Fuel Insecurity Fund extended to help fuel poor households
Thousands of vulnerable households will be supported by the continuation of the Scottish Government’s uprated £20 million Fuel Insecurity Fund.
Announced as part of last week’s Scottish Budget 2023-24, the investment will enable third sector partners to continue to provide support to households who are at risk of self-disconnection or self-rationing their energy use.
While the Scottish Government remains committed to engaging with the UK Government to deliver a referendum on Scottish Independence, funding that was originally earmarked for a referendum in 2023 will now be used to help tackle fuel poverty.
Last week’s Scottish Budget included additional steps to address inequality while tackling the climate emergency including increased investment of over £366 million next year to support the delivery of the Heat in Buildings Strategy. It forms part of a package of measures introduced by the Scottish Government to protect the most vulnerable households from the impact of the current cost of living crisis.
The decisions taken through the Emergency Budget Review in November enabled the Scottish Government to provide additional immediate support to people most impacted by the cost of living crisis, specifically rising energy prices, by doubling the Fuel Insecurity Fund to £20 million this year. The Scottish Budget is now protecting that investment into 2023-24.
First Minister Nicola Sturgeon and Minister for Zero Carbon Buildings Patrick Harvie met with people on the frontline of tackling fuel poverty, while visiting the Wise Group in Glasgow, a social enterprise working to lift people out of poverty by providing mentoring support to help with employment and life skills and offering energy advice.
First Minister Nicola Sturgeon said: “People across our country are paying a steep price for the economic mismanagement of the UK Government, with the cost of living forcing many to choose between heating their home or eating – the Fuel Insecurity Fund aims to stop that happening.
“The Scottish Government has, and always will, use its currently limited powers to the maximum extent in order to meet the challenges being faced by the people of Scotland right now. Powers relating to energy markets are reserved to the UK Government, so I am renewing my call for further and more urgent action, to support the most vulnerable households.
“With this intervention – as with many others the Scottish Government has set out – we are having to divert funding into policies that aim to minimise the impact on people as a direct result of UK Government policy.
“The full powers of independence would enable us to make different choices and help people facing the devastating consequences of the cost of living crisis.”
Minister for Zero Carbon Buildings and Tenants’ Rights Patrick Harvie said: “Everyone needs a safe, warm and affordable place to call home and yet despite this we know that many people are struggling under the weight of their energy bills and wider cost of living pressures.
“Last week, the Scottish Budget confirmed £366m for insulating homes and buildings and tackling fuel poverty as part of our £1.8 billion commitment to Heat in Buildings over this Parliament.
“That is essential work to make sure that Scotland has warmer homes which are cheaper to heat for decades ahead. We also need the full range of powers on matters like energy pricing, consumer protection and energy supply to make the biggest possible difference.
“But right now, the Fuel Insecurity Fund is a lifeline to many people struggling most with fuel poverty which is why we have made the commitment for next year.”
There are now an estimated 860,000 fuel-poor households in Scotland following the latest increase in energy bills on 1 October
As more and more people across the country continue to worry about the cost of living, Zero Carbon Buildings Minister Patrick Harvie wants people living in Edinburgh to know that free impartial advice and financial support is available to help make home energy improvements.
Home Energy Scotland’s ‘Warmer Homes Scotland’ programme could provide funding of up to £5,000 to help support homeowners in Edinburgh to make their homes warmer, greener and more efficient to heat. This latest Scottish Government campaign aims to raise awareness of the support available to tackle energy bills and fuel poverty.
Commenting on the launch of the Home Energy Scotland 2022/23 campaign, Zero Carbon Buildings Minister Patrick Harvie said: “Many people across the country including Edinburgh continue to worry about the cost of living crisis and the big rise in energy bills caused by surging gas prices.
“Our latest estimates indicate that there are around 860,000 fuel-poor households in Scotland, of which 600,000 will experience extreme fuel poverty, following the latest increase in energy bills on 1 October.
“We are making sure that anyone in Edinburgh worried about or struggling to pay their energy bills can get the right support and advice.
“Our Home Energy Scotland service, delivered by the Energy Saving Trust, provides free and impartial advice, support and funding to help households in Scotland to better insulate their homes saving on energy costs while at the same time reducing their impact on the environment.
“The Home Energy Scotland team are on hand to advise how our Warmer Homes Scotland programme could provide funding of up to £5,000 to help make your home warmer, greener and more efficient to heat.
“A range of measures – big and small – to improve energy efficiency around your home are likely to be available, and I’d urge all households to find out more and get advice as soon as possible.”
Chancellor urged not to pass on costs to struggling households
The UK Government is being urged by the devolved governments to fund its cap on energy prices through a windfall tax, not higher borrowing.
In a joint letter to the new Chancellor of the Exchequer Kwasi Kwarteng (below), Deputy First Minister John Swinney is joined by Finance Ministers from Wales and Northern Ireland in calling for more targeted support to those impacted the most by the cost of living crisis.
They express their concern that more action is needed to prevent further hardship for households and businesses and say support “should be funded by targeting the windfall gains in the energy sector rather than passing on the cost through higher borrowing”.
The Finance Ministers also call for additional funding to support vital public services in the face of rising prices, energy costs and wage pressures as devolved settlements are worth considerably less in real terms than last October when they were set.
The joint letter reads:
Dear Kwasi,
We want to jointly congratulate you on your new role as Chancellor of the Exchequer. We are committed to working constructively with you and the new UK Government. A productive working relationship will be essential to tackle the economic crisis facing our citizens, communities and businesses.
We wrote to your predecessor on 15 July outlining our considerable concerns with the worsening economic situation in the UK including the cost crisis, funding for public sector pay and the impact of inflation on the Devolved Governments’ budgets. Our letter has been included as an annex here.
