Action Needed Now to Address Cost of Living Crisis

The Scottish Government Resilience Room (SGoRR) will meet this week to discuss what steps can be taken to help Scots with the cost of living crisis.

Nicola Sturgeon, First Minister of Scotland has called for an emergency meeting with the UK Prime Minister and the heads of the Welsh and Northern Ireland governments.

Householders are being hit with huge increases in the cost of energy to their homes, high fuel prices at the petrol pumps and a steady increase in the price of food. With wages unable to keep up with the rising cost of inflation, the UK will see more industrial unrest this Autumn and Winter. For those on fixed budgets, pensioners, those receiving Universal Credit and disability benefits, the outlook is even bleaker.

There is only so much the devolved governments can do to mitigate the looming crisis as they all have fixed budgets. Only the UK Government has the powers required to change the situation.

The UK economy has been weakened extensively by the consequences of leaving the EU, the world’s largest Free Trade market; by the Covid-19 pandemic with 1.8million struggling with long Covid; and with the global rise in oil prices.

Meanwhile, Boris Johnson, still currently UK Prime Minister, has taken no action to guide the UK out of this crisis. The Tories are focussed solely on internal party affairs as they choose Johnson’s successor.

In a recent article ‘The Economy – Don’t Panic But Do Worry’ for the Fraser of Allender Institute, James Black, points out the rising cost of materials to businesses in Scotland.

The past four quarters have shown cost increases across the board. Costs for energy, employees, inputs, imported goods and services, distribution, and credit are all increasing or already very high. Compared to the 23 years of surveyed total business costs between 1998 and 2020, each of the past four quarters is a record breaker.

In a nation rich in natural resources, not having the levers necessary to use this advantage to support the Scottish economy, severely limits what steps the Scottish Government can take to support households and businesses.

First Minister Nicola Sturgeon said:

“While we will continue to take all actions available to us within devolved responsibilities and budgets – the Scottish Government is investing almost £3 billion this year in a range of measures which will help address the cost of living pressures – it is a statement of fact that many of the levers which would make the biggest difference lie with the UK Government.

“It is also the case that only the UK Government can access and make available resources on the scale required. Therefore, actions by devolved governments alone – though important  – will not be enough to meet the unprecedented challenges we face.  

“Action is needed now to address significant gaps in help for households, in particular those on low incomes, who are increasingly vulnerable to the impact of rising household costs.

“However, it is also vital, given further increases to energy bills due to be announced later this month, that a substantial plan be developed now to avert and mitigate what will otherwise be a crisis of unprecedented proportions – a crisis in which many people will be unable to feed themselves and their families or heat their homes.   

“While few will escape some impact of the cost of living crisis, these impacts are not being experienced evenly. That is why the focus must be on providing targeted support to those most adversely impacted, rather than an irresponsible reduction in broad-based taxes which will benefit the relatively better off over those most in need.

“The current crisis requires clear, focused and determined leadership and co-operation to develop and deliver – at pace – a package of interventions to protect those most impacted.”

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Fiona Grahame

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