WALES FEELING THE PINCH MORE THAN MOST - WILLIAMS

2.59.43pm BST (GMT +0100) Thu 23rd Oct 2008

Liberal Democrat Shadow Secretary of State for Wales Roger Williams MP has today called on the Government to target help towards areas that are particularly suffering from the economic downturn, as figures show that Wales looks set to be hit hardest by rising inflation, and has called for action on energy bills.

Figures released last week by the Institute of Fiscal Studies showed that because elderly and poorer households spend proportionally more on food and fuel, they face a real rate of inflation much higher than the average. Households in the poorest 10% of the population had an average inflation rate of 7.9% in September compared to rate of 5.1% for those in the richest 10%. The average across all households was 6.7%.

Single male pensioners face a real inflation rate of 9.2% while for single female pensioners this is 9.1%, and for pensioner couples is 7.7%. Wales has the highest proportion of pensioners of any nation in the UK at 21%. The UK proportion is 19%. Wales's GVA (Gross Value Added per head) was last year revealed to be 23% below the UK average.

Wales has also been hit hard by rises in the price of energy and petrol, with Energywatch revealing earlier this year that consumers in Wales were paying 18% more for electricity.

Commenting, Roger Williams said:

"These figures show that poorer people and pensioners are facing higher levels of inflation, and there is a real need for the Government to target assistance to areas of deprivation to help people pay their bills.

"Wales is poorer than many parts of the UK, and has more pensioners than any other part of the UK, so we will be among the worst affected.

"We pay more anyway for electricity and other fuel despite being worse off, and due to our unique position of deprivation and large rural and remote areas, the bleak economic picture looks particularly worrying in Wales.

Mr Williams added:

"The Government need to take our advice and help vulnerable people pay their fuel bills by compelling the energy companies to use the windfall profits they gained from the emissions trading scheme.

"Even though the wholesale price of gas is falling this is not being passed on to the consumer. The energy companies say they buy in advance; they may well do, but if the market was truly competitive they would be falling over each other to give their customers better deals when they are able to take advantage of cheaper gas.

"I agree with the former Chief Executive of Energywatch, who said it was 'scandalous' that a Competition Commission Enquiry has not been set up - the Business Secretary is able to order one. The Government need to take action on two fronts. In the short-term they must force energy companies to cut their bills, but in the long-term they must restore integrity to the market."

Notes:

Institute of Fiscal Studies figures on household inflation:

Table 1. Average annual inflation rate for different household groups, September 2008, annual averages for 2006 and 2007, and longer-term averages

Group

September 2008

2007 average

2006 average

Average 1977-2008

Average

1991-2008

All households

6.7%

4.5%

3.8%

5.9%

3.2%

Age 18-29

5.6%

4.4%

3.4%

5.9%

3.0%

Age 30-39

5.5%

5.3%

3.6%

6.0%

3.1%

Age 40-49

5.7%

5.1%

3.6%

5.9%

3.2%

Age 50-59

6.5%

4.5%

3.6%

5.8%

3.2%

Age 60-69

7.4%

3.7%

3.7%

5.7%

3.2%

Age 70-79

8.4%

3.7%

4.2%

5.8%

3.3%

Age 80+

9.8%

4.1%

4.9%

5.9%

3.4%

Poorest 10% (income decile 1)

7.9%

3.9%

4.0%

5.7%

3.0%

Decile 2

8.5%

4.0%

4.3%

5.7%

3.1%

Decile 3

7.7%

4.1%

4.0%

5.9%

3.2%

Decile 4

7.3%

4.2%

3.9%

5.8%

3.2%

Decile 5

6.8%

4.4%

3.7%

5.8%

3.2%

Decile 6

6.6%

4.5%

3.7%

5.9%

3.2%

Decile 7

6.1%

4.7%

3.6%

5.9%

3.2%

Decile 8

5.9%

4.9%

3.6%

5.9%

3.2%

Decile 9

5.3%

4.9%

3.4%

6.0%

3.2%

Richest 10% (decile 10)

5.1%

5.2%

3.4%

6.1%

3.2%

Local Authority renter

7.9%

3.5%

3.9%

5.7%

3.1%

Private renter

6.9%

3.3%

3.4%

5.8%

3.2%

Owned with mortgage

5.3%

6.2%

3.8%

6.1%

3.2%

Owned outright

8.0%

3.4%

3.8%

5.6%

3.2%

Single male (non-pensioner)

6.3%

5.1%

4.0%

6.3%

3.4%

Single female (non-pensioner)

5.9%

5.1%

3.8%

6.0%

3.3%

Lone parent

6.9%

4.6%

3.8%

5.6%

2.9%

Couple, no children

5.7%

4.7%

3.5%

5.9%

3.2%

Couple, with children

5.6%

5.3%

3.6%

5.9%

3.1%

Single male (pensioner)

9.2%

3.9%

4.9%

6.1%

3.5%

Single female (pensioner)

9.1%

4.0%

4.7%

5.9%

3.3%

Pensioner couple

7.7%

3.6%

3.7%

5.7%

3.2%

Other type, with children

5.9%

4.2%

3.2%

5.6%

3.0%

Other type, no children

6.6%

3.8%

3.3%

5.7%

3.1%

Poorest 20%, aged under 35

7.4%

3.7%

3.6%

5.6%

2.9%

Poorest 20%, aged over 65

9.4%

4.0%

4.6%

5.8%

3.2%

Richest 20%, aged under 35

4.4%

5.8%

3.5%

6.2%

3.1%

Richest 20%, aged over 65

6.1%

3.6%

3.2%

5.8%

3.2%

http://www.ifs.org.uk/pr/households_inflation.pdf

Percentage of Pensioners as Proportion of Population (Office of National Statistics, Mid 2007 Population Estimates)

Number of pensioners (000s)

Percentage of population

Wales

626.7

21.03%

England

9644.5

18.88%

Scotland

1000.7

19.45%

Northern Ireland

289.7

16.47%

UK

11561.5

18.96%

http://www.statistics.gov.uk/statbase/Product.asp?vlnk=15106

Figures on GVA available here:

http://www.statistics.gov.uk/pdfdir/gva1207.pdf