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People of Wales facing a ‘cost of living catastrophe’ as fuel and food bills rise says Mark Drakeford

11 Jan 2022 4 minutes Read
Mark Drakeford picture by the Welsh Government

The First Minister has said that people in Wales are facing a “cost of living catastrophe” as fuel and food bills rise this year.

He pointed to research by the Resolution Foundation showing that 2022 was to be the “year of the squeeze” and that families were facing a £1,200 hit from higher prices while wages remained stagnant.

Mark Drakeford was asked in the Senedd by Plaid Cymru leader Adam Price whether surging debt and price rises would soon overtake Covid as the biggest crisis facing Wales.

“Many of the key levers, of course, remain at Westminster, but we’ve learnt even today, haven’t we, to place little faith in a Prime Minister who organises garden parties in the midst of a pandemic,” Adam Price said.

Mark Drakeford said that he agreed with the Plaid Cymru leader that the issue would come to “dominate” the agenda.

“The Resolution Foundation in a very detailed analysis published only a few days ago said that April will mark a cost of living catastrophe for many, many families across the United Kingdom, with bills of over £1,000 coming their way just from the fuel price rises and the changes to national insurance contributions,” he said.

“And that doesn’t take account of all the other pressures that we know are already there in family budgets, with real wages stagnant or reducing.

“And in that sense I think that Adam Price is quite right that the cost of living crisis is going to dominate the lives of many, many families across Wales, and for many families it’s begun already, Llywydd, with those thousands of families faced with a cut of £20 a week in the reduction in universal credit—a genuinely cruel decision made by a Government that knew what the impact of that decision would be in the lives of the poorest families.”

He said that the Welsh Government were taking action with a £51 million household support fund which would offer help with fuel bills to families in Wales over winter.

He also pointed to a council tax reduction scheme that he said would help 60 per cent of households in Wales.

‘Robin Hood tax’

Figures published earlier today suggested that the north and west of Wales will be amongst the worst hit in the UK by the expected rise in energy bills in April, with seven out of the 20 hardest-hit areas in the UK located in Wales.

Ceredigion, Gwynedd and Carmarthenshire are all in the top five local authorities that will see their energy bills rise by the highest amount, when a rise in the energy cap to an expected £1,865 comes into place.

The analysis by the Liberal Democrats used this expected 79% increase to work out the median bills, and found that rural areas of Wales were projected to suffer most of all.

Ceredigion faces an energy bill hike of £863, Gwynedd of £803, Carmarthenshire of £757 and Powys of £753 if the hike goes ahead. Anglesey will be hit by a £725 rise and Pembrokeshire by £708, and Denbighshire £707. All these local authorities are in the top 20 areas most affected in the UK.

Bills will rise by an average of £598 across the UK when the cap increases to £1,865. Overall bills are then expected to rise above £2,000 when the price cap is revised in the Autumn.

Speaking in the Senedd, Welsh Liberal Democrat leader Jane Dodds asked whether the First Minister could implement “a Robin Hood tax on oil and gas super profits to support families with soaring heating bills?”

Mark Drakeford said that raising such a tax was a matter for the UK Government.

“I thank her for drawing attention to the Robin Hood tax—the Tobin tax, as it was sometimes called—to which I have always, myself, been attracted; a very small tax on a very large number of transactions, which would result in a very significant additional inflow of funds into the UK Treasury, which could be used in exactly the circumstances that the Member outlined,” he said.

“So, imaginative ideas such as the Robin Hood tax and such as the windfall tax, which Joyce Watson mentioned—these are choices available to the UK Government, and they should exercise them.”

 

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