The Prime Minister’s announcement of 8 September limiting increases in energy bills will alleviate some of the anticipated additional pressures on households and businesses. However, it is important to recognise that overall this is an expensive package of measures that does not target support to those who need it most. We are deeply concerned at who will bear the brunt of these costs. Support should be funded by targeting the windfall gains in the energy sector rather than passing the cost to households through higher borrowing.
Looking ahead to your forthcoming fiscal statement, we urge you to focus efforts on those most impacted, not just relying on blanket interventions which do not recognise the scale of hardship particular households are facing. An extended and targeted support package needs to be provided to help those who, even with the cap, are facing the impossible choice between heating their homes and feeding themselves and their loved ones. Even with the price cap, energy costs are still double what they were last year.
In addition to households, early clarity and additional support is also required for businesses and the third sector, who are facing substantial challenges. The current measures provide businesses with only a temporary respite and little certainty to help them plan for the future. Many organisations would be forced to close if they are not supported.
Ministers in the Devolved Governments have exhausted the options available to us to address the cost crisis, stretching every pound available to us to provide support. The main levers that can make a difference are held by the UK Government and it must now take urgent steps to use these to provide much needed certainty to those suffering hardship and poverty.
The crisis has also resulted in a major squeeze on funding for public services and increases in demand. Additional funding is urgently needed to support our vital public services in the face of rising prices, energy costs and wage pressures, alongside unforeseen pressures. Based on recent inflation and widespread inflationary expectations for the next year or two, our respective three-year spending review settlements are worth considerably, potentially billions, less in real terms than when we received them last October.
Further, Russia’s unprovoked invasion of Ukraine has resulted in many Ukrainians seeking safety across the UK, however it is necessary to increase the funding available to support them here. In particular, there is a lack of parity in the funding available for those arriving under the Ukraine Family Scheme and the Ukraine Sponsorship Scheme, which cannot be right. ‘Thank You Payments’ to host families should also, in line with Lord Harrington’s recommendation, be doubled to ensure that those who have opened their homes to Ukrainians do not lose out financially as a result.
We would welcome early engagement and clarity on planned fiscal events to enable us to set out the implications for the devolved nations and effectively plan our own budgets, which are significantly impacted by UK spending and tax decisions.
Collaborative working between the UK Government and the Devolved Governments in a spirit of mutual respect would be of benefit to all of us.
Given that, now overdue, action is required to tackle the crisis we propose a quadrilateral meeting with the Chief Secretary to the Treasury as soon as possible and in advance of the FISC to agree the immediate steps that must be taken to tackle this issue and support households, businesses and the public sector.
This letter has been copied to the Chief Secretary to the Treasury and the Secretaries of State for Scotland, Wales and Northern Ireland.
Yours sincerely,
John Swinney BPA/MSP
An Leas-phrìomh Mhinistear agus Ath-shlànachadh Cobhid, Riaghaltas na h-Alba
Deputy First Minister and Cabinet Secretary for Covid Recovery, Scottish Government
Rebecca Evans AS/MS
Y Gweinidog Cyllid a Llywodraeth Leol, Llywodraeth Cymru
Minister for Finance and Local Government, Welsh Government
AFTER weeks of growing pressure, the Government has finally announced it will step in to help households and businesses from soaring energy prices.
Under new plans announced by Liz Truss, a freeze will protect tens of millions from bills hitting unmanageable levels.
But the policy, the first major move of Ms Truss’ premiership, comes at a cost. Not just will the Government have to find an estimated £150bn to fund the scheme. There are also fears that many energy providers could look to ration fuel if households don’t reduce their usage over the Winter.
Over the last few weeks, we’ve been bombarded with advice on how to save money on our bills.
Here energy saving expert Jonathan Rolande, from House Buy Fast, condenses them into a brilliant a-z guide which could help households to save thousands of pounds a year.
Jonathan said: “The reality is the full impact of the cost of living crisis is yet to kick in and the full impact of the squeeze will probably be most acutely felt in the next few weeks.
“But there are steps you can take to save money which, if you introduce now into your daily lives, can also help you save money for the rest of your life.”
Here’s Jonathan’s A-Z guide on saving money:
Avoid tumble dryers. They use a shocking amount of energy, and can cost upwards of £300 a year to run based on usage twice a week. You can easily work out how much it costs to run a tumble dryer yourself based on your specific model if you know the kWh. As a more cost-effective alternative consider drying clothes outside on a washing line or even investing in a heated clothes airer which usually costs around 6p an hour to run.
Bleed your radiators. Not only will it release pressure on your finances, trapped air can make your radiators less efficient, so they’ll be slower to heat up.
Draw the curtains. It sounds simple but failing to do so means you can lose a lot of heat at night in every room.
Dusty condensing coils behind your fridge and freezer, which are used to cool and condense, can trap air and create blockages. This is not what you want. Keep them clean and they’ll stay cool and use less energy.
Exhaust fans around the home cost a fortune. Turn off kitchen or bath exhaust fans as soon as possible after you’ve used them.
Fill it up. Don’t worry I’m not referring to the petrol tank. Fill up the washing machine and dishwasher. Research by Thames Water and Gov.uk recently found that 68 per cent of households are only putting the dishwasher and washing machine on when they are completely full in a bid to save energy. It is a savvy move to wait until a washing machine or dishwasher is full as the appliances will use the same amount of energy to clean fewer items. So it’s smarter to wait to do fewer washes with more items, than waste energy on more half full washes.
Going away on holiday or a business trip? Make sure to turn off your water heater while you are gone. Otherwise it will keep heating the water in a “standby mode” costing you money in the process.
Hive is, in my opinion, the best energy saving app on the market right now. Use the app to keep track of what’s happening at home and set schedules or switch any home electrical device on or off rather than leaving them on standby.
