Fuel poverty ‘Urgent action’ call amid fears energy bills to rise by another £1,000
SCOTTISH households on an average income are facing fuel poverty this winter, an energy boss has warned.
Scottishpower chief executive Keith Anderson called for “urgent action” amid fears that bills could soar by a further £1,000.
Bills for the average household whose tariff is tied to the energy price cap rose to £1,971 in April following a 54 per cent hike in the energy price cap.
Mr Anderson believes this could increase to as much as £2,900 when regulator Ofgem reviews the price cap again in October, saying it would be a “horrific winter” without government intervention.
He told the BBC: “The average wage in Scotland is somewhere between £31,000 and £32,000.
“If the energy price goes to £2,900, that means every person on an average salary will be defined as being in fuel poverty.”
The energy chief has called for 10 million households to have their energy bills reduced by £1,000 this autumn.
It comes as Ofgem’s director of strategy, Neil Kenward, and director of retail, Neil Lawrence, are to give evidence to MSPS today over the impact of soaring energy bills.
Yesterday, the UK Government refused to rule out another dramatic rise in energy bills before the end of the year.
Asked if the Government recognised the figure was in the “ball park” of its expectations, the Prime Minister’s official spokesman did not rule it out.
A spokesman for the Prime Minister said yesterday: “I can’t comment on speculation – obviously that… wouldn’t be right for me to do so.
“With Ofgem, I think it’s fair to say that we do expect there to be further increases later in the year. The Chancellor has talked about that and has made clear that we will look to do what we can to help with energy bills in the autumn when we know more about what the prices will (be).”
Mr Anderson said the UK Government’s current plan to give each household £200 towards their energy bill, a sum that will need to be paid back, will not be “anywhere near enough”. He said: “You require a sum of about £1,000 to start bringing bills back closer not to where they used to be, but closer to where it’s realistic to expect people to be able to pay them.”
He also called for “targeted” support for the most vulnerable customers.
Mr Anderson added:
“This could be for customers with pre-payment meters, those on Universal Credit, or those eligible for the warm home discount.”
Mr Anderson said that it will still be some time before
predictions are truly accurate. However “we see no evidence in the form of prices to suggest right now that’s going to change”, he said.
Energy companies have seen the wholesale prices they pay affected by the war in Ukraine and ongoing pressure on suppliers.
If the fuel price cap is increased again in October, it is feared that many customers unable to pay their bills, which also means huge losses for energy suppliers.
Mr Anderson said a £10 billion tariff-reduction fund could be paid for by adding £40 a year to all household energy bills for the next decade.
He said such a fund would tackle the biggest cause of the cost-of-living crisis in a way that other government initiatives – such as the recent 5p cut to fuel duty or a possible cut to the frequency of MOT testing – do not.
Scottish Labour leader Anas Sarwar told journalists yesterday that there have been reports of people having been forced to steal gas cylinders because they can’t afford the gas bill”.
Mr Sarwar insisted yesterday that “both of our governments must do more on the cost-of-living crisis”.
He added: “That means we are demanding that the UK Tory Government gets its head out the
sand and delivers a windfall tax on the oil and gas giants who are making billion pounds of profit and put that money directly back into people’s pockets right now.”
But Mr Sarwar also said the
Scottish Government’s response to the cost-of-living crisis has been “not acceptable”, suggesting more action was needed.
He added: “So I say directly to Nicola Sturgeon, if you’re serious about easing the squeeze, stop using people’s pain as your consequence on the obsession on the constitution.
“Don’t make people pay the bills for your desire to break up our country.”
A UK Government spokesman said: “We recognise the pressures people are facing with the cost of living, which is why we have set out a £2bn package of support, including rebates and energy bill reductions.
“We also urge energy companies to support their customers as we manage the impact of high global gas prices.
“We are also supporting vulnerable households through initiatives such as the £500m Household Support Fund and the Warm Home Discount, with the Energy Price Cap continuing to insulate millions of families from high global gas prices.”
Speaking ahead of today’s UK Government Queen’s Speech, SNP Westminster leader Ian Blackford called for politicians to be “stepping up and fixing” the cost-of-living crisis.
He added: “The cost-of-living crisis is pushing struggling people into poverty and hardship through no fault of their own. Instead of stepping up to the scale of the challenge, we are instead being met with a deafening silence from the Prime Minister and Chancellor, who are both shamefully sitting on their hands.
“The measures brought forward by the Treasury so far have been pitiful and fail to even come close to scratching the surface of the crisis – while the Chancellor may think it’s ‘silly’ to deliver support now, people cannot afford to wait
till later in the year.”