Cost of living rising faster for poorest

Since September last year, the average low-income household has faced price increases of 4.2% on its typical basket of goods purchased, compared to 3.2% for the average high-income household.

Those in partial ownership or social housing fared worst, with prices rising by 4.8%, by far the highest among 12 socio-economic groups measured by the States.

The harsher effect of inflation on poorer households over the past year was revealed in the States’ latest household cost index, which calculates price changes experienced by different sectors of the population.

Employment & Social Security member Jayne Ozanne said yesterday that she was pressing for future changes to income support rates to be based on the household cost index rather than more general inflation figures, and the committee is understood to be looking into the issue.

‘It matters, as it is these less affluent households that are bearing the brunt of the cost of living crisis in ways that are often unseen and unnoticed in Guernsey,’ said Deputy Ozanne.

‘According to the latest inflation bulletin from the States, the poor continue to get poorer, and I am informed that local food bank usage is through the roof, particularly among young families and pensioners.

‘Furthermore, the housing crisis is hitting those who are just above income support levels incredibly hard, which is borne out by this group having the highest rate of inflation.’

Any changes to benefit uprating policies would be too late to alleviate the higher inflationary pressure felt by poorer households in recent months, as income support rates for 2026 are expected to be agreed by the States this week in line with the general rate of inflation rather than the higher household cost index.

The best short-term action Deputy Ozanne believes the States could take would be to cut fuel duty in real terms. She has confirmed that she will press ahead with an amendment to do that at tomorrow’s Budget meeting, despite criticism from Policy & Resources president Lindsay de Sausmarez that such a move would help better-off households most.

Deputy Ozanne argued that limiting the increase in fuel duty to 2.3% instead of P&R’s proposed 4.3% would immediately help families who were more likely to drive cheaper and less efficient petrol cars.

‘It is important we have a fiscal policy that is fair and equitable rather than one that continues to bake in a bias towards richer households,’ she said.