Tackling the energy cost crisis

Further actions to support consumers and businesses through the winter have been agreed at a virtual summit between energy companies and advice organisations and Ministers.

The energy cost crisis summit discussed this week’s reversals to UK Government measures set out since the previous summit, and agreed longer-term certainty is urgently needed ahead of the anticipated energy price cap increase, currently due in April.

First Minister Nicola Sturgeon said:

“The curtailing of the Energy Price Guarantee by the Chancellor of the Exchequer earlier this week has eradicated what meagre certainty people and businesses had over their bills and finances in the short to medium-term. Even the current cap of £2,500 until April – while better than a rise to £3,500 – is still a very significant increase for households who are already struggling to pay their bills and heat their homes. Without further mitigation the increase to £2,500 under the Energy Price Guarantee will see an additional 150,000 households in extreme fuel poverty.

“The deficiencies in the UK Government’s package mean we are still in an emergency situation. The economic outlook has been made far worse by other aspects of the mini-budget – most of which have now had to be reversed entirely.

“The Scottish Government is working hard within its limited powers and finite budget to support people, business, public services and the economy. Part of that work will involve ongoing engagement with energy companies and advice organisations throughout the winter to see how, individually and collectively, we can alleviate the huge challenges people are facing as well as signposting existing schemes and support that is available.

“It is clear however that more substantial reform of the energy market is needed to address the issue in the long term, and the power to do so lies with the UK Government.”

Background

Scottish Energy Retail Summit: update on collaborative action - gov.scot (www.gov.scot)

In October, the UK Government announced the Energy Price Guarantee for domestic consumers and the Energy Bills Relief Scheme for businesses. Following these announcements, the group reconvened on 20 October to discuss the implications on suppliers, advice organisations, the third sector, businesses and consumers, including those off-grid who are not part of an energy supply contract.

The following themes were identified for the Scottish Government, energy suppliers, advice organisations and business groups to explore in more detail moving forward:

• The Scottish Government will work with Energy UK and other organisations to increase smart meter coverage in Scotland, with a particular focus on rural areas
• partners will share data with the Scottish Government to help inform calls upon the UK Government, to provide clarity on continued support for domestic and non-domestic consumers as soon as possible
• The Scottish Government will work with the business sector to explore how businesses can be supported with energy costs, within our devolved powers
• ensuring maximum coordination of energy efficiency information and advice services to all consumers

To fully realise the aims of these work streams the Scottish Government has called on the UK Government to take further action with a particular focus on:

• accelerating the review of the Energy Price Guarantee scheme to ensure domestic consumers have clarity on energy costs after 31 March next year
• additional targeted support to be delivered to support vulnerable consumers who are already struggling to pay their bills and heat their homes
• doing more to support households across Scotland who rely on alternative fuels to heat their homes
• clarify protections for businesses following 31 of March 2023 as soon as possible to ensure businesses in Scotland have the certainty and security they need to operate with confidence, while identifying 'vulnerable non domestic customers' and offering all vulnerable SME’s guaranteed support past March 2023

FM hosts energy summit - gov.scot (www.gov.scot)