ENERGY firms are working with the Scottish Government to deliver a “social tariff” that could cut fuel bills for vulnerable customers.
Ministers are working with E.On, EDF Energy, Scottish Gas (Centrica) and consumer organisations on a new working group which aims to design the special tariff – which is hoped could provide more affordable energy for those in need.
The move comes after the Scottish Government’s climate action minister Alasdair Allan chaired a roundtable event to consider what could be done to help those struggling with energy costs.
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The Scottish Government’s decision to replicate the UK Government in scrapping the Winter Fuel Payment for those not in receipt of benefits is estimated to impact around 250,000 people, according to charity Age Scotland.
We told how Chancellor Rachel Reeves is facing calls to reverse the cut, after it was revealed she was handed a £10 billion Budget boost by the Bank of England.
Scots are also facing higher energy bills after watchdog Ofgem confirmed it was increasing its price cap, meaning the average household energy bill is set to increase by £149 from October.
On the new social tarrif, Allan said: “The Scottish Government has repeatedly called for a social tariff for those who need it the most, including those in extreme fuel poverty.
“It’s great news therefore that the energy suppliers and consumer organisations have agreed to work with us on this.”
The minister accepted there is “some way to go” before a social tariff – which would see certain customers charged a reduced rate for their gas and electricity – becomes a reality.
He said: “This is a real step forward and could produce a model for fairer energy pricing not just in Scotland but in other nations too.”
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Allan added that timescales for the new working group are to be agreed shortly but that the Scottish Government “recognise[s] the urgency in delivering extra support for consumers struggling with their energy bills”.
He continued: “We remain committed to working closely with the UK Government, Ofgem, suppliers and consumer organisations, advocating for the delivery of a social tariff across Great Britain.”
Gillian Martin (below), acting Energy Secretary in the Scottish Government, wrote last year to the previous UK government, setting out the principles ministers at Holyrood think should be key features of a social energy tariff.
She made clear the Scottish Government believes such a scheme should be used to provide additional support for customers rather than acting as a replacement for existing forms of support.
Ministers at Holyrood agree any new social tariff should be applied automatically to anyone in receipt of means-tested benefits – but could also help those on low incomes who just miss out on qualifying for benefits and who are at risk of fuel poverty.
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People who have high energy bills because they need to use medical life-saving equipment for long-term conditions should also be eligible for any such scheme, the Scottish Government believes.
Meanwhile, Andrew Bartlett, chief executive of Advice Direct Scotland, which has been campaigning for a UK-wide social energy tariff, said: “It is very encouraging that energy suppliers are willing to get around the table and help design a workable social tariff, which we believe is the best way of fixing the UK’s broken energy market.
“To be truly effective, struggling households should automatically be placed on the cheapest energy deal through an opt-out system, so they do not have to take any action to benefit.
“The need for action is urgent, especially given that energy prices are about to increase as winter approaches, pushing millions of people into the desperate position of being unable to afford to heat their homes once again.
“We hope that this new working group can show the UK Government that an opt-out social energy tariff is both workable and essential, giving it fresh impetus to act.”
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