Insulate your loft. I know it’s probably a job you’ve had on the to-do list for a long-time but now is the perfect moment. You can save hundreds of pounds a year by creating better insulation up there.
Things may be tight, but consider treating yourself to a jacket – for your boiler… The best come with a recommended thickness of 75mm and help keep your water hotter for longer and reduce your energy bills. A new one is easy to fit – the materials will only cost you about £25 and it could save upwards of £100-£150 a year.
The kitchen is a great place to cook up money saving methods. Consider using slow cookers and pressure cookers during the spending squeeze. They are more economical and you can batch cook dishes like stews, curries and soups that will last for days.
Loft hatches are the forgotten item when it comes to energy saving plans. Attach insulation to the top of it and create a seal with draught proofing around the perimeter. So many people spend a huge amount insulating their lofts, but neglect the loft hatch completely meaning lots of heat escapes up through the hatch. If you are looking for a really simple way to save energy in the home, then ensuring the loft hatch is adequately insulated and draught proofed is a great way to get started.
My Earth App is one of my favourite go-to apps at the moment. Originally created by researchers and students at the University of Wisconsin-Madison School of Human Ecology, the app is designed to help you keep track of your personal energy usage, your savings and your total impact. The app contains five main categories: electricity, recycling, travel, food and usage. It includes day-to-day activities to measure how environmentally friendly your actions are. These activities can range from small measures like recycling your glass bottles to larger tasks like switching your appliances with energy-efficient replacements. It also includes a diary for users to check off their activities and lets you visualise how small steps can add up to a bigger impact environmentally.
Nighttime rates are a must during this ongoing credit crunch. A few energy providers charge less for using electricity at certain times of day or night). These off-peak hours tend to be quieter periods when power demand is at its lowest, for example between 8pm and 8am. The name for this type of charging approach is time of use tariffs. The amount you pay depends on the time of day you use electricity. Ask your provider.
Nothing makes life better than a brew. But don’t overfill the kettle. Boiling more water than necessary each time could save you £36 year, based on calculations from the Energy Saving Trust.
Kettles will vary in the amount of energy they use, but you can easily work out how much it costs to boil a kettle by checking the wattage and price you pay for energy per pence/kWH.
Print on both sides of paper. A friend of mine suggested this to me last year and within a few months I’d saved a packet on my printer ink costs. So many of us now work from home and most schoolchildren need to print off work. By switching your printer settings to double-side you can save money double quick.
Flick on the quickwash settingon a dishwasher. The longer washers soak plates at a lower temperature so are cheaper
Radiators are generally set too high in most homes. turn the thermostat down in unused rooms. If you lower the temperature of your radiator down by just one degree you can save £55 a year.
Showers….Look, I’m not going to force you to get in and out in four minutes. If you can, great. One minute less in the shower could save you up to £80 annually.
But there are other things you could do too – like fitting a water-efficient shower head.
The Energy Saving Trust predicts that a water-efficient shower head could save a household up to £195 a year. One minute less in the shower could save you up to £80 annually.
Modern shower heads use current-limiting technology to save up to 40 per cent water usage, while showering under normal water pressure. This will cost you around £20-£40, but will save you in the long run.
Install tap aerators. These ‘inject’ air into the water as it comes out the tap, so while it looks like there is no impact on the flow rate, a fraction of the water is used. These are especially useful if you are on a water meter.
USwitch, Compare the Market and other comparison sites are a must at the moment. Look at them regularly – once a fortnight if you can – as they will help you check to make sure you’re on the correct tariff
The vehicles we own are increasingly being powered by electricity. Aim to charge your car overnight when you could benefit from a cheaper night-time rate for your power.
Wasting power is a no-no in the current climate and leaving appliances on standby is like pouring money down the drain. It’s widely reported that the average household could be wasting as many as 7,374 hours of electricity every year when a device is left on standby.
It’s easy to do. For example, many of us disconnect our phones but leave the charger plugged in. And some devices, such as TVs, don’t have an easily accessible on-off switch.
But leaving devices on standby uses up power – sometimes known as ‘vampire energy’ – and over the course of a year it can really add up.
These are some indicative annual savings, found particularly among older devices:
· Turning off the light in an unused room – £25
· Television – £16-24
· Set-top box – £20-23
· Games devices – £16
· Smart speakers – £3.45 per speaker
· Microwave – £16
And if you’re working from home, don’t forget about office equipment:
· Printers (particularly those with LED displays) – £3-4 a year
· Laptops – £5 (but make sure you shut down and switch off rather than simply closing the lid)
X4 – that’s the amount more you pay for electric heating compared to gas. If you don’t have a choice opt for infrared or if funds allow, try and push for a heat pump – these two types of electric heating are by far the most efficient.
Yellow light bulbs and other LED saving options are just a great way of saving cash. You can save £2-3 per year for every traditional halogen bulb you switch to a similarly bright LED bulb. If the average UK household replaced all of their bulbs with LEDs, it would cost about £100 and save about £40 a year on bills.
Replacing a 50W halogen with an LED equivalent could cut your energy costs by £75 over the lifetime of the bulb – not including the price all the replacement halogen bulbs you no longer need to buy; of a typical LED costs between £2.50-12.
Zap-map is a brilliant new app. It lists and regularly updates electric charging points for cars. You can download it for free and find available charge points locally by searching the most comprehensive database of charging points, plan journeys, share updates and pay for charging on participating networks.It allows you to locate the 33,000 publicly available charging points in the UK when you are out and about, taking the stress out of electric vehicle driving.
Prime Minister Liz Truss’s opening speech on the energy policy debate in the House of Commons yesterday:
Earlier this week I promised I would deal with the soaring energy prices faced by families and businesses across the UK. And today I am delivering on that promise.
