Ministerial roundtable on energy consumer issues: Letter to UK Government

FROM: Dr Alasdair Allan, Minister for Climate Action

TO: Miatta Fahnbulleh MP, Parliamentary Under-Secretary of State for Energy Consumers, Department for Energy Security and Net Zero 

Dear Miatta,

I am writing to provide advance notice that I will chair a ministerial roundtable on energy consumer issues on Thursday 12 September.

Last year, Gillian Martin chaired three working groups to discuss the energy price crisis and its impacts on vulnerable (priority), rural and non-domestic consumers in Scotland. Those meetings identified collaborative actions that the Scottish Government and our partners could progress, within the devolved settlement, to support consumers struggling with their energy bills. The groups also informed Gillian Martin’s letter to the previous UK Government in November 2023 which called for more meaningful support during the energy crisis, particularly towards fuel poor households, and action to fix the retail energy market.

Over the course of the summer, my officials have engaged with energy suppliers as well as consumer and business organisations on the issues, notably how best to support consumers with prices and debt, the decommissioning of the Radio Teleswitch Service (RTS), and standing charges. We have also discussed the issue of void properties and the need to reconnect meters and manage debt to allow households to move into vacant homes more quickly. This work has been incredibly valuable and will help us to build on progress and agree practical solutions.

The Scottish Government repeatedly called on the previous UK Government to deliver a social tariff mechanism for those who need it the most, including those in extreme fuel poverty. It is clear from recent engagement that there continues to be widespread support across the energy and consumer sectors for the introduction of such a mechanism, and I am looking forward to discussing next steps at the roundtable in September.

The Scottish Government will also carefully consider the outcome of Ofgem’s recent consultations on debt and standing charges. I remain of the view that standing charges must be reformed to ensure a fairer and more equitable system where those generating renewable energy – particularly rural and island communities – are not faced with higher-than-average charges.

I would like to restate the Scottish Government’s commitment to working with the UK Government, energy suppliers, Ofgem, and the third sector to develop detailed and deliverable proposals for a social tariff. However, all of the above must be underpinned by meaningful market reform.

I recognise the need to consider retail market reform in conjunction with wholesale market reform and proposals taken forward in the Review of Electricity Market Arrangements (REMA). This includes understanding how a social tariff mechanism – along with efforts to rebalance gas and electricity prices – would interact with proposed wholesale market reforms.

Finally, you will be aware of the forthcoming decommissioning of the Radio Teleswitch  Service (RTS) and the potential for disruption to meter connectivity across the UK, particularly in rural and island communities. Suppliers have highlighted an issue with trust in the system as they look to transition affected consumers onto smart meters or appropriate alternatives. I am keen that the Scottish, Welsh and UK governments work together with Ofgem and consumer advocacy and advice organisations to raise awareness of the RTS switch-off and communicate the benefits of smart meters from trusted voices.

I am looking forward to working closely with you over the coming months and years on our joint goal of supporting energy consumers in the retail energy market, including through driving improvement to the energy efficiency of our housing stock, in order to tackle fuel poverty and ensure our energy market is fit for purpose as we transition towards net zero. 

I will write to you again, following the roundtable, with proposals for collaborative working and would be grateful to meet with you prior to the UK budget statement on 30 October to discuss the issues and identify joint priorities which recognise the specific needs of Scottish consumers.

Yours sincerely,

Alasdair Allan