The most vulnerable people in Wales face serious hardship as short-term cost-of-living support comes to an end. The Senedd Equality and Social Justice Committee report - Unsustainable: debt fuelled by the rising cost of living - published today, highlights the need for a long-term, preventative approach.
The report’s 14 recommendations for the Welsh Government include the scandal of pre-payment meters, as well as food hunger and debt.
Jenny Rathbone MS, Chair of the Senedd’s Equality and Social Justice Committee says:
“The cost of living crisis is having a devastating impact on the health and wealth of our nation and too many households are facing unacceptable hardships beyond their control.
“Prices of food, heating and other basic essentials have soared and Governments have been playing catch-up in their response to the scale of these challenges. Interventions have only softened the blow.
“The most important levers on economic policy: tax and spend, and the benefits system are under the control of the UK Government in London.
“This report looks at the Welsh Government’s response, described as a lifeline by many. There are concerns about what happens next as support tapers off and households face permanently higher prices.”
In its inquiry, the Committee heard shocking evidence about the impact of the crisis on the most vulnerable people in Wales.
Citizens Advice Cymru says hundreds of thousands of people across Wales currently don’t have enough money to live on. It supported nearly 40,000 people with debt advice in 2022 and the numbers seeking advice on energy debt reached record levels. Almost half their clients (48%) are now living on a negative budget, up from 36% in early 2019.
13% of people were in arrears on at least one household bill and 28% had borrowed money to cover everyday costs, according to a study by The Bevan Foundation.
A series of focus groups gathered the views of individuals with lived experience of not having enough money to cover food and other basic household expenses. It also exposed the impact of the cost-of-living crisis on contributors’ mental and physical well-being.
One participant asked:
“What else do you want from us? At what point do you just give up?. We’re not living, we’re just existing.”
The evidence shows that single parents, renters, carers, people with disabilities and ethnic minorities are being disproportionately impacted. People higher up the income scale are also experiencing hardship with many working households in full-time employment turning to charities for support.
Both Welsh and UK governments have responded to the cost of living crisis with significant support packages. However, the Committee concluded that the response risks being “a sticking plaster” when what is needed is a more sustainable, long-term approach to reducing poverty and hardship.
It echoes a similar conclusion in the Committee’s report on the Draft Budget 2023-24 which called for the creation of a cost of living plan. The Committee reiterated that the Welsh Government should develop a long-term action plan, which prioritises preventative measures and spending aimed at addressing the causes rather the symptoms of poverty.
The report also calls for Welsh Government to:
- Closely monitor the impact of rising prices on different groups and continue to provide support to the most vulnerable households
- Take a sustainable approach to preventing poverty by investing in skills, green energy and food security
- Tackle food poverty by supporting local services that provide healthy meals and teach cooking skills in communities
- Urgently clarify plans for improving energy efficiency of homes.
- Set out what discussions it has had with Ofgem to raise its concerns about the resumption of forced installation of pre-payment meters
- Work with local authorities to help households in receipt of one Welsh benefit to automatically qualify for other benefits they are entitled to.
