‘Help is out there’ as north and north-east households count added £36million to cost of rising prices

By Erikka Askeland

June 22 2022, 5:00 pm

Households across the north and north-east face paying £36.4 million more on energy bills as just one aspect of rising inflation

Hard hit families have been urged to seek help as new figures show the cost of living crisis will worsen over coming months.

Household energy bills face another increase to cover the costs of the suppliers which went bust in the last year, while reports have warned the average annual shopping bill will increase by £380 on average in 2022.

Cost of failure

The energy regulator Ofgem has warned that households will be forced to pay an extra £94 each to pay for the cost of customers transfering to new energy suppliers that collapsed as energy prices rose.

Household bills are not just creeping up but rocketing amid rampant inflation.

Analysis by the Press and Journal has revealed this is a total extra cost of at least £36.4 million for households across the north and north east.

The extra costs come as rises in food price rises and record high petrol prices meant inflation for the month of May rose 9.1% – a 40-year high.

What is inflation?

Last week the Press and Journal reported that the diesel price at a forecourt in Aberdeen hit £2 per litre following warnings about rising fuel costs.

A study by Nationwide indicates that 85% of people are concerned about the rising cost of living.

Meanwhile, the latest data from Kantar has revealed that grocery price inflation jumped to 8.3% over the four weeks to June 12 to its highest level since April 2009.

The soaring increases in the cost of food and groceries means the average annual shopping bill is now predicted to increase by £380 to £4,960 in 2022 – up by more than another £100 since April alone, Kantar said.

Inflation at 40-year high

The rate of consumer prices index (CPI) inflation rose from 9% in April to 9.1% in May, the Office for National Statistics (ONS) said Wednesday.

The increase matches what analysts had expected and pushes the measure to its highest since early 1982, according to ONS estimates.

In summer months lower demand should mean lower cost - but but this year. — In summer months lower demand should mean lower cost – but but this year. Photo: Andrew Matthews/PA Wire

Scottish Friendly savings specialist, Kevin Brown said costs were “still yet to peak” – this is despite the usual trend for fuel costs to fall as demand slumps in warmer months.

He warned home energy bills will rise an average of £3,000 a year for a typical household.

This is on top of the extra £94 each due to energy company failures.

Energy costs not falling in summer

“One of the biggest drivers of inflation continues to be energy price rises,” he said.

“This is counterintuitive because our energy costs are supposed to fall over the summer months as households turn the heating down, but that is not to be this year.

“Indeed, the latest predictions are pointing to another 50% rise in the price cap this Autumn, taking energy bills over an astonishing £3,000 a year for a typical household. The cap, remember, was still at just £1,277 in March.”

He also ruled out government concerns that demand for bigger pay rises to would keep inflation high.

“Talk of a wage-price spiral seems a little optimistic at this point considering wages are falling 2.3% in real terms,” he said.

“Households are finding the situation more and more difficult to manage.

“The difference between private and public sector earnings is even more considerable with public sector pay falling 7.6% vs 1.1% for private sector.

If you're struggling to make ends meet in the cost-of-living crisis, then check if you are entitled to any extra support. — If you’re struggling to make ends meet in the cost-of-living crisis, then check if you are entitled to any extra support.

Colin Mathieson, spokesman for Advice Direct Scotland, urged people to seek help in cutting bills and making savings.

Need help with fuel or food bills? Start here

“These latest figures will raise concerns about further rising costs in the months ahead.
“With food inflation soaring and energy bills increasing sharply, it is a challenging time for many households across Scotland.

“We urge everyone not to struggle alone – help is out there.

“At Advice Direct Scotland, we have qualified advisers who can provide free, impartial and practical advice on money worries, including energy bills and debt, and help Scots ensure they are receiving all the benefits or financial assistance they are entitled to.”

Liberal Democrats in Scotland called for the government to ease the crisis with a cut in VAT.

Liberal Democrat MP Christine Jardine. Photo Aaron Chown/PA Wire

LibDem treasury spokesperson Christine Jardine said: “Rishi Sunak is standing by while millions of people suffer from eye-watering levels of inflation- he either hasn’t got any sense or any heart not to intervene.

“This Chancellor has hiked taxes time and time again, refusing to slash them to help with the cost of living emergency. Even when we know slashing VAT is a sure-fire way to help families while keeping inflation under control.

“Instead, the Chancellor, his Prime Minister and his colleagues continue to sit on their hands while the country suffers, they are not fit for purpose.”