This Government is moving immediately to introduce a new Energy Price Guarantee that will give people certainty on energy bills.
It will curb inflation and boost growth.
This Guarantee – which includes a temporary suspension of green levies – means that from 1st October a typical household will pay no more than £2,500 per year for each of the next two years, while we get the energy market back on track.
This will save a typical household £1,000 a year. It comes in addition to the £400 Energy Bills Support Scheme.
This Guarantee supersedes the Ofgem price cap, and has been agreed with energy retailers.
We will deliver this by securing the wholesale price for energy, while putting in place long-term measures to secure future supplies at more affordable rates.
We are supporting this country through this winter and next, and tackling the root cause of high prices, so we are never in this position again.
For those using heating oil, living in park homes or those on heat networks, we will set up a fund so that all UK consumers can benefit from equivalent support.
We will also support all businesses, charities and public sector organisations with their energy costs this winter – offering an equivalent guarantee for 6 months.
After those 6 months we will provide further support to vulnerable sectors, such as hospitality, including our local pubs.
My Rt Hon Friend the Business Secretary will work with businesses to review where this should be targeted to make sure those most in need get support. This review will be concluded within 3 months, giving businesses certainty.
In the meantime, companies with the wherewithal need to be looking for ways they can improve energy efficiency and increase direct energy generation
We will be bringing forward emergency legislation to deliver this policy. And my Rt Hon Friend the Chancellor of the Exchequer will set out the expected costs as part of his fiscal statement later this month.
I can tell the House today that we will not be giving in to calls for this to be funded through a windfall tax.
That would undermine the national interest by discouraging the very investment we need to secure home-grown energy supplies. You can’t tax your way to growth.
Instead, we are taking an approach which is pro-growth, pro-business and pro the investment we need for energy security.
This is the moment to be bold. We are facing a global energy crisis and there are no ‘cost-free’ options.
There will be a cost to this intervention. However we are also acting immediately to defray the cost of this intervention in three ways.
Firstly, by ramping up supply.
Following on from the successful vaccine taskforce, we have created a new Energy Supply Taskforce under the leadership of Maddy McTernan.
They are already negotiating new long term energy contracts with domestic and international gas suppliers to immediately bring down the cost of this intervention.
We are also accelerating all sources of domestic energy, including North Sea oil and gas production.
We will be launching a new licensing round, which we expect to lead to over 100 new licences being awarded.
And we will speed up our deployment of all clean and renewable technologies including hydrogen, solar, carbon capture and storage, and wind… where we are already the world leader in offshore generation.
Renewable and nuclear generators will move onto Contracts for Difference to end the situation where electricity prices are set by the marginal price of gas.
This will mean generators are receiving a fair price, reflecting their cost of production, further bringing down the cost of this intervention.
Secondly, today’s action will deliver substantial benefits to our economy, boosting growth which increases tax receipts and gives certainty to business.
This intervention is expected to curb inflation by up to 5 percentage points, bringing a reduction in the cost of servicing government debt.
Thirdly, this morning, together with the Bank of England, we will set up a new scheme, worth up to £40 billion, to ensure that firms operating in wholesale energy markets have the liquidity they need to manage price volatility.
This will stabilise the market and decrease the likelihood that energy retailers need our support, like they did last Winter.
By increasing supply, boosting the economy and increasing liquidity in the market we will significantly reduce the cost to government of this intervention.
As well as dealing with the immediate situation we face, we are also dealing with the root causes.
Energy policy over the past decades has not focused enough on securing supply.
There’s no better example than nuclear, where the UK has not built a single new nuclear reactor in 25 years.
It’s not just about supply. The regulatory structures have failed, exposing the problems of having a price cap applied to the retail but not the wholesale market.
All of this has left us vulnerable to volatile global markets and malign actors in an increasingly geopolitical world.
That is why Putin is exploiting by weaponising energy supplies as part of his illegal war on Ukraine.
So as well as the action we are taking today on bills, we will use the next 2 years to make sure that the United Kingdom is never in this situation again.
I will be launching two reviews.
Firstly, a review of energy regulation to fix the underlying problems. We want a new approach which will address supply and affordability for the long term.
Secondly, we will conduct a review to ensure we deliver net zero by 2050 in a way that is pro-business and pro-growth. This review will be led by my Rt Hon Friend the member for Kingswood.
We are delivering a stable environment that gives investors the confidence to back gas as part of our transition to net zero.
We will end the moratorium on extracting our huge reserves of shale, which could get gas flowing in as soon as six months, where there is local support.
We will launch Great British Nuclear later this month – putting us on the path to deliver up to a quarter of our electricity generation with nuclear by 2050.
As a result of these steps on shale and nuclear and the acceleration of renewables, I am today setting a new ambition for our country.
Far from being dependent on the global energy market and the actions of malign actors, we will make sure the UK a net energy exporter by 2040.
And my Rt Hon Friend the Business Secretary will set out a plan in the next two months to make sure we achieve this.
I know businesses and families are very concerned about how they will get through this winter.
That’s why I felt it was important to act urgently to provide immediate help and support, as well as setting out our plan about how we are going to secure the UK’s future supplies.
This is part of my vision for rebuilding our economy.
Secure energy supply is vital to growth and prosperity. Yet it has been ignored for too long.
I will end the UK’s short-termist approach to energy security and supply once and for all.
That is what I promised on the steps of Downing Street.
Today we are acting decisively to deliver that pledge.
This will help us build a stronger, more resilient and more secure United Kingdom.
I commend this motion to the House.
UK GOVERNMENT BORROWING MORE TO BOLSTER OIL COMPANY PROFITS
Environmental campaigners have reacted to the UK Government plans for an energy price freeze funded by borrowing.
