The Cost Of Living Crisis In Scotland, Wales And Northern Ireland

19th July 2023

How rising costs are hitting different places in the devolved nations.

The Centre for Progressive Policy - CPP's latest report examines the varied impact of the cost of living crisis across Scotland, Wales and Northern Ireland. Much analysis of the crisis to date has focused on the experience in England, largely for data reasons, and this report seeks to fill the gap. Its key findings include:

High housing costs in cities

The report finds that high housing costs are adding pressure in cities across the three nations. Private rents are equivalent to 39.7% of median take-home pay in Midlothian; 34.5% in Glasgow; and 31.3% in the City of Edinburgh. The rental market in Northern Ireland has become the most overheated of all four nations, with rents rising 9.9% in the year to March 2023.

Large numbers of households in cities in Scotland and Wales have high mortgage burdens, a concern as interest rates continue to rise. Recent analysis shows the number of households with recent mortgages that are four or more times the size of their income. In Scotland, Edinburgh is most susceptible to this financial strain, with 32.7% (or 4,423 households) of mortgages taken out between 2018 and 2021 having ratios four times their income. In Wales, Cardiff is the area most exposed to this trend, with 29.7% of all recent mortgage-borrowers, or 3,742 households, in this position.

Fuel poverty in remote areas

Remote communities across the three nations are more vulnerable to fuel poverty. In the absence of official statistics in Northern Ireland, in 2022 the fuel poverty charity National Energy Action (NEA) estimated that around 45% of households were living in fuel poverty - more than double the 22% figure from 2016. Most areas outside of Belfast are not connected to the electricity grid: an estimated 68% of the population depends on heating oil to power their homes, rising to 82% in rural areas. The Energy Price Cap has never been applicable to Northern Ireland, and heating oil trades within a completely unregulated market which spiked long before the Energy Price Cap neared its peak.

Higher food costs for remote rural communities in Scotland and medium Welsh towns

With UK food inflation now at 18.4% year on year, remote rural and island communities in Scotland are particularly exposed to higher food prices, which are compounded by the additional costs of transporting food. A previous study revealed that pre-crisis, weekly food costs in remote rural areas on the Scottish mainland and Scottish Islands were already 2-4% and 5-13% higher respectively than in urban UK areas, depending on household size.

Medium sized towns in Wales had higher rates of food insecurity going into the crisis (2021), with Merthyr Tydfill a particular outlier with a very high rate of food insecurity of 27.97%.

Policy recommendations

CPP recommends that:

The devolved governments of Wales, Scotland and Northern Ireland provide more discretionary funding for councils, similar to the Household Support Fund available to English local authorities, to spend as they judge best to support their residents.

The devolved and UK governments to implement better national data collection and legislation to improve data sharing by councils and other local partners during moments of crisis.

The UK government conducts geographic analyses to measure the impact of crisis policy interventions, to ensure they provide adequate support that meets the needs of different communities.

Read the full report HERE
Pdf 49 Pages