Friday last week brought confirmation of news we’ve all been dreading.
Regulator Ofgem confirmed that the energy price cap is set to rise by 80% from October, with average household bills increasing to more than £3,500 a year. This rise follows on from a 54% rise just a few months ago and makes energy simply unaffordable for millions – perhaps the majority – of people across the UK.
Let’s be absolutely clear – this rise cannot be allowed to go ahead. If it does, the consequences will be catastrophic for millions of households and businesses.
These eye-watering energy bill hikes – and there are more steep rises expected in the months ahead – are the most vivid driver of of the cost of living crisis which is affecting every area of our society.
👇 This is the grim reality facing Scotland, as part of the UK, because of Westminster inaction on the cost-of-living crisis.
📢 Parliament must immediately be recalled for an emergency budget which will deliver meaningful and long-lasting financial support to households. pic.twitter.com/3TfoFj8i8B
— The SNP (@theSNP) August 19, 2022
The Bank of England has forecast that inflation will rise to more than 13% in October, which means that not just energy, but everything else too, will be costing more. What is also terrifying is that experts predict it could reach more than 18% ultimately – that would be the highest rate of inflation in the UK for almost 50 years.
The Scottish Government is treating the rapidly escalating cost of living situation as a public emergency – and we will continue to do everything we can to mitigate this cost of living crisis.
Last week, before the price cap announcement, I met with energy companies and advice organisations to discuss what can be done to help ease the pressure on households across Scotland.
We reached a consensus that energy customers simply cannot be expected to carry the burden of further price rises in October and beyond, and that the UK Government must now commit to freeze the cap for all households and then work with energy companies to agree how that is paid for. And we agreed that this commitment must come now. There is no time to waste.
Our foremost concern is for those in or at risk of fuel poverty – and it is imperative that those worried about or struggling with heating their homes access the information and support they need to reduce their energy bills.
To that end, we have announced a £1.2 million package to enable the immediate expansion of energy advice services to ensure households and businesses receive the support and guidance they need.
If you are worried about your finances, you are far from alone – and there are many excellent sources of advice that you can access, including Advice Direct Scotland, Home Energy Scotland and Citizen’s Advice Scotland.
And of course, we have been doing everything we can to support household budgets within the powers of the Scottish Parliament.
Measures we introduced in recent years – such as the doubling of free childcare provision to 1140 hours, the Council Tax Reduction Scheme, and expanding the provision of universal free school meals – were all designed to help household budgets, and they’ve never been more important.
The SNP Government’s package of 5 family benefits for low-income families, including the Scottish Child Payment, is providing unparalleled support for families
I need to be absolutely candid though – and I wish this wasn’t the case – that when it comes to energy policy, the key powers lie at Westminster.
Without action by the UK Government to address the problem at source, the actions we are taking can only ever partly mitigate the impact of such dramatic price rises.
It is the UK government which has the borrowing and regulatory powers to make the urgent interventions which are needed right now. By refusing to use its reserved powers to tackle the cost of living crisis, Scottish families and businesses are being left in the lurch – not knowing what, when, or if help will come.
As well as cancelling any further price rise – which is the most important intervention they could make – there are a number of other steps we are calling on the UK Government to take.
They need to provide significant additional support to help households and businesses already struggling with energy bills, and the impact of inflation more generally.
They also need to take action to protect small and medium size businesses, and other organisations not covered by the price cap, from rising energy costs.
🏴 First Minister @NicolaSturgeon called on the UK government to tackle rising energy costs.
👉 Cancel the next energy price rise.
👉 Scrap VAT on fuel.
👉 Put more money in the hands of those who need it most.
⏰ It's time to act. We can't afford any more Westminster inaction. pic.twitter.com/w2IeVEIzoW
— The SNP (@theSNP) August 11, 2022
More fundamentally, they need to reform the energy market for the longer term to prevent this situation from occurring again in the future.
People are quite rightly asking why, in one of the most energy-rich countries in Europe, so many households are now facing fuel poverty.
Something is fundamentally wrong with the UK’s energy policy.
None of this can wait any longer.
The Tory government has been in hibernation for the whole summer, while the Tories choose what will be the fourth Prime Minister in six years.
In seven days’ time, we will know who that new Prime Minister is going to be. From the moment they take office, tackling the cost of living crisis needs to be the top of their in-tray.