Energy bills could swallow three months of average pay ... that’s every last penny

Households in colder, wetter parts of Scotland are facing massive rises

PARTS of Scotland are facing “eyewatering” energy bills of over £7,500 a year this winter as urgent calls are made to provide targeted emergency financial support in the cost-of-living crisis.

The Herald on Sunday can reveal that for some areas of Scotland, the forecast rise would wipe out the take-home pay of the average Scot for over three months.

New analysis, which lays bare the extent of the grave hit on Scotland from predicted rises in the energy bills price cap set by the market regulator Ofgem, reveals a widening postcode lottery of fuel bills, with the gap in prices between the highest and lowest dual fuel bills across Scotland’s local authority areas set to double between now and January to nearly £3,000.

The gap has already widened from £728.07 in April last year to £1,377 now.

Age Scotland, the national charity for older people, now fears the number of older households in extreme fuel poverty – spending more than 20 per cent of their income on heating – will now more than double to over 250,000 based on the forecasts.

It comes as concerns have surfaced that only a small percentage of Scottish households in fuel poverty are benefiting from Government support to make homes energy efficient.

New figures have revealed that the number of households receiving support under the scheme has dropped by almost half since 2016.

The bills analysis, which takes into account energy usage, is partly based on predictions made by consultant Cornwall Insight and others that the price cap will rise by around 81.7% in October and then a further 19% in January, when energy usage peaks.

Energy consultant Auxilione, in another stark prediction shared with The Herald on Sunday, said the typical household is set to see monthly payments for January nearly quadruple from £153 last year to £571.

Frazer Scott, chief executive of Energy Action Scotland, the only national campaign organisation set up to end fuel poverty in the nation, said urgent action was needed over the “eyewatering figures” over the price rises, fearing a “catastrophic loss of life” this winter. “These high costs are a terrifying prospect. And the scale of support that has been provided just doesn’t touch the sides,” he said.

“In some areas that are reliant on electricity, in rural areas there are eyewatering figures. It is just an unaffordable amount of money as a proportion of your income.

“We need targeted support that recognises this. Yet so far neither the UK Government or the Scottish Government in responses have so far provided any significant targeting to those communities and need to do so.

“There has to be an intervention that pulls down the cost for people of energy.”

Around 1.5 million Scots households saw their energy bills rise in April after Ofgem hiked the bills price cap by the biggest increase yet.

From April 1, the three in four customers on default tariffs paying by direct debit saw an increase of £693 from £1,277 to £1,971.

The figure given for the price cap is based on what an average UK household uses. Those who use more than average will have to pay more, and those with less usage will face smaller bills.

Prices will vary

THE cap is based on the wholesale energy price that suppliers pay to buy energy which they then sell on to households.

Across Scotland, the typical dual fuel bill, which has already nearly doubled from £1,375.97 last year to £2,600.56, is now set to more than double by January.

Based on the forecasts, the typical Scot will see bills in January cost more than two months of the average take-home pay unless governments intervene. Average annual bills in Scotland are set to reach

These high costs are terrifying and the support provided by the UK or the Scottish governments just doesn’t touch the sides

£4,725.26 a year in October and then £5,623.05 in January. The average monthly take home pay for a Scot is £2,106.86.

But in the postcode lottery of average dual fuel energy bills in local authority areas, people on Argyll and Bute, which includes the islands of Bute, Islay, Jura, Mull, Iona, Coll and Tiree, are predicted to see prices quadruple since last year.

We can reveal Argyll and Bute faces the highest costs of the 32 local authority areas in Scotland with average annual dual fuel bills soaring from £3,481 now to £7,527.79 in January.

That is nearly two-thirds more than the typical household will be forecast to pay in Glasgow City in January, which at £4,550 will be the cheapest areas for bills in Scotland.

Residents of Comhairle nan Eilean Siar, the council that covers the Western Isles, face the second-highest bill hikes with average prices set to soar from £3,316.58 to £7,171.21. And in the Shetland Islands, bills are forecast to rise from £3,245.65 to £7,017.85.

Housing experts say one of the reasons for the energy bill gap is the condition of the housing stock, colder and wetter weather, and the limited availability of gas in rural Scotland meaning many only heat their homes with oil or electricity which is more expensive.

There are also the extra costs in supplying and distributing electricity to northern Scotland which is said to be 2p more per kilowatt hour than in the south.

That extra cost is passed on to the consumer through network distribution charges and there have been calls to have them scrapped.

Orkney and Shetland MP Alistair Carmichael, the Liberal Democrats’ home affairs spokesman, is pushing for an “energy furlough scheme” to cut energy bills in the face of record prices. The plan would save Scots over £2,000 a year by cancelling the price cap expected to be announced by Ofgem for October, with the Government instead paying the shortfall to energy suppliers so that they can afford to supply customers at the current rates.

The Government would recoup the cost by expanding a windfall tax on oil and gas company profits, and using higher-thanexpected VAT revenues.

“Fuel poverty is already a longstanding issue across rural and island communities in Scotland and we know that past price hikes have hit our communities harder, from Argyll to Unst,” he said.

“The coming energy price rise in October is only likely to exacerbate the disparities in fuel poverty that we already witness in the Highlands and Islands.

“That is all the more reason why we need bold action, as the Liberal Democrats have called for, to stop the energy price rise in its tracks and protect vulnerable communities.

“No other party has truly grasped the scale of the tsunami facing families this winter. Forget heating or eating – this will be a choice between freezing and starving for people in the Highlands and Islands and beyond, if we do not act.

“This plan is about protecting families but it is also about providing confidence for our economy.

“If businesses and households can look to the other side of winter with the assurance that bills will remain stable, then other fiscal pressures are likely to lessen. The first step, however, is assured action right now.”

Adam Stachura, head of policy at Age Scotland, said: “If you consider how unmanageable energy bills are for people right now, I shudder to think how anyone is going to be able to cope come the winter. These forecasted increases will sink household budgets and cause a spike in fuel poverty levels unlike anything we have ever seen before.

“Older people live in some of the least energy-efficient homes in the country. More than a £100 million is invested by the Scottish Government every year into energy-efficiency measures and support but our research shows that more than half of older people have no idea how and where to access this.”

Desperate folk

HE added: “We need to see the Scottish Government do a better job of taking the financial support directly to them, particularly to those households on the lowest incomes.”

Energy Action Scotland suggested a social tariff should be brought in to ease the price hikes for those in fuel poverty, paid for by those who can afford to pay or through Government support.

Frazer Scott said: “There are things government can do quite quickly to intervene for some of the most low-income households.

“People have already been resorting to desperate measures to heat. It is desperate to travel round on public transport – using free bus passes – for warmth and comfort, or have to visit public buildings in great numbers.

“We know of examples where people have ripped up floorboards and burned them for fires to stay warm, burning clothes, smashing up furniture, burning anything and putting their lives at risk just to stay warm. But when people are desperate that is what they will do.

“That is why Government has to act fast.”

A Scottish Government spokesman said: “People are rightly concerned about the current crisis and the UK Government holds most of the powers needed to tackle it. That is why the Scottish Government continues to urge UK ministers to use all the powers at its disposal to provide immediate support to address the current crisis households, families and businesses are facing.

“We will continue to do everything within our resources and powers to help those most affected by the cost-of-living crisis.”