THE First Minister is to hold an “urgent” summit with energy firms amid concerns that more than one-third of Scottish households will be in fuel poverty come October.
UK energy regulator Ofgem is due to announce a rise in the price cap on August 26 – to come into effect on October 1 – with fears this could be as high as £3580, an 80% increase on the current £1971 price cap.
Ofgem has estimated that the rise will be slightly smaller, but still take the price cap up to £2800 (a 42% increase) from October. The Edinburgh government said that even this lower rate could put as many as 36% of Scottish households into fuel poverty, meaning that they spend more than 10% of their income on energy after housing costs have been deducted.
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First Minister Nicola Sturgeon – who previously called for the UK Government to intervene and prevent the price cap going up – has said that a summit with energy firms and consumer groups will be convened to discuss the issue.
Her government said that major energy suppliers including Scottish Power, OVO Energy, Centrica, Octopus, and E.ON, as well as industry bodies and key consumer and poverty organisations, will attend. While no date for the meeting has been confirmed, it will be before any price cap rise is announced on August 26.
Announcing the meeting, the First Minister again called on the Tory government to “take action now”, saying key levers to tackle the crisis lay in their hands.
A similar meeting held between outgoing prime minister Boris Johnson and energy suppliers earlier in the month led to no new support for struggling households.
Sturgeon said: “I know that this is an incredibly unsettling time for households and energy consumers across Scotland and the Scottish Government will continue to do everything we can to support those affected.
“There is a not a single solution to this problem and government, industry and the third sector in Scotland needs to work collaboratively together to ensure the right support is in place for householders and businesses during this challenging winter. This could include improving the availability of help and advice and considering a more compassionate approach to debt management.
“However, it remains the case that the powers and resources needed to tackle this emergency on the scale required – access to borrowing, welfare, VAT on fuel, taxation of windfall profits, regulation of the energy market – lie with the UK Government. Only the UK Government can access and make available resources on the scale required. They need to take action, now.
“As I said last week, a first step would be to cancel the energy price cap rise this autumn.”
Frazer Scott, CEO of Energy Action Scotland, said: “With our colleagues at the Poverty Alliance, we welcome the First Minister’s intervention in gathering energy companies together to talk about how we can best support households struggling to afford spiralling energy bills.
“Fuel poverty will affect over one million Scottish households this winter requiring urgent intervention focussed on targeting those most in need.
“Cold, damp homes affect health and wellbeing and will put thousands of lives at risk as well as adding additional pressure to the NHS, making this a vital intervention for Scotland.”
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Scott’s estimate of fuel poverty affecting more than one million homes is worse than the Scottish Government’s, which said it calculated that 906,000 households will be in fuel poverty in October 2022, based on an Ofgem price cap of £2800 and taking into account previously announced government mitigations.
Peter Kelly, the director of The Poverty Alliance, also welcomed the news, adding that lives would be at risk if no action was taken to address the energy crisis before winter.
“The situation could scarcely be more urgent,” he added.
“But it is a situation we can do something about, by taking action to protect people most at risk of poverty and deeper hardship. It is that much-needed and urgent action that we are hoping the summit can bring about.”
The news comes as energy campaigners from Scotland’s Highlands and Islands teamed up with Good Law Project to threaten Ofgem with legal action should they fail to take action to protect the most vulnerable from skyrocketing energy bills.
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