Scottish Government left with “no choice” following funding cut
Plans to means-test Winter Fuel Payment in England and Wales will see the Scottish Government’s funding cut by up to £160 million.
Social Justice Secretary Shirley-Anne Somerville has confirmed the Scottish Government therefore has ‘no alternative’ but to replicate the decision in Scotland and restrict payments to pensioners who receive eligible benefits.
Social Justice Secretary Shirley-Anne Somerville said: “Despite all efforts to review our financial position we have been left with no choice but to follow the UK Government and restrict payments to older people who receive relevant eligible benefits.
“This is a necessary decision when faced with such a deep cut to our funding and in the most challenging financial circumstances since devolution. The reduction we are facing amounts to as much as 90% of the cost of Scotland’s replacement benefit, the Pension Age Winter Heating Payment.
“Given the UK Government’s decision to restrict payments to those in receipt of means-tested benefits, such as Pension Credit, and the implications for the Scottish Government detailed above, I have urged the Secretary of State for Work and Pensions to undertake a benefits take-up campaign for Pension Credit and to move forward with plans for a social energy tariff.
“Both of these measures will provide some further protection to energy customers in greatest need.”
Deputy First Minister Kate Forbes commented:
The UK Government’s decision to means-test the Winter Fuel Payment in England and Wales will see our funding cut by up to £160 million.
The Scottish Government has been left with no choice but to replicate the decision in Scotland.
Age Scotland: Winter Fuel Payment decision ‘brutal’ for Scottish pensioners
Age Scotland is continuing to urge the UK government to reconsider plans to scrap the winter fuel payment for pensioners who do not receive pension credit.
The charity has responded to news that, following the UK Government’s plans to means-test the Winter Fuel Payment, the Scottish Government will have no alternative but to replicate the decision in Scotland.
Age Scotland’s Policy Director, Adam Stachura, said: “It’s infuriating that huge numbers of older people will miss out on the vital Winter Fuel Payment when it is devolved to Scotland.
“We recognise the financial challenge the Scottish Government would face to make up the shortfall to keep the payment universal, but we desperately hoped there could be a more effective delivery of this payment and that it could have looked more generous than the UK Government’s new, and meagre, approach.
“At minimum, a quarter of a million pensioners in Scotland on the lowest incomes or living in fuel poverty will no longer receive this vital financial support over the winter months, while hundreds of thousands more on modest incomes are going to struggle with their energy bills even more than normal as a result.
“This brutal decision by the UK Government was made too fast, cuts too deep and its impact will be severe. It’s important that they rethink this move, as it has a huge impact on the devolution of social security and the needs of Scottish pensioners who live in some of the coldest homes in the UK.”
Visit www.age.scot/SaveWFP to sign Age Scotland’s petition to save the Winter Fuel Payment.
Increases in retail fuel margins cost drivers over £1.6bn in 2023
The Competition and Markets Authority (CMA) has published an update today on the widespread action it is taking to ensure that people can get the best possible choices and prices in the face of ongoing cost of living pressures.
New analysis highlights how the cost to drivers of weakened competition in the fuel sector persists, but competition in the groceries sector appears to be more effective in bearing down on retail margins.
Road Fuel
In its third interim monitoring update, the CMA has found that:
Retailers’ fuel margins – the difference between what a retailer pays for its fuel and what it sells at – are still significantly above historic levels.
Supermarkets’ fuel margins are roughly double what they were in 2019.
The total cost to all drivers from the increase in retail fuel margins since 2019 was over £1.6bn in 2023 alone.
Competition among fuel retailers is failing consumers, just as it was in July last year when the CMA published its road fuel market study.
When the CMA published its road fuel market study report, it recommended that a smart data driven fuel finder scheme be set up to make prices available to motorists across the UK in real time, such as through map apps and sat-navs. This will be backed up with ongoing monitoring by the CMA to hold the sector to account. This scheme could save drivers up to £4.50 each time they fill up, as it would make it easier to find cheaper fuel in their area.
The CMA is currently monitoring developments in the fuel market using information provided voluntarily by fuel retailers. It has created a temporary price data-sharing scheme, and it is positive that some major players have started to integrate this into consumer-facing products, like apps. However, the current scheme covers only 40% of fuel retail sites and is not comprehensive enough to be utilised by map apps or sat-navs to bring accurate, live information to people – and this is what would have a substantial impact on the market.
The proposed introduction of the Digital Information and Smart Data Bill by the new government could provide the legislative basis to set up a compulsory and comprehensive scheme that would change this – which the CMA would welcome.
