing uncertainty.
Sunak has rejected calls for permanent increases in benefits to cope with rising prices.
Household Support Fund
A key component of the support for low-income families has been the £500m Household Support Fund (HSF). The fund was introduced last autumn to help poorer families with essentials. In response to accusations that the government is not doing enough to help people cope with soaring inflation, ministers have been citing the HSF.
However, in May it was revealed by the Observer that the funding has not been available in some parts of the country for months, after councils ran out of money.
Dame Clare Moriarty, chief executive of Citizens Advice, said: “Since the start of the year, we’ve seen record-breaking levels of demand for crisis support amid the cost of living squeeze. Nowhere near enough of the help from the government has been targeted at the low-income households who need it most.
“It’s concerning that this limited assistance meant certain councils had to close their schemes early. With only the same amount of money going in again this April, and cost of living pressures rising still further, this won’t be enough for those struggling.”
Tories became caught up in a fresh cost of living row when a top Tory minister suggested some people should get a better paid job or work more hours to cope with soaring bills.
Minister Rachel Maclean provoked a backlash when she said it could be a “long-term” plan to “make sure people are able to protect themselves better” in the cost-of-living crisis.
In response to the comments, Lib Dem Wendy Chamberlain said: “So the Conservatives’ answer to the cost-of-living emergency is that people should just earn more? This shows just how out of touch they truly are.”
Meanwhile, as Germany offers €9-a-month travel tickets, people have been quick to share their discontent over the cost of public transport in Britain, where fares for trains have increased by a fifth in real terms since privatisation.
Summing up the disparity, one Twitter user said: “My boss lives in Germany. 9 euros a week, travels all over Germany. He priced London to Leicester while over her last week and when it was over £100 he just refused to go.
“It’s a joke.”
Gabrielle Pickard-Whitehead is a contributing editor to Left Foot Forward
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