The Cost of Living in the UK

Frightening figures from the UK’s Office of National Statistics (ONS) show rises to basic foodstuffs and fossil fuel costs which will affect everyone, but low and middle earners the worst. The table below shows the average prices from April 2021 to April 2022.

For those of us in Orkney and across the Highlands and Islands the rising costs in heating your home and/ or business in places where the weather is colder and windier than rUK means incomes will be really hard hit.

Highlands and Islands Labour MSP Rhoda Grant has commented on the cost of heating oil which has increased over £500 per 1000 litre. The rise is one of the largest price increases in this year’s ONS statistics.

Rhoda Grant said:

“The increase in the cost of heating oil is one of the biggest prices rises within the ONS statistics. It directly impacts people living off grid, and yet, we have seen no substantial aid package from the SNP or the Tories.

“Even in the Scottish Tory leader’s own constituency, off grid homes are facing destitution because of soaring heating oil costs. How can Douglas Ross not have clarified what support is available for his own constituents?

“With reports of people stealing oil and gas cannisters out of desperation and pensioners choosing between putting the heating on or eating dinner, we need urgent government intervention if we are to stop rural Scotland being plunged into Victorian era style poverty.”

A few days ago UK Chancellor, Rishi Sunak announced that  the energy bills discount due to come in from October is being doubled from £200 to £400, while the requirement to pay it back will be scrapped.  

A new temporary 25% Energy Profits Levy would be introduced for oil and gas companies. The 25% levy is expected to raise £5 billion in its first 12 months. Rishi Sunak said that the oil and gas sector is making extraordinary profits. The UK Government wants to see the sector reinvest these profits in oil and gas extraction in the UK.

It may seem extraordinary to be increasing investment in oil and gas extraction when it was declared in 2014 that those reserves were running out in Scotland but that was the story then in the midst of a Scottish Independence campaign. We are in a climate emergency but these ‘rediscovered’ reserves in Scotland’s waters will now be incentivised for exploitation saving companies 91p for every £1 they invest. Nearly doubling the tax relief available – the more a company invests, the less tax they will pay.

The Scottish Government’s Finance Secretary Kate Forbes has welcomed the short term action announced by Rishi Sunak.

Kate Forbes said:

“Inflation is at its highest levels in 40 years and the UK Government’s failure to fully invest in increasing incomes, tackling inequality and boosting economic competitiveness will only risk pushing households into further debt and poverty

“The UK Government has almost £30 billion of fiscal headroom, spending only half of this during a cost of living crisis does not go far enough, especially when a further £5 billion from the Windfall Tax will be raised.

“The introduction of a windfall tax is a start, but as a stand-alone measure this means Scottish industry is carrying the weight of UK-wide interventions.  

“The removal of the £20 Universal Credit uplift last year was a hammer blow to hard pressed families and the Chancellor’s failure to restore it and increase it to £25 only places a disproportionate burden on the shoulders of those who need help most.

“The refusal to reverse the National Insurance increase implemented in April and temporarily suspend VAT on household energy bills will also cost families hundreds of pounds annually at a time when their budgets have never been more squeezed.”

Energy is a reserved matter. The Scottish Government has a fixed budget. It is investing almost £770 million this year in cost of living support and doubling the Scottish Child Payment to £20 per week. Earlier this year it increased eight Scottish benefits by 6%, the rate of inflation at the time, and introduced a range of benefits not available elsewhere in the UK.

Emma Roddick SNP MSP for the Highlands and Islands said:

“It is deeply concerning that people who are already having to budget to heat their home may now find it completely unaffordable.

“While packages to help people with energy costs are extremely welcome, if overdue, we cannot allow those living off-grid and facing extortionate increases in their household bills to be forgotten by either government”

Fiona Grahame

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