Cost of living crisis: how does the UK compare to the rest of Europe? | money

AAs the cost of living crisis continues to deepen, millions of households are in need of assistance. And the problem has spread across Europe. In the UK, more than 8 million households receiving earnings-related benefits and tax credits are entitled to a £650 living expenses payment, while there is also a £300 pension payment and a £150 disability payment. In winter there is a £400 rebate on electricity bills for all households. Many households have been paid a £150 rebate on Bands AD council tax but it is understood some families are still waiting to receive it.

There have also been other schemes, such as the government-backed Great British Rail Sale, announced in April, which saw a million off-peak train tickets reduced by up to 50%, mostly in advance. A cost-of-living package unveiled a few days ago will initially include a mix of new and existing discounts on meals, mobile tariffs and theater tickets from companies including Asda, Morrisons, Amazon and Vodafone.

But how does the UK compare to other European countries?

Ireland

Ireland has lent energy to one of the most expensive countries in the EU, cut taxes on gas, electricity, petrol and diesel, and slashed bus and train fares. The measures, introduced since early 2022, have netted the average citizen an extra €480 (£403).

Households received a €200 energy credit in April, followed by a 9% to 13.5% VAT cut, which will save households around €50 on gas and €70 on electricity. Public transport fares were cut by 20% in April and halved for people aged 19-23. The fuel tax cuts amount to 20 cents per liter of petrol and 15 cents per liter of diesel.

The government says measures in last October’s budget, such as a €5 increase in the weekly pension and a modest de facto income tax cut, anticipated the cost-of-living crisis.

Leo Varadkar, the Tanaist, or Deputy Prime Minister, claimed Ireland was doing “much more” than Britain, although fact-checkers have had difficulty verifying or refuting that claim.

Germany

In July, Germany decided on various measures to alleviate the cost of living crisis. A €9-a-month fare scheme covering journeys on all urban and regional transport should encourage commuters and holidaymakers to leave their cars at home and support those who rely on public transport. ICE high-speed trains are excluded from the offer, which runs until August 31.

From June to August, the government also cuts taxes on fuel, which accounts for about 50% of the total fuel price. While studies suggest that fuel companies have largely passed these cuts on to consumers rather than pocketing them as initially feared, prices, particularly for diesel, remain significantly higher than around this time last year.

In addition, there are a number of one-off payments: Employed persons are to be paid an energy price lump sum of 300 euros via their employer’s pay slip, which companies can claim back from the state. For freelancers, this is reflected in a reduction of the advance income tax payment by €300.

Welfare recipients receive 200 euros. One-person households receiving housing benefit receive EUR 270 per month, two-person households receive EUR 350 and thereafter EUR 70 for each additional person.

To further support larger households with rising gas and electricity bills, families will receive a one-time payment of €100 per child in July.

Spain

Spain arguably went a step further than Germany earlier this month when its Socialist-led coalition government said travel across certain parts of the state’s Renfe rail network would be free from September 1 until the end of the year. This comes on top of an earlier policy whereby the government agreed to a 30% discount on all public transport, including the metro, buses and trams.

The price cuts are being implemented to cushion the effects of inflation and rapidly rising energy prices. The rail discounts of 100% apply to multi-journey tickets for local transport and medium-distance routes of less than 300 km.

While it’s primarily aimed at Spanish season pass holders, tourists can benefit by purchasing multi-journey tickets.

Last year, Spain cut VAT on electricity bills from 21% to 10% and announced a further cut to 5% last month to dampen the impact of price increases on consumers.

A package of measures announced in late June includes a 15 percent increase in pensions for those most at risk, including widows and the disabled, and a €200 payment to some categories of people earning less than €14,000.

The price of gas cartridges will be determined by the end of the year.

France

The French government, keen to prevent energy bills from rising any higher than they have been, is ready to spend billions of euros on the full nationalization of energy company EDF to deal with the energy crisis and shore up domestic supplies.

By becoming fully state-owned, the company aims to make investments to reduce its reliance on imported fossil fuels. In January this year, the government announced that it would force EDF to suffer a financial loss of 8.4 billion euros by capping the increase in bills this year to 4%.

Meanwhile, every citizen whose gross monthly income was €2,000 or less received a one-off “inflation deduction” of €100 after the energy price spike last year.

A discount of 15 cents per liter on petrol and diesel was also introduced at the beginning of the year.

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