August’s view from Westminster.

Andrew Jones writes a monthly column for the Advertiser series of newspapers. Below is the August article.

Daily there seems to be increasingly serious predictions of what the fuel bill for an average household is going to be in months to come.

Let’s get straight to the nub of this. This, along with food price increases, will stretch many households and stretch some up to and beyond the limits of what they can afford.

Consumer demand is strong and bottlenecks in the supply chain mean prices rise. With fuel that is due to the recovery of demand following the global lockdowns, not matched by a corresponding increase in production. That would be significant enough, but combine that with the disruption to supplies from Russia and we have seen global wholesale costs rocket. It doesn’t matter whether you have your fuel supplied by Russia or not; prices increase.

With food, transport costs have pushed up prices but so has the supply of grain. Ukraine and Russia are global cereal producers and it is estimated that the war will push up food prices from anywhere between eight and 22 per cent.

Nowhere in Europe is immune although countries are affected by different elements of the cost of living increase and have different policy responses. In the UK we have tried to help all households but concentrate that response on the poorest. So far we have seen:

· £400 off energy bills for all households

· £650 payments for households receiving means-tested benefits with additional payments of £300 for pensioners and £150 for people receiving disability payments

· a £150 council tax rebate for households in council tax band A-D

· a 5p cut to fuel duty

· an increase in the National Insurance Contributions threshold on earnings

According to the independent Resolution Foundation these measures, combined with others such as increasing the amount of benefits people keep as they move into work, mean that over 90 per cent of the cost of the fuel increase this year will be covered for the poorest households. For all households it is around 80 per cent of the cost.

When a vital commodity has gone up threefold there is still a lot of extra money to be found but I think more support will be made available. We have to also remember that fuel is only one element of increasing prices.

So Government is taking action to deal with the sudden direct increase of fuel prices and more action is likely.

The other side of the equation is cutting demand and that is where we all come in. Demand outstripping supply is one of the reasons prices increase. We cut demand, supply is eased, price rises level out and could decline.

So we need to examine our consumption. To my mind it has always been a duty to use only the energy we need to help reduce climate change. Now I think it is more than that. Even for those who can afford the price increases reducing household energy demand is a civic and moral duty because this will help reduce prices which will help those least able to afford them. Whether it is turning off lights, switching the thermostat down a degree, having a shorter shower and other methods it is time for us to seriously reduce consumption.

There is more to this subject than can be explored in one column for the paper. The composition of the price cap, the impact of green levies, VAT, where our energy comes from are all important issues.

But the most important take-outs from this column should be that help is available, more help will be coming and that we need to cut consumption where we can for the sake not only of the environment but the least well off too.