The UK Government will open a new licensing round for the North Sea next week, and is expected to give out over 100 permits for companies to look for more climate-wrecking oil and gas. This is despite climate science and energy experts warning that any new oil and gas projects will push the world well past dangerous climate limits.
Independent advisors have made it clear that increasing UK supply of oil and gas will have almost no impact on UK bills as prices are set by the international market.
Liz Truss also announced that her Government will lift the moratorium on shale gas. Scotland has a de facto ban on fracking.
In the first 6 months of 2022, 5 oil companies made over £80 billion in profits: Shell £16.6bn, BP £12.2bn, Exxonmobil £21.7bn, TotalEnergies £15.2bn, Chevron £14.5bn.
Friends of the Earth Scotland’s head of campaigns Mary Church said: “The impact of measures announced today to stop the immediate rise in household bills is welcome, but the approach taken by the new Prime Minister singularly fails to address the fundamental problems of a broken energy system that serves only to enrich oil company bosses and shareholders.
“The money the UK Government is borrowing will be pumped straight into the coffers of oil companies when it could have helped deliver the transition to clean, reliable renewables. People in the UK are being robbed by fossil fuel companies but instead of making them pay for the harm they are causing, Liz Truss has decided to borrow more money to keep paying the robbers.
“This energy price crisis is being driven by the price of fossil fuels and the only sure fire to prevent this happening again is a rapid and fair transition to renewable energy and a scaling up of energy efficiency.”
+ NORTH SEA OIL & GAS LICENCES “Burning oil and gas is driving the climate emergency that sees tens of millions displaced by floods in Pakistan and has brought extreme heatwaves and drought across the UK. The UK Government is denying the reality of climate change by encouraging companies to seek out more fuel for the fire that is engulfing the world.
“The Scottish Government must be willing to stand up to these reckless plans to expand fossil fuels and hand out more licences for oil and gas companies to explore and drill in the North Sea. Ministers at Holyrood must speak out and use all the tools at their disposal to block any plans to further lock us into the oil and gas that is driving both the climate and cost of living crises.”
+ FRACKING “The move to try reopen and force through fracking is a disgrace. Not only is the industry incredibly harmful in climate terms it also brings with it serious local health and environmental risks. Its laughable to suggest that fracked gas will deliver within 6 months. Communities have already successfully fought and stopped it in Northern Ireland, England and Scotland so wherever this dirty dangerous industry is proposed, it will be opposed once again.”
Commenting on the proposals announced by the government today to support households and businesses with energy bills, TUC General Secretary Frances O’Grady said: “Freezing energy bills this autumn is essential for families and to protect jobs and businesses.
“But the Prime Minister is making the wrong people pay. She should have imposed a much larger windfall tax on profiteering oil and gas giants. And she should have required all firms getting help with energy bills to commit to no lay-offs for the lifetime of the help, to protect livelihoods.
“And it’s not just energy bills soaring – so she needs to do more to help families get through the winter. That means a real plan to get wages rising, a big boost to universal credit, child benefit and pensions, and a massive rollout of home improvements to cut bills. And it’s time to bring energy retail into public ownership to make sure this crisis never happens again.”
The TUC says that the government should set out a programme to make UK living standards more resilient and the UK economy more resistant to a future crisis. This should include:
Increase the windfall tax to a fairer level relative to the excess profits oil and gas firms are making.
Rapid rollout of home energy efficiency and taking the energy retail companies into public ownership – including a new approach to energy pricing with a free band of energy to cover basic lighting, heating, hot water and cooking.
A plan to get pay rising for all workers – including stronger pay bargaining rights so that working people and their unions can make fair pay agreements across whole industries.
Increase the minimum wage to £15 an hour as soon as possible – by returning the UK to normal wage growth and having a more ambitious minimum wage target.
Social security that prevents poverty – universal credit and benefits should be raised to 80 percent of the national living wage, along with a significant boost to support for families with children.
Commenting on the Prime Minister’s decision to end the moratorium on fracking, Tom Fyans, director of campaigns and policy at CPRE, the countryside charity, said: ‘Giving fracking the green light is a hideous mistake.
“If the purpose is to tackle bank busting gas prices, it’s an exercise in futility. Even if we were to go full steam ahead on fracking, which nobody wants, least of all rural communities, it wouldn’t make a dent on the cost of energy anytime soon, or ever.
‘Any move to industrialise the countryside and belch yet more fumes into our carbon-soaked atmosphere will prompt a furious response from local communities, drawn out planning delays and nationwide protests. Hardly a proposal to keep families warm this winter, or lower bills in the future.
‘The new Chancellor got it right in March, when he said fracking “would take up to a decade to extract sufficient volumes — and it would come at a high cost for communities and our precious countryside.” Nothing has changed.
‘Proposals to offer local people discounts on their bills in exchange for environmental destruction on their doorsteps need to be seen for what they are – a feeble attempt to bribe vulnerable rural communities to accept an unpopular, unsafe and polluting process that will destroy their tranquility. Local communities need to make their voices heard loud and clear – they were right to resist before and should continue to do so.
‘The answer to the fossil fuel price crisis is to reduce usage with a mass insulation drive, alongside a clean energy sprint. There has never been a better time to transform our energy infrastructure to ensure a future of abundant green power.
‘Renewables are around nine times cheaper and far quicker to plug in than any alternative. Families facing the biggest drop in living standards on record need renewable energy to become the central pillar of a modernised energy system. And they need it to happen fast.’
A LEADING property association has praised the Government’s package of measures to help those unable to afford rising energy costs.
The National Association Of Property Buyers said the Prime Minister’s “swift and decisive intervention” would help many.
