An 80.06% rise in the energy price cap will be “simply unaffordable for millions” and must be cancelled, Nicola Sturgeon has said.
Ofgem confirmed the increase, which will send the average household’s yearly bill from £1,971 to £3,549, will come into effect for around 24 million households in England, Scotland and Wales on default energy tariffs on October 1.
The cap will will remain in place until December 31, when it will be adjusted again. It is expected to be raised even higher for the first months of 2023.
Sturgeon tweeted: “This is simply unaffordable for millions. It cannot be allowed to go ahead.
“This rise must be cancelled, with the UK gov and energy companies then agreeing a package to fund the cost of a freeze over a longer period, coupled with fundamental reform of the energy market.”
Warnings care home closures due to rise in energy costs could leave vulnerable and elderly homeless
Scotland’s Energy Secretary Michael Matheson said the increase is “unsustainable” and warned it would push millions into fuel poverty.
He told BBC Radio Scotland’s Good Morning Scotland programme households were already struggling with the cap increase in April this year, and that “increasing it by another 80% is simply unsustainable.”
He said: “It will force quite literally millions of households into fuel poverty and extreme fuel poverty and is unsustainable.”
📣The energy #PriceCap is changing and this could affect you
Record high global gas prices mean on Saturday 1 October the energy price cap will rise to an average of £3549 per year
Tap for more⬇️
— Ofgem (@ofgem) August 26, 2022
Ofgem’s chief executive Jonathan Brearley warned of the hardship energy prices will cause this winter and urged the incoming prime minister and Cabinet “to provide an additional and urgent response to continued surging energy prices”.
The regulator said the increase reflected the continued rise in global wholesale gas prices, which began to surge as the world unlocked from the Covid pandemic and had been driven even higher to record levels by Russia slowly switching off gas supplies to Europe.
In a statement issued after the increase was confirmed on Friday, Matheson called on the UK Government to act.
He said: “Today’s price cap announcement and increase imposes a burden that customers simply cannot be expected to carry.
“The only acceptable course of action now is for the UK Government, who have the necessary policy levers and borrowing powers at their disposal, to take immediate steps to cancel the increase for all households.”
This is simply unaffordable for millions. It cannot be allowed to go ahead. This rise must be cancelled, with the UK gov and energy companies then agreeing a package to fund the cost of a freeze over a longer period, coupled with fundamental reform of the energy market https://t.co/bDXM7fDeyD
— Nicola Sturgeon (@NicolaSturgeon) August 26, 2022
Matheson added: “No single government, company or organisation can solve this crisis alone. It requires a collective response commensurate to the situation.
“We will continue to work with our partners, energy companies and stakeholders to do everything we can to help the people of Scotland through this deeply unsettling time.
“We will also continue to press the UK Government to reform the energy market to prevent this situation occurring again in the future.”
Matheson said the Scottish Government is treating the situation as a “public emergency” and has prepared a £1.2 million package to enable the immediate expansion of energy advice services.
The £2 million Social Housing Fuel Support Fund, administered by the Scottish Federation of Housing Associations, will open on Monday to provide help to the most vulnerable households.
Scottish Labour leader Anas Sarwar and Scottish Liberal Democrat leader Alex Cole-Hamilton called for energy prices to be frozen.
Sarwar said: “This eye-watering price hike risks plunging millions of people into fuel poverty.
“This is a national emergency and our governments have a moral duty to act.”
Today, Ofgem have announced an energy price cap rise that almost triples bills since last winter.
This rise will be devastating to people across the country.
Labour has a fully costed plan to freeze energy bills, meaning people won’t pay a penny more this winter. pic.twitter.com/Z6zfAuEBWt
— Keir Starmer (@Keir_Starmer) August 26, 2022
Scottish Liberal Democrat leader Alex Cole-Hamilton MSP said: “This energy price rise will be devastating for hundreds of thousands of Scottish families and pensioners already struggling to make ends meet.”
Citizens Advice Scotland also said the increase should not be allowed to happen.
The charity’s chief executive, Derek Mitchell, said: “This increase should not go ahead. It is absolutely horrifying for people who are hanging on by a thread financially.”
Chancellor Nadhim Zahawi said the increase in the energy price cap will cause “stress and anxiety” for people but the Government is working to develop more options to support households.
He said: “I know the energy price cap announcement this morning will cause stress and anxiety for many people, but help is coming with £400 off energy bills for all, the second instalment of a £650 payment for vulnerable households, and £300 for all pensioners.”
Consumer champion Martin Lewis said energy prices will be “unaffordable” this winter.
He told ITV’s Good Morning Britain: “The prediction now in January is up another 51% on top of where we are now and that would take a typical bill and direct debit to £5,386 a year.
“And that is not such a crystal ball prediction because we are seven months through the 10-month assessment period for the January price cap. ”
Lewis added: “So if we look at the totality across the winter, from October until March, you are probably talking on typical use an average bill of over £4,400 a year, typical pro rata – it is totally unaffordable.”
Meanwhile, campaigners from across Scotland are set protest outside Ofgem’s Glasgow offices on Friday afternoon, demanding action to halt rises to household bills.
Last week, research showed that 72% of Scottish households are expected to be living in fuel poverty by January 2023.
The Power To The People group protested outside Scottish Power’s headquarters a fortnight ago and have called on the public to make their voice heard amid the rising cost of living crisis.
Matt Kerr, a Glasgow Labour councillor said: “This increase could be stopped tomorrow- it’s within the government’s gift – they have 35 days to get off their backsides and do their jobs.
“Forcing millions of people into fuel poverty is a political choice – if those in power at all levels refuse to act, they need to get out of the way or reap the whirlwind.”
This Friday…#FreezePricesNotPeople pic.twitter.com/z5m3IZqpxQ
— Power to the People Glasgow (@PTTPGlasgow) August 22, 2022
Former Glasgow MSP Frances Curran said: “This is the second protest we have organised to demand an energy price freeze. We have given them fair warning that half of the families in this country can’t pay their bills. Our government and the energy companies are walking into a future where they face mass non-payment by default.
“There is more wealth in this country than at any time in history. A price freeze or mass protest. It’s the government’s move.”
Jess Galloway, a Power To The People activist, added: “One household in fuel poverty is too many, but 3 in every 4 households? That’s a provocation. Imagine what that will look like for you and your neighbours.
“Everyone I bump into at the moment is talking about the energy bills. Everyone I know is angry, and that’s why this campaign is something everyone can get behind. We all need to turn our words into actions and come together because this is a fight we can’t afford to lose.”
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