Ukraine-Russia war: Cost-of-living crisis set to get worse as fertiliser prices soar after sanctions on Vladimir Putin's ally Belarus – Alex Cole-Hamilton MSP
My new-found knowledge comes in large part from our excellent new Scottish Liberal Democrat agriculture spokesperson, Claire McLaren, herself of Perthshire farming stock.
She’s been teaching me a great deal about the raw deal Scottish farmers have had to put up with. It seems that things are about to get all the harder for them and this will in turn have massive repercussions for the cost-of-living crisis.
On the weekend, Claire sent me a screengrab of a Facebook post from a local farmer. It showed the corner of his barn, with his required consignment of fertiliser for the year. It looked like several tonnes. He’d added the caption: “Fertiliser, a year ago this would have cost £14,000, two weeks ago £39,000, and yesterday it would cost £57,000, where will it end??!!”
Apparently this eyewatering jump in cost comes down to potash or the lack of it. It’s a key ingredient in most agricultural fertilisers and the problem is that Europe gets most of its potash from Belarus, a country now in the grip of Western sanctions following their enablement of Russia’s invasion of Ukraine.
Because importers believe supplies will be scarce in months to come, they are hiking prices. This will have a knock-on effect on the amount that farmers can grow in the coming months, which may well lead shortages of certain foods and higher retail prices for what they can still grow.
Ultimately this will be another financial pressure on already cash-strapped Scottish households. There seems no end to this perfect economic storm any time soon, so we must look to our governments for help.
Today, the Chancellor will deliver his spring spending statement. Newspapers are speculating he could deliver a cut in fuel duty and a small increase in the level at which earners start paying National Insurance. But that’s merely tinkering at the edges.
Rishi Sunak needs to go for something much bigger. This is a crisis that threatens household incomes in the order of magnitude that Covid did and so his response should be equally seismic. For the Lib Dems, that means two things. An immediate 2.5 per cent VAT cut, something that would put £600 a year back in the pockets of UK consumers.
He also needs to leverage a one-off Robin Hood tax on the billions in extra profits made by oil and gas producers as prices have skyrocketed, which could see a further £300 extended to households to cope with energy bills.
There’s help needed from the Scottish Government too. As well as insulating our homes to bring down energy costs and reversing their £250 million cut to our councils which will see most local authorities forced to increase council tax to plug gaps, the SNP/Green coalition must look with urgency to the crisis facing farmers. This cost-of-living crisis is spiralling out of control and both our governments have the power to do something about it.
Alex Cole-Hamilton is Scottish Liberal Democrat MSP for Edinburgh Western