Spokesman Jonathan Rolande said: “Looking at the energy and inflation crisis from the perspective of the property market, we welcome the swift and decisive intervention by the government to help households and businesses with the cost of energy by capping annual expenditure at an average of £2500.
“The impact of higher increases jeopardised so many facets of the economy it was almost impossible to over-exaggerate the terrible consequences there might have been – bankruptcies, unemployment, increased inflation, a house price crash – all were very possible.
“Bills and inflation still look set to rise. Interest rates may well do so too. But the cliff-edge has, for now, been avoided. Businesses and homeowners now have certainty about their budgets and can plan accordingly.
“There will of course be a price to pay, perhaps with higher bills or taxes in the future. But today at least, homeowners, businesses, charities and everyone in the property sector will be breathing a huge sigh of relief.”
Under proposals outlined today, a typical household energy bill will be capped at £2,500 annually until 2024.
The huge support scheme could cost up to £150bn, but Ms Truss refused to put a figure on it, saying “extraordinary times call for extraordinary measures”.
Businesses will get support, with bills capped for six months, a shorter period of protection than many had hoped for.
The help will be for everyone in England, Scotland and Wales with equivalent help for Northern Ireland.
But there are concerns the measures are not targeted enough, with no additional support for the most vulnerable. As a result, millions are still expected to be in fuel poverty this winter.
The energy price cap – the highest amount suppliers are allowed to charge households for every unit of energy they use – had been due to rise to £3,549 in October.
To limit the amount customers’ bills go up by, the government will compensate energy firms for the difference between the wholesale price for gas and electricity they pay and the amount they can charge customers.
The final cost of the scheme will depend on the cost of energy on the international energy markets, which can be extremely volatile.
The money to cover the support will be borrowed by the government, adding to the UK’s already large debt pile.
A further 110,000 Scottish households could be eligible for energy saving home improvements as part of the Warmer Homes Scotland programme
The Scottish Government scheme has already supported more than 1500 homes in Edinburgh and has now extended its eligibility criteria to support more Scottish households this winter–
With fuel bills on the rise, a further 110,000 Scottish households could now benefit from energy saving home improvements as the eligibility criteria* for the Scottish Government’s Warmer Homes Scotland programme is extended.
Home Energy Scotland is calling on Scottish households in Edinburgh to act now ahead of the colder months, to find out if they may be eligible for around £5000 worth of support including heating and insulation improvements.
Delivered by Warmworks, more than 1500 households in Edinburgh have already benefitted from the programme since 2015, bringing a total cost saving on energy bills of around £388,189 in the region.
Designed to keep the heat in and increase energy efficiency in the home, Scottish households could also reduce their bills by getting in touch, with those who may have contacted Home Energy Scotland previously, encouraged to get back in touch due to the extended eligibility criteria.
Harry Mayers, Head of Home Energy Scotland,said; “With winter just around the corner, we understand that it is an extremely worrying time for many Scottish households in Edinburgh as we see home energy prices rise, but we are urging people to get in touch now to check whether they may be entitled to support.
“Following the Scottish Government extension to the eligibility criteria, support is available to even more Scottish households granting access to funding for energy saving home improvements including renewable systems.
“Even households who may have previously contacted Home Energy Scotland but unfortunately did not meet the criteria at that time, are encouraged to get back in touch as they may be eligible now due to the updates.”
Home Energy Scotland, the Scottish Government’s free energy efficiency advice service, helps people access the Warmer Homes Scotland programme along with a range of other financial support and impartial advice.
To find out exactly what you are eligible for – even if you have applied before – call the Scottish Government’s Home Energy Scotland hotline now on 0808 808 2282 or go to www.homeenergyscotland.org
Energy price hikes will cause ‘stress, anxiety, illness, debt and death’
Today (26 August) Ofgem has announced the energy price cap will increase to £3,549 per year for dual fuel for an average household from 1 October 2022.
This comes as Ofgem’s CEO warns of the hardship energy prices will cause this winter and urges the incoming Prime Minister and new cabinet to provide an additional and urgent response to continued surging energy prices.
The increase reflects the continued rise in global wholesale gas prices, which began to surge as the world unlocked from the Covid pandemic and have been driven still higher to record levels by Russia slowly switching off gas supplies to Europe.
The price cap, as set out in law, puts a maximum per unit price on energy that reflects what it costs to buy energy on the wholesale market and supply it to our homes. It also sets a strict and modest profit rate that suppliers can make from domestic energy sales. However, unlike energy producers and extractors, most domestic suppliers are currently not making a profit.
The price cap protects against the so called ‘loyalty premium’ where customers who do not move suppliers or switch to better deals can end up paying far more than others. Ultimately, the price cap cannot be set below the true cost of buying and supplying energy to our homes and so the rising costs of energy are reflected in it.
Although Ofgem is not giving price cap projections for January because the market remains too volatile, the market for gas in Winter means that prices could get significantly worse through 2023.
Jonathan Brearley, CEO of Ofgem, said:“We know the massive impact this price cap increase will have on households across Britain and the difficult decisions consumers will now have to make. I talk to customers regularly and I know that today’s news will be very worrying for many.
“The price of energy has reached record levels driven by an aggressive economic act by the Russian state. They have slowly and deliberately turned off the gas supplies to Europe causing harm to our households, businesses and wider economy. Ofgem has no choice but to reflect these cost increases in the price cap.
“The Government support package is delivering help right now, but it’s clear the new Prime Minister will need to act further to tackle the impact of the price rises that are coming in October and next year.
“We are working with ministers, consumer groups and industry on a set of options for the incoming Prime Minister that will require urgent action. The response will need to match the scale of the crisis we have before us. With the right support in place and with regulator, government, industry and consumers working together, we can find a way through this.”
Ofgem will continue to work with government, consumers groups, charities and suppliers, in supporting any new package of help or measures to ease the crisis.
