Why are energy bills going up?
THE energy price cap rise has sparked fury across the board – with thousands demanding to know how they are going to keep the heating on and food on the table and if they can afford to do both.
Households are bracing for an average increase in their energy bills of £693 as gas prices soar to record levels.
Bills are set to rise after the energy regulator Ofgem decided it would raise the price cap on energy to a record £1971.
READ MORE: Millions face HUGE £693 energy bill rise in April, Ofgem confirms
Chancellor Rishi Sunak promised a £200 loan for households to meet the record costs but this has come under fire as a “sticking plaster” measure.
Home finance expert Martin Lewis explained on his website moneysavingexpert.com how the cut – which will be applied to everyone in the UK – must be repaid after April 2023, resulting in a compulsory £40 per year increase in bills for five years.
Citizens Advice Scotland (CAS) has pointed out “people are still going to face higher bills even with the proposed support”.
An interest rate rise has contributed to what CAS called a “nightmare scenario” for Scottish households, food prices and energy bills are all set to soar.
What could the Chancellor have done differently?
Alison Thewliss, the SNP’s shadow chancellor, called on Sunak to change the loan to a grant, warning the Government “risks letting the growing cost of living crisis spiral completely out of control”.
READ MORE: Tory 'sticking plaster' support for hard up households slammed
The Glasgow Central MP also demanded the Chancellor delivered a “real package of support”, including introducing a major energy grant, reversing its cuts to Universal Credit, matching the Scottish Child Payment UK-wide, and bringing forward a Real Living Wage.
CAS’s fair markets spokesperson Michael O’Brien called on the Scottish Government to deliver the Barnett consequentials – some £290 million – from Sunak’s package of mitigation measures to be targeted at poorer households “who are already really struggling”.
Earlier this week, the Labour Party called for a windfall tax on energy giants like Shell – which posted annual profits of $17 billion on Thursday.
The French government forced the state energy company to take an €8.4bn hit to limit bill rises to 4% at the end of January. Energy Secretary Kwasi Kwarteng told MPs in September the Government could mimic Spain’s €3bn tax on energy companies but this appears not to have materialised.
READ MORE: 'Nightmare scenario': Energy bill hike risks more Scots turning to food banks
What is the Scottish Government doing?
Nicola Sturgeon has pledged “every single penny” received by Scotland from council tax and energy bill rebates will be spent supporting people struggling to cope with the cost of living.
She said the Chancellor’s steps were “welcome” but insisted they did “not go far enough”.
The First Minister added: “They seem to offer around £350 of help against energy bill increases of around £700.
READ MORE: 'English nationalist cult': Ex-Tory chair in blistering attack on party under Boris Johnson
“I also do not yet know what the position on consequentials will be, but I give the commitment, assuming that there are the consequentials that I expect, that every single penny will go towards helping people in Scotland to deal with the cost of living crisis.”
Noting the £150 reduction in council tax for homes in England for properties in bands A-D, Sturgeon noted people living in band C properties in Scotland already paid £525 less on average than south of the border.
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