The Welsh Government's Finance Minister, Rebecca Evans, wrote to the Chancellor of the Exchequer calling on the UK government to "act now and stand with the Welsh Government to provide a full crisis response to the cost of living emergency"1. The call was published on 22 March 2022, ahead of the Spring Statement1.
The Welsh Government said UK government decisions on unemployment support, changes to universal credit and increases in taxes on income are adding to pressure on household budgets1. It called for welfare benefits, currently uprated at 3.1%, to be significantly increased, given inflation levels expected to hit almost 8% by April1. It also called for reversal of the decision to remove the £20 universal credit uplift1. The Finance Minister described the case for a windfall tax on what the announcement calls the excessive profits made by big energy companies, with the money raised spent on supporting vulnerable households, as "irrefutable"1.
Other measures put forward include moving the social policy costs to general taxation, introducing a low income energy tariff to better target support to lower income households, and providing further and increased support through the Warm Home Discount and other winter fuel payment schemes1. The Finance Minister also called on the Chancellor to take steps to secure the UK's energy security in response to the geopolitical crisis arising from the Ukraine conflict, and for greater investment to incentivise renewable energy generation to meet net zero targets and support a more resilient domestic renewable energy system1.
"We have invested more than £330 million to support people through the cost of living crisis, nearly double equivalent support in England."
The same statement says it is the UK government that holds the key levers, particularly through the tax and benefit system, to offer people more financial protection1. The Welsh Government's own responsibilities in this area, including energy and buildings policy, are set out in its Energy and Buildings Policy in Wales remit, while the wider split of powers between Cardiff and Westminster is covered under devolution and household energy independence.
Why it matters for households
The measures proposed would act on household bills through the tax and benefit system rather than through energy market rules. A low income energy tariff and an increased Warm Home Discount would target support at lower income households specifically, rather than spreading it across all bill payers1. Moving social policy costs to general taxation would shift a component of bills off standing charges and onto taxation, though the announcement does not give figures for the effect on a typical bill1. The call for investment in renewable generation is framed around domestic energy resilience, which bears on how exposed UK households are to imported fuel prices1. Wales' own generation targets are covered under Wales' renewable energy targets.
The announcement does not state the value of any individual measure, the number of households that would be affected, or how a low income energy tariff would be administered. Those details have not been reported1.
What happens next
The Spring Statement was the next scheduled fiscal event at the time of publication1. The announcement sets out no timetable for the UK government to respond to the letter, and no commitment from the Treasury is recorded in it1. Whether any of the proposed measures are taken up has not been reported1.