Ofgem has also today strengthened the rules around direct debits to ensure suppliers set them at the right level, meaning that customers only pay exactly what they need to. The changes will stop suppliers from building up excessive customer credit balances and using them in a risky way as working capital.
Ofgem’s clear role is to protect consumers, and it has also today:
Strengthened requirements for suppliers to have sufficient control over the key assets they use to run their businesses. Together, this and the direct debit rule changes build on existing requirements to boost supplier resilience to better protect customers from costs associated with supplier failures.
Extended the Market Stabilisation Charge (MSC), which is paid by suppliers and helps protect customers from the cost of supplier failure.
Extended the ban on acquisition only tariffs which ensures all energy tariffs are available to existing as well as new customers, ensuring all consumers can get a fair deal on their energy.
Launched a review into the mechanism and level of profit margin available under the price cap to ensure that suppliers do not earn excessive profits and receive only a fair return for the services they provide to customers.
The new price cap level will take effect from 1 October 2022, but it is possible some suppliers may begin increasing direct debits before this date to spread costs. Customers worried about when their direct debit will increase should contact their supplier. Any money taken from customers to build up a credit will only ever be spent on their energy supply and customers can ask for their credit balance to be returned at any time.
Anyone worried about paying their bill should contact their supplier in the first instance. They are obliged to discuss payment plans and direct customers to government and third sector support where available. Ofgem is tightly monitoring suppliers’ performance in this area and has told all suppliers now is the time to step up their support for customers, especially those on low incomes or in a vulnerable situation.
Ofgem continues to monitor the impact of the price cap and to work with stakeholders and government on what more can be done for those least able to pay but most in need of energy.
When the new Prime Minister announces what additional support packages will be available, Ofgem will continue to examine how best it can help those groups of people that need it the most.
Reacting to today’s announcement by Ofgem, Poverty Alliance director Peter Kelly said: “The first moral duty of government is to protect people and provide them with security. The UK Government and Ofgem are failing badly in that duty and acting without any sense of compassion and justice.
“This massive price hike is in line with predictions. Ministers knew this was coming for months but have put nothing in place to prevent a humanitarian disaster.
“We must be clear. Bills of this size will be completely and utterly unaffordable for people on low incomes, many of whom have already been struggling with cuts to social security and huge wage squeeze for years and years. They will cause stress, anxiety, illness, debt and death.
“The UK Government must act now. It is simply not right that they continue to dither – prices must be frozen and targeted support must be put in place to help those most in need.”
Chancellor of the Exchequer, Nadhim Zahawi said:“I know the energy price cap announcement this morning will cause stress and anxiety for many people, but help is coming with £400 off energy bills for all, the second instalment of a £650 payment for vulnerable households, and £300 for all pensioners.
“While Putin is driving up energy prices in revenge for our support of Ukraine’s brave struggle for freedom, I am working flat out to develop options for further support. This will mean the incoming Prime Minister can hit the ground running and deliver support to those who need it most, as soon as possible.”
He later told the public to cut back their energy consumption – this from the man who once claimed parliamentary expenses for heating his stables!
This morning, Ofgem announced that the energy price cap will rise by 80%, taking typical household bills from £1,971 a year to £3,549 a year on 1 October.
People will rightly be worried by these huge price hikes. These eye-watering increases will simply be unaffordable for households up and down the country.
We’re demanding the government increase its support package for every household to at least £1,000, with extra support for the most financially vulnerable, or risk pushing millions of households into financial distress this winter. We also expect energy suppliers to ensure their customer service centres are adequately resourced to resolve queries quickly and help those struggling to pay their bills.
THE Government needs to spend £100 billion to freeze household energy prices for a year, according to an industry expert.Derek Lickorish, chairman of retailer Utilita Energy, told GB News: “Back in the banking crisis, Gordon Brown found £500 billion pounds to stop the banks falling apart and I’m advocating that we’re looking at about £100 billion to freeze prices for one year.
“At the moment, we don’t know what Liz Truss is bringing to the party and we don’t know whether it’s going to meet the size of the gap.
“While we have a price cap , when we get to the first of January, that figure is going to have a five in front of it, and it’s going to be another couple of thousand pounds and people cannot possibly afford to pay that amount of money for their energy bill.”
Speaking to Alastair Stewart on GB News, he added: “I think the area that needs to be looked at quite closely is the market structure, in terms of the way electricity is bought and sold, and I know there are plans to look at this now with some urgency.
“But you have a situation where you’re bringing on to the network power that has been effectively subsidised by the renewables obligation, yet they are getting these huge prices in terms of generation because the market price is set by gas.
“The wind doesn’t cost any more. The sun doesn’t cost any more. But these schemes are making an awful lot of money.
“To be fair, that’s about solutions that were brought in prior to 2017, so there was a change so that renewable projects from 2017 would get the price that they agreed.”
Asked to make a final point, Mr Lickorish said: “I want the Government to tell us what’s happening and it needs to be a very, very big number that we need to know now.
John Redwood MP, who has been tipped for a post in a new administration, suggested that VAT on energy will be scrapped for businesses when a new Prime Minister is in place.
“Cancelling VAT on fuel, at least temporarily while fuel costs are elevated, is a serious runner and any new government team will want to look at that,” he told Liam Halligan on GB News.
“I certainly agree with you that there are a lot of businesses under a lot of pressure and I think that must be part of a comprehensive package to explain to industry what help might become available.
“And what can be done about the excessive fuel bills that will directly now lead to some closures, as we’ve heard recently.”
Commenting on the energy price cap rise announced today, Crispin Truman, chief executive of CPRE, the countryside charity, said: ‘This winter’s energy bills are a ticking time bomb threatening to blow apart household finances.
