Scots families will be among hardest hit in UK by energy cost rises warn experts

Scots families will be among the hardest hit in the UK by soaring fuel bills, experts warn.

The concerns come as a leading energy consultancy yesterday forecast a £7,700 average annual bill from April 2023 – the direst prediction yet.

On Friday, watchdog Ofgem said households will see typical bills rise from £1,971 to £3,549 per year from October. But customers in Scotland will suffer more than residents in England.

Figures from the Office for National Statistics published earlier this year showed Scots already spend 40%-50% more on gas and electricity than Londoners.

This is not just because Scotland has a colder climate. The country also has around 470,000 homes on expensive pre-paid meters – a far higher figure per head than elsewhere in Britain, while many home are less energy efficient.

A greater number of Scots, particularly in rural areas and the islands, also rely on “off-grid” power such as oil and LPG gas to heat their houses. The rising cost of these fuels is not protected by the energy price cap and users also do not qualify for ­government help with gas bills.

The ONS report, published in January, found bills were higher for those in Scotland, Wales and Northern Ireland, with the average household in Northern Ireland paying more than 50% extra on energy bills compared to those in London. The figures show homes in Wales and Scotland pay 40% to 50% more.

The new £3,549-a-year price cap is based on a household with typical consumption on a dual electricity and gas bill paying by direct debit. It equates to a direct debit of almost £300 a month.

Crucially, it won’t cap someone’s total bill, which will still rise or fall in line with their energy use. Derek Logie, chief executive of Rural Housing Scotland, said the latest forecasts of energy bills of more than £7,000 a year were “frightening” for families. He said: “This is another crushing blow for hundreds of thousands of Scots, many of whom are already paying higher standing charges for energy than elsewhere, partly because transmission costs are higher, particularly in the Highlands and Islands.

“The UK and Scottish ­governments need to urgently work together to treat Scots more fairly as we have different energy needs because of our geography and climate. The consequences for families will be dire.”

Bill Scott, chair of the Poverty and Inequality Commission – which provides independent advice to Scottish ministers – echoed the concerns. He said: “We are already hearing from people on low incomes about just how difficult they are finding it to get by right now, let alone once these rises take effect. People are self-disconnecting and going without food already.

“The cost-of-living support package announced by the UK Government earlier this year is now clearly inadequate to meet the crisis that will be faced this winter, particularly in many areas of Scotland.

“The UK Government needs to act, and act now, to provide emergency financial support to low-income households and reduce energy costs.”

Every household in the UK is being given a £400 rebate on their energy bills but professor Karen Turner, director of Strathclyde University’s Centre for Energy Policy, said the circumstances of many Scots were not being factored in.

She said: “It obvious that someone in the south of England is going to use a lot less energy to heat their home than someone in Stornoway but they will get the same level of financial assistance to pay bills. This is unfair. We also have to start prioritising renewable energy schemes for Scotland while improving the quality of our homes.”

Standing charges vary from company to company but Scotland often has a higher rate. For example, one leading energy supplier, Octopus, charges London home owners electricity standing charges of 31.8p per day, compared to 49p in parts of Scotland.

Currently the rates for dual-fuel tariffs are 7p per killowatt hour (p/kWh) for gas and 28p/kWh for electricity, with a standing charge of 27p per day for gas and a standing charge of 45p per day for electricity.

However, from October 1, a typical customer who pays by direct debit will be charged 15p per kWh for gas with a standing charge of 28p per day.

For electricity customers, the new rates will increase to 52p/kWh, with a standing charge of 46p a day.

Almost three-quarters of ­households in Scotland could end up suffering from fuel poverty as a result of the latest increases, the boss of an advisory group has warned.

The charity Energy Action Scotland works to tackle fuel poverty, providing advice to Scots on what they can do in the face of soaring bills. The charity’s chief executive Frazer Scott warned the latest price cap rise was “simply going to damage the health and wellbeing of the population”.

In 2019, it was estimated one in four UK households was suffering from fuel poverty – with this defined as being a household ­ having to spend more than 10% of their income on energy, after housing costs have been deducted.

First Minister Nicola Sturgeon has insisted this latest increase in energy bills is “simply unaffordable”.

And the SNP’s Westminster leader Ian Blackford said: “This is an emergency as big as the Covid crisis and in such a scenario, the Government has a responsibility to act.”

However, it is not only less ­affluent households that are facing crippling bills. The Chancellor yesterday suggested those earning about £45,000 annually could struggle to cope with soaring living costs as ­households prepare for another painful price hike over the winter.

Nadhim Zahawi said things would be “really hard” for middle-earners, as well as society’s most vulnerable.

Industry regulator Ofgem warned the UK Government it must act urgently to “match the scale of the crisis we have before us”.

Scotland’s consumer help ­services said they were already receiving record numbers of calls from people worried they would not be able to afford to pay bills.

Citizen’s Advice Scotland’s energy spokesperson Grace Remmington said people in rural areas face particular challenges. She said: “Many rural households are not connected to mains gas and rely on expensive alternatives, such as oil or LPG. Households without mains gas are more likely to be in fuel poverty and off-grid fuel prices are not regulated.

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“The further north you go, the colder and wetter it is, and rural areas tend to have older, less-efficient housing, so people need to use more energy to stay warm and well.

She added: “It’s important to understand fuel poverty rates were already high before the current energy cap crisis. We’ve been very clear that, unless the Government gives people more help, people will die this winter. They will freeze or they will starve.”

Colin Mathieson from Advice Direct Scotland said family debt was already spiralling as a result of the energy cost increases and that a rise in evictions was also expected following the winter.

Government ministers have been accused of being missing in action in responding to the price cap rise.

Despite widespread fears about the incoming energy bills, there has a notable absence of ministers on television and radio to offer assurances about support.

Outgoing Prime Minister Boris Johnson has been on two holidays in the past month and has not put forward any new measures to help with the crisis.

Environment Secretary George Eustice did appear on BBC Radio 4’s Today programme yesterday but only to defend government proposals on tackling damaging sewage spills, which have been criticised by conservation campaigners.

Chancellor Nadhim Zahawi has insisted he is working “flat out” to draw up options for a plan of action for the next prime minister so they can “hit the ground running” when they take office in less than two weeks’ time.

Tory leadership frontrunner Liz Truss is reported to be preparing to give extra winter fuel payments to pensioners, despite in the past insisting she was focused on tax cuts rather than “handouts”.

Her rival Rishi Sunak argued in an article in The Times yesterday that efforts should be focused on low-income households and pensioners, with help delivered through the welfare system, winter fuel and cold weather payments.