Action to tackle the cost-of-living crisis is “absolutely imperative”, the Scottish Finance Secretary has told Rishi Sunak.
Kate Forbes wrote to the Chancellor, calling for him to use £30bn of funding to further assist those struggling to make ends meet amid rising prices.
Her letter comes as speculation mounts that the UK Government will shortly unveil a multi-billion pound plan of action, as ministers seek to draw a line under the ‘partygate’ row and focus on the squeeze in living standards caused by soaring inflation.
Forbes suggested that £1,000 be given to those on the lowest incomes, with this to be delivered directly as cash support at periods across the financial year.
She told Sunak: “Providing money directly, without a link to specific bills, would provide households with the means to manage the cost-of-living crisis however it is affecting them the most, whether it is on food, transport or energy bills.”
She also called on the UK Government to increase benefit payments, suggesting ministers “permanently up-rate all social security benefits as if they had been increased by 10% in April to match the current level of inflation”
In addition Forbes wrote that there should be a further £25 uplift to Universal Credit, and for the National Living Wage to be increased to £9.90.
To help with mounting fuel costs, she called for the temporary suspension of VAT on household energy bills, saying this would save the average household around £100 a year.
Forbes further called for the £350 energy rebate scheme to be extended to small and medium sized firms, and for standing charges to be scrapped for those on pre-payment meters.
“This package can be comfortably implemented within the £30bn fiscal headroom available to you, even before allowing for any additional revenue from a windfall tax.”
The Finance Secretary also said that “in the midst of such a crisis it would be unconscionable” for the Chancellor to “hold this funding in reserve to fund tax cuts in future years”.
Her comments came as she sought to highlight the “pressing need to act on the cost-of-living crisis”.
Forbes said: “With inflation reaching a 40-year high of 9% and forecast to rise higher; Brexit increasing food prices by over 6%, and the news that the energy price cap is set to rise to £2,800 a year in October, it is absolutely imperative that further action is taken to relieve the acute pressures being felt by households and businesses.
“The Scottish Government has already taken action and will continue to do everything we can to ensure people, communities and businesses are supported as far as possible.
“But, given the restrictions of devolution, only the UK Government has the economic, regulatory levers and fiscal headroom required to address this urgent crisis.”
A Treasury spokesperson said: “We understand that people are struggling with rising prices, which is why we’ve provided £22bn of support to date.
“The Chancellor was clear that as the situation evolves, so will our response, with the most vulnerable being his number one priority.”
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