€
£
£
Living emergency
A
Ruth Sanderson considers the rising cost of living and how we should respond.
s temperatures rise and the first heat of spring starts to warm us, a wave of relief passes over. Not only has the winter passed, but we can turn the radiators off without having to put a coat on in the house. My family and I moved to the north east of Scotland a couple of years ago, so turning off the heat before its time feels pretty drastic! However, we recently received the same letter as other households in Scotland, England and Wales saying that our heating and electricity bills were set to rise by 54%. The start of April saw a rise in the energy price cap allowed to suppliers – i.e. the maximum companies can charge for gas and electricty. However, the cap does not feature in Northern Ireland – it has a separate energy market with its own system of price regulation. Likewise the government in the Republic of Ireland has said it is not in a position to place a cap on rising energy prices as it imports so much of it from other countries. Those of us living in Great Britain get rising wholesale costs passed on to us in two huge lumps (April and October) whereas in Ireland and Northern Ireland, fluctuating costs can be passed on bit by bit throughout the year, making things even more unpredictable. Regardless of where you live, it means everyone gets the pain of rising prices,
32
Herald May 2022
albeit at slightly staggered times. It’s estimated that the average home will face paying an extra £700 per year, with that set to rise as we come into the winter. The reason for this stratospheric rise has been driven largely by a surge in natural gas prices due to increased demand for gas from China and Asia, and a cold winter in Europe in 2020/21. This meant that stored gas supplies were used, pushing prices up. Ironically, it became a perfect storm when a lack of wind over the summer then hit renewable sources of energy, increasing demand for gas. However, if this wasn’t enough, prices have risen even higher following Russia’s invasion of Ukraine, with oil prices climbing to record highs. It’s feared that the energy price cap could soar again in October as a result of the war, as natural resources climb in value. It isn’t just heat. With the rising cost of oil comes the pain of filling up a tank of petrol for much more than we are accustomed to. A cut in VAT during the pandemic has been readjusted to its 20%
We are victims of a global economy and events which happen thousands of miles away.
pre-pandemic level, which means almost everything will cost a little bit more (or a lot more, depending on what you’re buying). Brexit has caused import and export costs to rise, meaning food prices have gone up. The supply chain costs more to run – don’t forget that most of what we consume has to be driven in lorries to us, which incur raised petrol charges, which in turn we pay for in the price of our food and goods. We are victims of a global economy and events which happen thousands of miles away. We are basically sitting ducks, paying for cold winters and poor harvests, wars and expansionism. These factors end up in our colder homes and smaller shopping baskets. Has anyone else been having the ‘where can we cut back?’ conversation at home recently? We have. It’s my least favourite topic of discussion, albeit a necessary one. These conversations change with the stage of life you are at, the job you have, the house you live in, the amount of children who live with you. Yet I can’t help but feel that everyone has been talking about the same thing lately. These discussions have morphed from “Do we need to go on holiday this year?” to “How often do we really need to drive the car?” This time last year, even with lockdown, the measures we were considering (Could we put the heating
