Rising living costs ‘will be catastrophic for some’

WARNINGS about the ‘catastrophic’ impact of rising living costs and the potential introduction of GST pushing more families on to benefits have been sounded.

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Sue Le Friec, co-ordinator of the Guernsey Welfare Service, said that many people were already worried about turning on their heating because of the costs – with a 16.9% price hike for Guernsey Gas customers from mid-October announced last week.

But they were also worried about food bills and now the possibility of GST, she said.

Age Concern has said it will be looking at increasing its annual winter fuel grant.

‘A number of people already find their heating costs, particularly gas, to be high and tell us that they are fearful of putting the heating on,’ said Sue Le Friec of the Welfare Service.

‘A 16.9% price hike is going to be catastrophic for some and we hope that ministers will act quickly to put reassurances in place.’

Environment & Infrastructure Committee president Lindsay de Sausmarez has said she was already in dialogue with Employment & Social Security and Policy & Resources to provide support for those who could have difficulty with gas bills once the price rises take effect.

Age Concern chairman David Inglis said that between 2020 and 2021 there were more than 100 applicants for the heating grant provided by the charity, with some people applying twice.

‘Due to rising fuel prices we are looking at increasing the value of the grant again this year,’ he said.

But fuel costs were not the only concern among pensioners, with the proposed goods and services tax or increase in income tax set to have an impact, he said.

Pensioners were the most likely people in the island to own their own homes.

‘Although this gives the impression of security and financial stability, many of them find themselves “asset rich but cash poor”,’ Mr Inglis said.

They had to deal with the considerable costs of owing a property, such as TRP, waste charges, water, electricity, heating as well as maintenance and unexpected expenses.

This could see such things as having a cooked meal pushed ‘a long way down the list’.

‘There is a very strong chance the rising cost of living and home ownership, with added stresses and strains of wondering where they will find the money to keep up with the rises, is affecting more than just people’s wellbeing,’ said Mr Inglis.

‘We also want people to look after themselves so they stay fit and healthy.

‘This is even more of a challenge on a tight budget and there could easily be increasing demands on other public services if that health balance tips in an unhelpful direction.’

Mrs Le Friec said the proposed goods and service tax would also add to the impact on many low and middle income families.

‘In the past few weeks, many clients who have visited us for support have raised their concerns over its introduction,’ she said.

It was difficult to say how any mitigating measures might work since they have not yet been announced, but she was concerned than it would push households that are just about coping without benefits to become reliant on them.

‘The accompanying intrusion, scrutiny and loss of independence which that will bring is a very sad situation to contemplate.’

She also feared the impact on people’s health from these rises, plus general price increases on everyday items in supermarkets due to inflation.

‘This can’t continue without having an extremely negative impact on people’s health and wellbeing.’

Former States economist Andy Sloan predicted a difficult time ahead. ‘It looks like it might well be an uncomfortable couple of years,’ he said.

Islanders had become so used to minimal inflation that they would find it hard to deal with big price jumps, Dr Sloan said.

‘I’d be surprised to see wages react quickly, so its likely to be a tough time for many wage earners.’

He said the impact could probably felt more keenly than the squeeze after the financial crisis. ‘That time around general wages flat-lined in real terms, the cost of living increased only marginally, and frankly it was tax bills that rose.

‘This time around I wouldn’t be surprised to seeprices rise quite rapidly across everyday goods and services.’

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