MILLIONS of households have seen their shopping bills jump by more than three times the rate of wage increases since January as the soaring costs of food and transport fuel are passed on to hard-pressed consumers.
The average cost of a weekly basket of groceries has risen £7.48 to £136 since January – a 5.8 per cent rise, according to figures from data analysts Verdict.
Over the same period, average wages have increased by only about 2 per cent.
The find
ings have confirmed fears that many households could struggle to keep up with the rising price of staples such as fresh fruit and vegetables, bread and milk.
The biggest jump has come in the cost of fresh fruit and vegetables, with a rise of almost 16 per cent. There has also been a 6.2 per cent increase in the cost of dairy products and a 7 per cent hike in fish and meat prices.
One of the main reasons for the increases is the rising cost of oil, which this week topped a record $135 a barrel. As well as driving up the cost of production and transportation, the dash for alternative sources of energy has led to a surge in demand for biofuels, pushing up the price of wheat. Land is also being diverted from food to produce biofuel crops.
More demand for staples such as rice from developing countries including India and China is also making food more expensive, and recent droughts in Australia and elsewhere have added to the problems.
Neil Saunders, the consulting director of Verdict, said that the problems suggest real inflation may be higher than the official figure of around 3 per cent.
And he added that it underlined the problems faced by poorer people and why there was anger over scrapping the 10p income tax band.
He said: "For many, the price of the weekly food shop is the real measure of inflation. It's what they react to when they make decisions about the household budget and what to spend on other things."
He added: "For those at the lower end of the income scale, increases in food prices can be very difficult to cope with because there aren't many other areas where they can cut back to make savings.
"It's one of the reasons the abolition of the 10p rate of tax was seen as a slap in the face for poorer families – it came at a time when they are already struggling to buy even basic items."
According to NFU Scotland the food increases reflect wider problems in the agricultural industry with production costs.
There have been particular problems in pork and dairy farming, where farmers are often making a loss.
And James Withers, the deputy chief executive of NFU Scotland, claimed the supermarkets were keeping much of the price increases for themselves.
"What we are seeing is the supermarkets increasing their margins to cover fuel costs, but very little of that is coming back to the farm gate," he said.
"They still make 10p on a pint of milk, and just 3p off would make a huge difference to the viability of our dairy industry."
A Scottish Government spokeswoman said that the survey merely underlined the problems that ministers are trying to contend with at the moment.
She added that Scottish ministers have called on the UK government to help out by introducing a fuel tax regulator to balance out the effect of rising oil costs.
"Scottish ministers have on-going correspondence with the UK government to highlight the effect that escalating fuel costs have on Scotland and will continue to press the UK government to take steps to mitigate the problems that are presented by rising fuel prices," she said.
The issue was also raised in a debate this week in Holyrood by Nationalist MSP Alasdair Allan.
He has called for the Chancellor to vary fuel tax in rural areas, partly to help with the problems faced by farmers.
"This huge increase in the cost of groceries only reflects the recent increases in fuel prices which are driving costs up across the board," he said.
"In remote and rural areas … farmers, fishermen and the hauliers transporting the produce to supermarkets and local shops have seen their diesel costs increase by an enormous amount in recent months.
"The UK government must take action to bring down the cost of fuel to help cut costs across the board."
Fuel poverty relief is attacked as 'sticking plaster'CAMPAIGNERS have dismissed the government's latest measures to tackle fuel poverty as "a sticking plaster" solution.
Ministers have unveiled measures to allow energy firms to share data so they can identify households that should be on lower "social" tariffs.
There are already 2.5 million households in fuel poverty – which means they spend more than 10 per cent of their income on energy.
But more expected rises in household bills will mean another 500,000 pushed into the poverty bracket.
Alistair Darling, the Chancellor, shrugged off suggestions that the government was not doing enough, blaming the global surge in oil prices.
Measures unveiled yesterday by Malcolm Wicks, the energy minister, include giving Ofgem, the energy industry regulator, data to share so that some customers can be offered lower tariffs.
He conceded that households were likely to be paying annual power bills of £1,000-plus in future, but insisted pensioners would get help.
"Frankly, it's intolerable that any elderly person could be cold in winter," he told BBC Radio 4's Today programme.
But opposition parties and campaigners were unanimous in their condemnation of the new strategy.
Kate Jopling, head of public affairs at Help the Aged, said: "There is still not enough action to tackle the issues on the scale that we need. We are not knocking the measures put in place but we can't use a sticking plaster to hold back a catastrophe."
Mike Weir, the SNP's energy spokesman, said there was too big a disparity in the social tarrifs offered by different energy companies.
Alan Duncan, the shadow business secretary, said that the strategy was "spin" and allowing monitoring of energy bills was another way for the govern-ment to spy on people.
The full article contains 1043 words and appears in The Scotsman newspaper.
