John Swinney has demanded “immediate assistance” from the UK Government amid warnings that the latest hike in the energy price cap will leave Scots facing a “sharp rise” in bills.
First Minister calls for swift action
The Scottish First Minister said: “The UK Government came to office promising to cut people’s bills by £300, yet bills are already more than £250 higher – and they are going to increase further as we head into winter.”
“Those higher costs are causing unnecessary difficulties for families already struggling with other pressures on household budgets.”
Calling for “immediate assistance”, the First Minister added: “Scotland is an energy rich country, so households should not be worrying about their bills – urgent and meaningful action is needed now.”
Price cap rise details
He spoke out after the regulator, Ofgem, announced its price cap – which sets the maximum amount suppliers can charge for a unit of energy and the standing charge together – would rise by 4% in October, to a three-year high.
This could see a typical household pay £1,723 for their gas and electricity, if this level was sustained for a year.
This latest increase in the price cap reflected higher wholesale gas prices as a result of the ongoing conflict in the Middle East.
Analysts Cornwall Insight have forecast already a further 9% increase to the price cap in the New Year, which would put an average bill up to £1,872 a year.
Consumer groups respond
David Hilferty, director of Citizens Advice Scotland, said that people are “struggling to pay for the essentials, especially as energy bills continue to rise”.
He added: “Increasing inflation shows that the cost of living is getting worse; we are regularly seeing the brutal reality of people who can’t afford to heat their homes. Many are being pushed into debt to pay for the essentials we all need.”
“With another winter fast approaching, the time to act is now. We need bold, targeted, and urgent action across the energy sector to make sure that people can afford to heat and light their homes, without which people will experience real harm.”
“The UK Government and regulators need to introduce measures like a social tariff on energy bills and a robust energy debt relief scheme.”
Government response
Prime Minister Andy Burnham said that the rise in the energy price cap is “difficult for people”.
UK Energy Secretary Miatta Fahnbulleh said that “families will be understandably concerned about the cost of energy bills this winter” adding that the rise in prices “is being driven up by the Iran War”.
She said: “Energy is an everyday essential and it needs to be affordable for everyone, which is why we have cut VAT on electricity bills from October, to give families some breathing space.”
“This has limited the rise in the price cap and follows the £150 in costs we removed from bills earlier this year, and we will keep looking at what more we can do to protect families from unaffordable bills.”
Debt relief calls
Consumer Scotland called for Westminster to “urgently introduce a debt relief scheme” for those who are struggling.
Chief executive Sam Ghibaldan said: “While government does provide some support, current schemes do not consistently reach the households facing the greatest affordability pressures.”
His made the plea at a time when energy debt “continues to reach unprecedented levels”.
Mr Ghibaldan said: “Consumers are facing a sharp rise in energy prices, which will come into effect as winter approaches.”
“This is the second consecutive, quarterly increase this year, and it will hit those who use gas hardest at a time when finances are already stretched.”
Craig Tobin, of Advice Direct Scotland, similarly told how the rise in the price cap would “cause concern for Scottish households, particularly as we move into autumn and people start to use more energy on heating their homes”.
Backing calls for a social energy tariff, Mr Tobin said: “Household budgets are under huge pressure, with this price rise adding further stress as the cost of living remains extremely high.”
“People will be paying hundreds of pounds more than they were before the energy crisis hit five years ago, which is why we are calling for the introduction of a social energy tariff, which could give the most vulnerable people access to the cheapest deals.”
He added: “For now, customers can take practical action by examining their bills, finding out how much they are paying, and checking if there are cheaper options available with other suppliers.”
“Taking regular meter readings and checking the level of your direct debit are as important as ever. If you have a smart meter, ensure it is working.”
“The most important thing to remember is that nobody should struggle alone, and help is available. Anyone experiencing difficulties should visit www.energyadvice.scot or call 0808 196 8660 for assistance.”
