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27 October 2021

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British government need to grasp the scale of costs of living crisis — Archibald

Boris Johnson and his Chancellor need to put in place adequate funding in this budget so Executive Ministers have the resources to design supports for struggling families and businesses.

Many families are facing a cost of living crisis this winter. 

This time last year economists and analysts were talking about inflation being ‘worryingly low’, 12 months on the opposite is the case and it's really starting to bite as prices rise.

Stark increases are being seen in the cost of energy. Heating our homes is going to cost a lot more this winter and electricity prices are also rising significantly. Meanwhile the cost of food and prices at the petrol pumps are also rising.  

This comes at the same time as the furlough scheme has ended, the British government has just slashed Universal Credit, and from April, National Insurance will increase.  

For working families this creates living costs that many will struggle to meet. 

When it comes to wholesale energy costs, the causes are beyond the control of local policymakers – low levels of wind across Europe combined with geopolitical disputes and faults in power-stations have created demand that has led to prices soaring. 

Financial intervention is needed from the British government to tackle the crisis in cost of living.  

So far what it has announced has been woefully inadequate - a £500 million Household Support Fund which was more of a distraction at the Tory party conference to deflect from the Universal Credit cut than a meaningful intervention to support struggling families. This is expected to amount to just £13 million for the Executive but is still to be confirmed.  

For comparison last year, then Communities Minister Carál Ní Chuilín allocated £44.3 million to put in place the £200 one-off Covid-19 Heating Payment with Covid funding, and this only went to those on certain higher rate disability benefits and older people in receipt of Pension Credit.  

However, the cost of wholesale gas is about five times higher than it was this time last year and looks set to stay up at this level if not higher for the foreseeable future. Oil and coal prices are also considerably up.

The increases we are seeing won’t just hit those on low incomes, middle-income families will struggle with the increases and the further increases that are coming.  

There is a higher proportion of households in fuel poverty in the north, lower average wages and lower levels of savings than in regions across Britain – this amounts to a real crisis for workers and families here.

However, the energy cost crisis is not just hitting households but also businesses.  They are struggling to absorb costs with high-profile closures already taking place in England.  Further rises will put businesses under pressure, jobs at risk and means price rises will be passed on to families. 

The British government needs to recognise the scale of the cost of living crisis and the particular impact for workers, families and businesses in the north.  

Boris Johnson and his Chancellor need to put in place adequate funding in this budget so Executive Ministers have the resources to design supports for struggling families and businesses.

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