Plaid Cymru’s five point plan to tackle the Cost-of-Living Crisis

Surging debt and the rapid and cumulative rise in the cost of living may soon overtake Covid as the biggest crisis we face over the coming year, plunging many more into poverty and mental ill-health.

Rising cost of living, increasing energy costs and stagnating wages are all in the maelstrom of what’s being called the ‘perfect storm’. Nearly 40% of households in Wales are currently unable to afford anything but the essentials. With sky rocketing energy costs and tax hikes approaching in the spring, the average household is expected to have additional costs of £1,200 this year, and this will disproportionately hit those who are already struggling the most.

Of all the nations in the UK, this will hit Wales the hardest because we have the highest level of relative income poverty in the UK. This means that any increase in the costs of living will have will have significant effect on Welsh families, and of course, our children.

The topic is vast and the impact has already reached too many households in Wales, but there’s still a way out of this, if the governments of Wales and Westminster heed our calls.

There are five key areas that need immediate action from government:

1. Helping people with their energy bills

The Winter Fuel Support payment will have provided much needed support for many Welsh homes, but when the biggest rise in energy prices is due in April, this scheme needs to be expanded into Spring.

At the same time, UK Government should impose a one-off windfall tax on energy companies. It is not right that these companies are massive profits while millions live in fuel poverty and struggle to heat their home.

2. Supporting children and young people

It is unfair that Education Maintenance Allowance (EMA) payments have remained at £30 for so long, especially as inflation is expected to reach a 7% peak come the Spring. EMA payments should be increased to £45 in the first instance.

As incomes are stagnating, and in many cases falling, parents must be given the opportunity and the flexibility to work as and when they wish to. This will also help with the disproportionate effect that the cost-of-living crisis is having on women.

Accelerating the roll out of Free School Meals in primary schools should be a priority for Welsh Government, and they must look to increase the current allowance that is provided to secondary school pupils and ensure it keeps up with inflation.

3. Cancelling debt

Our public bodies should not be driving people into more debt, and yet council tax arrears is one of the biggest reasons for household debt. This has only increased since the start of the pandemic, and for this reason, Welsh Government must work with local authorities to clear the build-up of council tax arrears.

Similarly, Welsh Government must work with schools to cancel school meal debt.

4. Help with housing

Housing costs and housing services are the main factors driving the huge increases in inflation in the UK. The UK Government should top up Discretionary Housing Payments to ensure that this keeps up with inflation and ensure that this isn’t a reason for people to fall behind on housing payments. If they are not willing to do this, Welsh Government should step in and provide greater assistance – one example is via the Discretionary Assistance Fund.

As the cost-of-living crisis continues, Welsh Government should extent the Tenancy Hardship Grant to ensure tenants who are having difficulty with paying rent or who already may be in rent arrears, are not left to struggle alone. At the same time, the Welsh Government should cap social housing rent increases to ensure the most vulnerable won't face further rises housing costs.

5. Reversing cut to Universal Credit

Unlike other aspects of the cost of living crisis, the hardship caused by the cut to Universal Credit has been actively and directly brought on by the UK Government. According to a leading thinktank, a higher proportion of families in Wales were affected by the cut to universal credit than the UK average. The UK government should reverse the cut and the Welsh Government must urgently pursue the devolution of welfare in order to be able to have the powers to tackle poverty in Wales.