“Rural areas, where wages are lower and homes often cost more to heat, will be devastated if the full force of the price rises are felt by consumers. The government must step in to prevent those living in the countryside from having to choose between eating and heating this winter.
‘We’ve been here before in the pandemic – the country is entering a national crisis that requires an emergency response. Ministers must urgently put in place direct financial support to get people through the winter, while working to deliver the only viable long term solution – improving the energy efficiency of our homes.
‘In addition to stratospheric energy bills, the cost of living crisis is being driven by a lack of housing and soaring rents for millions in the private rented sector. Homelessness is rising as half a million people languish on social housing waiting lists. In the Eden district of Cumbria, homelessness rates are more than four times what they were in early 2020.
‘Twiddling with taxes won’t cut it. To ease the cost of living crisis the government needs to provide immediate monetary support. To prevent a generation of rolling winter crises, we need to get off gas and rapidly invest in home insulation and cheap renewable energy. A longer term fix must also include providing many more social and affordable homes.’
National charity, Family Fund,has welcomed the Government’s one-off £150 cost-of-living payment for 6 million disabled adults and children from September, but warns more support will be needed given today’s uplift of the Energy Price Cap.
Cheryl Ward, Family Fund Chief Executive, said: “We know that current severe inflationary pressures are affecting millions of people across the land, but for families caring for disabled and seriously ill children, who have even greater costs, the outlook is very grave. The choices between putting food on the table, paying for energy or clothing and sensory equipment are stark”.
Family Fund, the UK’s largest grant-making charity for families with disabled or seriously ill children and young people, acknowledges that the much-needed Government cash will go some way to ease the burden of bills, as the cost of living soars, but that more support will be needed in the coming months.
The charity provides essential items for families on the lowest incomes, including kitchen appliances, clothing, bedding, play equipment and much-needed family breaks.
Parents and carers raising a disabled or seriously child can face costs some three times higher than for other families. A grant from the charity can make all the difference for parents; helping to relieve their everyday stresses by providing essentials needed to care for their children.
“We very much welcome this latest £150 payment from Government”, said Cheryl Ward, “but we know from the increasing calls we are now getting from our families, facing spiralling costs on every front, that more support will be needed. We are therefore, along with other charities, asking ministers to consider urgently how future support can be given.”
In recent research, three quarters of families supported by Family Fund say their financial situation has worsened significantly since the pandemic.
Even before today’s Energy Price Cap uplift, two thirds of families with disabled children are struggling to pay energy bills and nearly one quarter say they are already falling behind with bills.
The cost of living crisis is, therefore, hitting many who are already in an extremely financially vulnerable position.
£1.2 million to ensure households and businesses get support
Immediate funding is being awarded to key energy advice organisations to make sure energy customers can access crucial support and advice to deal with rising energy bills and heating costs.
More than £1.2 million will be distributed to help key agencies, including Advice Direct Scotland, Home Energy Scotland and Citizen’s Advice Scotland, reach more people who need help.
The funding will also support a training programme for staff from third sector organisations to expand the reach of expert advice.
The Scottish Government committed to providing additional support to advice agencies at the Scottish Energy Summit hosted by the First Minister on Tuesday 23 August, at which a series of further actions to mitigate the energy price rises were agreed with energy companies and advice organisations.
The additional funding announced today is on top of the Scottish Government’s existing investment in free income, welfare and debt advice services, including support to Money Advice Scotland and the Welfare Advice and Health Partnerships Programme.
Minister for Zero Carbon Buildings and Tenants Rights Patrick Harvie visited Home Energy Scotland’s Edinburgh offices to speak to advisors who have been supporting households.
Mr Harvie said: “We know that this is an incredibly unsettling time for all households and businesses and it is imperative that those worried about or struggling with heating their homes access the information and support they need to reduce their energy bills.
“A further energy price cap increase announcement will only serve to escalate concerns, making the need for impartial, expert advice and support even more vital.
“The Scottish Government is clear that energy customers simply cannot be expected to carry the burden of further price rises in October, and that the UK Government must now commit to freeze the cap for all households and to support energy companies to deliver that.
“In the meantime, the cost crisis is already hitting energy customers hard and the Scottish Government will continue to do everything within our means to support the people of Scotland through it.
“This funding will ensure that expert advisors across the country stand ready to provide crucial support and guidance to those understandably worried about their energy bills. I would urge everyone who has concerns to access these services and get the support they need.”
A total of £1.268 million will be distributed across energy advice services as follows:
£220,000 to Advice Direct Scotland to fund new staff in its contact centres for consumers, including vulnerable consumers, in need of help.
£50,000 to Advice Direct Scotland to create a user-friendly online digital journey for customers
£220,000 to Citizen’s Advice Scotland to enhance capacity in their local advice bureaus enabling them to provide advice on both energy debt and energy efficiency measures.
£280,000 to expand the Home Energy Scotland advice Service
£198,000 for Home Energy Scotland recruits who will provide training to staff from third sector organisations on energy efficiency, which will see around 200 local community groups and organisations benefit
£300,000 to enhance support for businesses through Business Energy Scotland
The Scottish Government estimates that 906,000 or 36% of all households will be in fuel poverty in October 2022, based on an Ofgem price cap of £2,800 and taking into account previously announced government mitigations.
The Scottish Government has allocated almost £3 billion in this financial year that will help households face the increased cost of living. This includes the provision of services and financial support not available elsewhere in the UK that is helping to reduce everyday costs and increase incomes.
It also includes £10 million to continue the Fuel Insecurity Fund which helps households at risk of severely rationing their energy use, or self-disconnecting entirely. This includes direct support for households using any tariff or fuel type, and is delivered via trusted third sector partners the Fuel Bank Foundation, Advice Direct Scotland and the Scottish Federation of Housing Associations.
