The French government is preparing a draft bill aimed at tackling the rising cost of living, including introducing rent caps, increasing social aids and distributing a food voucher to lower-income households.
Inflation reached 5.2% year-on-year in May and is expected to rise to 7% by September, figures from the national statistics bureau of France, Insee, show. It will hover between 6.5 and 7% for the remainder of the year.
The government is hoping to table its spending power bill in parliament at the beginning of July to ease the financial difficulties faced in particular by lower-income households.
Precise details of what will be included in the bill are not yet known but certain aspects have been revealed or hinted at.
The government faces difficulties in getting their spending power bill through parliament without heavy amendments after the legislative elections earlier this month resulted in a hung parliament for President Emmanuel Macron’s ruling coalition.
Rent control and housing aid
French finance minister Bruno Le Maire confirmed yesterday (June 27) that the government is aiming to cap rent price increases at 3.5% for a one-year period. This will be done by limiting the indice de référence des loyers (rent reference index), a scale to which rent increases are calibrated.
Mr Le Maire, who is calling the price cap a “bouclier loyer” (rent shield), said that without intervention rent prices could rise by “five to six percent”.
France’s national housing body the Conseil national de l'habitat has backed this proposition.
The government is also aiming to increase housing aids, known as aides personnalisées au logement (APL), by 3.5% from July 1, subject to parliamentary approval.
Another measure that will be tabled separately to the spending power bill is a possible food voucher (chèque alimentaire).
Final details on this have not been confirmed but it is expected that the voucher will be worth €100 plus €50 for every child in the household.
It will be given to those receiving benefits such as the back-to-work support called the revenu de solidarité active (RSA), disability benefits called the allocation adultes handicapés (AAH), the pension top-up support commonly called the minimum vieillesse (ASPA) and the housing support aide personnalisée au logement (APL).
Around nine million households should benefit from the food vouchers, the Journal du Dimanche reported.
The money will be paid directly into eligible people’s accounts from September, assuming the bill is approved in parliament.
France previously offered a €100 inflation-compensation voucher to everyone earning under €2,000. That wider payment, announced in October last year, was to counteract rising fuel costs. Around 38 million people received the voucher.
Energy price cap extended to end of year
Earlier this month, French Prime Minister Élisabeth Borne announced that the energy price cap will be extended to the end of this year.
The bouclier tarifaire, first introduced in November last year, froze gas prices at October 2021 rates and also limited electricity prices from increasing by more than 4%. The measure was supposed to end on June 30 but has now been extended.
Review of social aids / salaries of civil servants
The government announced today that the salaries of civil servants, including teachers, will increase by 3.5% on July 1.
“This is the biggest rise since 1985,” a spokesperson for Minister of Public Transformation and Service Stanislas Guerini said. “To this, we may add the automatic individual increases, which average 1.5% per year.
“Today, we have 700,000 civil servants on minimum wage. With this measure, there will no longer be any.”
Face au niveau d'inflation sans précédent, nous avons pris une mesure exceptionnelle : l'augmentation générale du point d'indice de la #FonctionPublique de 3,5%.— Stanislas Guerini (@StanGuerini) June 28, 2022
C'est la plus forte augmentation depuis 37 ans ! pic.twitter.com/4ihuzzoqM1
This announcement has not satisfied certain public sector unions, with the CGT calling for a “10% minimum” pay rise applied retroactively from January 1.
“We estimate that spending power has fallen by 10-11% since 2010, and we continue to lose it” said Céline Verzeletti, the CGT’s confederal secretary.
General civil servant salaries have not been put up since February 2017, and have only risen by 1.2% since 2010.
Transport allowance to increase
The transport allowance (prime transport) allows employers to cover part of the cost of the fuel used for work-related driving. It was previously only given to people working outside of Ile-de-France but will now be opened up to everyone.
The government is planning to increase the upper limit of the amount that employers can give out for this bonus from €200 to €400, AFP reported.
Additionally, staff will be able to combine this bonus with a public transport allowance that allows up to 50% of their costs to be covered.