Devolved finance ministers ask new Chancellor to act on cost of living

FINANCE ministers from Scotland, Wales and Northern Ireland have joined forces to call on Nadhim Zahawi to help more with the cost-of-living crisis.

In a letter welcoming the new Chancellor to his post, Kate Forbes and her counterpart in Belfast, Conor Murphy, and in Cardiff, Rebecca Evans, said that further action was needed to support households and businesses ahead of October’s hike in the energy price cap.

They also asked Mr Zahawi for an increase in devolved budgets to help pay for a “fair approach” to public sector pay. 

The UK Government has recently announced a Cost of Living Payment of £650, payable in two separate lump sums of £326 and £324, for households receiving certain benefits or tax credits, to help with the cost of living.

If receiving tax credits only, they are eligible for each payment.

The devolved ministers’ letter says: “Governments continue to do all we can to maximise the support for households with the cost of living crisis.

“However, many of  the levers which can make the biggest difference sit with the UK Government.

“Whilst we recognise the measures taken by the UK Government to date have relieved some of the pressure on households, further action is required to address significant gaps in support for vulnerable households, families, businesses and the delivery of services.

“The prospect that the autumn energy price cap increase will be more than anticipated will only add to the pressures they are facing. The UK Government must also take more concerted steps to ensure more sustainable energy prices in the longer-term.

“The cost of living crisis is not evenly distributed, and the focus should be on providing targeted support to those most adversely impacted, rather than reducing broad-based taxes.

“Neither should tax cuts result in tighter controls on spending which will impact on delivery of public services which are already facing immense pressures.”

On devolved budgets, the three ministers say: “Due to inflationary pressures, our budgets for the next three years are now worth considerably less than when we formulated our spending plans last year.

“In addition to the public pay bill and the rising public energy costs, there are other significant emerging pressures for our services, including education and enabling NHS recovery and reform. Our budgets should be uplifted in line with these pressures.

“The NHS turns 75 next year and this presents a much needed opportunity to boost funding for the service which so many of us rely on. We would urge you to consider these issues and take the steps needed to address these significant concerns.”

Responding, a Treasury spokesperson said:“We understand that people are struggling with rising prices which is why we have acted to protect the 8 million most vulnerable British families through at least £1,200 of direct payments this year with additional support for pensioners and those claiming disability benefits.

“Through our £37 billion support package we are also saving the typical employee over £330 a year through this month’s National Insurance cut, allowing people on Universal Credit to keep £1,000 more of what they earn and cutting fuel duty by 5p – the biggest ever cut to fuel duty rates which saves a typical family £100.”

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