Vulnerable families face 'catastrophe on vast scale' if governments do not take action on inflation rate increase

Millions of people in the UK face a “winter of despair”, with one in four unable to afford their energy bills in October based on existing forecasts, it has been warned.

Advisory service Citizens Advice issued the warning, saying the 24 per cent of people who will not be able to afford to pay for their energy is double the number already in the red ahead of the price cap rise.

It comes as the UK inflation rate surged to 10.1 per cent – the highest in more than 40 years – as calls were issued for both the UK and Scottish governments to act while households and businesses face “immense pressure”..

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Higher than the rate analysts were predicting, the Office for National Statistics (ONS) announced the double-digit inflation, with the size of the spike attributed largely to food prices and staples including toilet rolls and toothbrushes.

There are calls for both the UK and Scottish Governments to act while households and businesses face “immense pressure” (Photo by DANIEL LEAL/AFP via Getty Images).
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Food and non-alcoholic beverages prices increased by 12.7 per cent, the ONS said – a rise from 9.8 per cent the month before and the highest since August 2008.

The Bank of England has predicted inflation could hit more than 13 per cent by the end of the year, driven by rising energy prices.

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The last time price rises were in double digits was February 1982, and the continued economic pressures are leaving many families and businesses fearful about what the future may hold.

An emergency cost-of-living summit has been called by the First Minister with energy companies, organisations and charities during, what Ms Sturgeon described as, a "very serious situation”.

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The summit will be held later this month to discuss how advice and support for people struggling with energy bills can be improved.

The Institute of Fiscal Studies has warned the poorest fifth of households could face inflation of 18 per cent, because they spend a larger proportion of their budgets on energy and food.

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Poverty Alliance said it was “completely unjust” households on the lowest income are those hit the hardest as Scotland’s anti-poverty network called for politicians to “urgently increase” emergency support to households.

Peter Kelly, director of the Poverty Alliance, said: "We know from discussions with our member organisations that the scale and depth of this crisis can't be exaggerated. Decades of falling wage values and cuts to social security have left people under constant pressure to make ends meet. Now they are struggling just to keep their heads above water.

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"Our politicians have a moral responsibility to protect people. They need to urgently increase emergency support to households, and start working to restore social security and redesign our economy so that people get the incomes they need."

The Joseph Rowntree Foundation (JRF) and 70 other charities have called on the UK’s next prime minister to pledge the £1,200 offered in core support to households on means-tested benefits should be “at least doubled”.

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Rebecca McDonal­­d, chief economist at JRF, said: "The next few months will be profoundly more difficult for low-income families almost certainly experiencing a higher degree of inflation themselves.

“Planning for a substantial support package, at least double what’s been offered, needs to start immediately. Without one, vulnerable people will face a catastrophe on a vast scale when winter sets in.”

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The UK Government said it was helping with the cost of living via a £37 billion support package, with further payments for those on the lowest incomes, pensioners and the disabled, and £400 off energy bills for each household in coming months.

Chancellor Nadhim Zahawi said there were “no easy solutions”, adding: “I understand that times are tough, and people are worried about increases in prices that countries around the world are facing.”

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Businesses are also in need of “immediate support” from government, according to the Scottish Chamber of Commerce, as it warn Scottish firms may not see the end of this year due to “immense pressure” from rising costs.

Dr Liz Cameron CBE, chief executive of the Scottish Chambers of Commerce, said: “The call from business is clear – an emergency UK Budget and a focus on bringing the cost of energy down for firms by lowering VAT on energy bills and an energy price cap for SMEs.”

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A total of 75 per cent of Scottish firms are expected to raise their prices in coming months, with rising fuel, energy, labour costs, and raw materials having the greatest impact.

Dr Cameron added: “The last thing businesses want to do is to put up prices for customers, with consumer spending likely to be suppressed even further as the purse strings continue to tighten.”

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Amidst these pressures, there is a concern amongst Scots no UK party is equipped to deal with the crisis.

A majority of people in Scotland think both Labour and the Tories are failing on the cost of living crisis, according to new polling.

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YouGov asked people across the UK on who they think is best to deal with the crisis between Labour and the Tories – but 55 per cent of people asked in Scotland said neither of the parties.

The SNP has called on Prime Minister Boris Johnson to recall Parliament and introduce an emergency budget that freezes the energy price cap, scraps VAT on fuel and delivers “meaningful financial support for households”.

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Alison Thewliss MP, SNP shadow chancellor, said: "With every day the UK Government fails to act, it is demonstrating the need for Scotland to become an independent country, with the full powers and levers to support families and escape the damage of Westminster control."

The Scottish Government has said it has allocated almost £3bn this financial year to help households face the increased cost of living.

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However, opposition parties have said there are more measures the Scottish Government can take.

Scottish Labour said the SNP Government had “failed to produce concrete actions using the powers available” as the party called for emergency legislation to be introduced.

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The plan includes calls for a winter evictions ban, a rent freeze, cancelling school meal debt, halving rail fares and capping the cost of bus journeys.

Scottish Labour leader Anas Sarwar said: “We’ve seen silence from Boris Johnson and nothing of value from those squabbling to replace him.

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“We’ve also seen little of substance from the SNP, ignoring the significant powers they have to act now.”

The Scottish Liberal Democrats have called on the Scottish Government to confirm inflation figures will not be used as the basis for record rail fare rises.

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The contract for the new publicly-owned ScotRail states that every January regulated fares can increase with the rate of inflation based on the figure for the previous July.

Party leader Alex Cole-Hamilton said: "Families and rail users will never forgive both of their governments for abandoning them in the middle of a cost-of-living catastrophe.”

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