Legislation – which is needed to establish the scheme fully – may take time to come into force. So that motorists can start to benefit from quicker, easier access to fuel prices through everyday apps sooner, the CMA encourages the government to introduce an enhanced interim voluntary scheme that is as close to the final scheme as possible.
Richard Evans, head of technical services at webuyanycar comments: “Rising motoring costs are unsurprisingly taking a toll, as our research revealed 4 in 10 drivers (40%) trying to drive less as a result of expensive fuel.
“As households unfortunately feel the pinch from rising costs across the board, there are a few things drivers can do to get the most out of their fuel. The more weight a car is carrying, the more fuel it will consume, so remove anything that isn’t needed.
“Driving habits have a huge impact on fuel consumption; making sure to accelerate gently and use the highest appropriate gear will help to use as little fuel as possible. And, keeping a car in good condition can also help to improve fuel consumption, as fuel won’t be wasted on broken parts.
“Amidst the fluctuation of fuel prices, it’s also important that drivers are aware of the cost to fill up and where they can get the best deal in their local area. Drivers can use our fuel cost calculator to estimate their weekly, monthly (and even annual) fuel spend.”
Groceries
Many households have been struggling to put food on the table. Last year the CMA launched a wide-ranging project looking at competition and prices in the groceries sector, to make sure that people can get the best deals possible when they are shopping for essentials.
Retailer profitability analysis
In the CMA’s review of the sector in July 2023, it did not find widespread evidence of weak competition: profit margins were historically low; consumers were switching to get the best deals; and the lowest-price retailers were gaining market share from others. But the CMA committed to have another look at this and monitor margins as costs came down.
Overall, the updated retailer profitability analysis that the CMA has published today should provide shoppers with reassurance that competition in the groceries sector appears to be effective in bearing down on retail margins.
Grocery retailer revenues, profits and margins have increased slightly, in aggregate, in the most recent year (FY 2023/24), as inflation has eased. However, the CMA found that the average operating margin for grocery retailers was less than 3% last year, which remains below pre-pandemic levels. Overall, this does not give the CMA cause for concern about the general state of competition in the groceries sector.
Pricing
The CMA has also been investigating a range of pricing issues, to help shoppers access clear and accurate pricing information:
When shoppers are looking for the best deal possible, they need to be able to easily compare the prices of similar items. Unit pricing can help with this, but a lack of consistency or accuracy can cause confusion. The CMA has identified a number of concerns with retailers’ unit pricing practices, some of which stem from the legislation itself – the Price Marking Order (PMO) 2004, which allows for inconsistences in retailers’ practices, including when products are on promotion. The CMA has recommended changes to the PMO and the Northern Ireland PMO which will help people access better information when they shop, and encourages the government to implement these changes.
Alongside this, the CMA has published guidance aimed at independent retailers to help them display clear and accurate prices in general.
Shoppers are looking for deals more than ever, and, increasingly, supermarkets offer special prices only for customers that use their loyalty schemes. The CMA has been assessing whether the savings on offer through loyalty schemes are genuine. The analysis – involving tens of thousands of loyalty price promotions – is ongoing, but the results to date suggest it is unlikely to identify widespread evidence of loyalty promotions that mislead shoppers. The CMA has commissioned a consumer survey to understand consumer attitudes and the impact of loyalty pricing on how we shop around and compare prices. The CMA will report on this work in November.
Infant formula
Infant formula is a vital part of the weekly shop for many parents and carers.
Through our review of the groceries sector, the CMA identified significant price rises for infant formula (over 25% between 2021-23) and launched a formal market study in February. Five months into the study, the CMA has concerns that the combined effect of the current regulatory framework, the behaviour of suppliers, and the needs and reactions of consumers buying formula, may be resulting in people paying more than they need to.
The CMA will publish an interim report in October setting out in full the concerns it has in this market and its provisional recommendations for action to improve it.
Sarah Cardell, Chief Executive of the CMA, said: “At a time when household budgets are under huge strain, it’s our job to make sure people can be confident they are getting good deals and that they are not being harmed by weak competition or unfair sales practices.
“Despite inflation falling to 2%, many people are still struggling to pay for everyday items – whether it’s filling up at the pump, buying groceries, feeding babies, treating ill pets, or having somewhere to live.
“Last year we found that competition in the road fuel market was failing consumers, and published proposals that would revitalise competition amongst fuel retailers. One year on and drivers are still paying too much.
“We want to work with government to put in place our recommendation of a real-time fuel finder scheme to kick-start competition among retailers. This will put the power in the hands of drivers who can compare fuel prices wherever they are, sparking greater competition.”
A full list of the CMA’s work to help tackle cost of living pressures – including any recommendations already made – can be found on its collection page.
