Chancellor's move to soften blow of energy price cap rise is 'a drop in the ocean', says Jamie Stone
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North MP Jamie Stone has warned that householders face an acute cost-of-living crisis despite efforts by the Chancellor of the Exchequer to soften the blow of the energy price cap rise.
Energy regulator Ofgem announced today that the price cap is increasing to £1971 for the average household – a rise of £693, or 54 per cent. Those on prepayment meters will see a typical increase of £708 to £2017 annually.
The changes take effect from April.
Chancellor Rishi Sunak unveiled a £200 energy bills discount for all households, to be repaid over five years, in addition to a £150 rebate for English households in council tax bands A-D.
Mr Sunak said that £219 million of Barnett funding would be made available to the Scottish Government to mirror his council rebate scheme. The devolved administrations in Scotland, Wales and Northern Ireland will be able to choose whether to spend the funding this year or next year.
Mr Stone said: “I am relieved that opposition calls for urgent help with energy bills have finally been heard, but we must be clear that what is on offer from the Treasury is a drop in the ocean. A £200 loan may help delay the pain, but it will do nothing to take that pain away.
“At the same time that household bills are rocketing, the Chancellor is going ahead with a National Insurance tax hike which for many people will cancel out the support he is providing on energy costs.
“Many Highlanders already face serious fuel poverty, and tragically what has been announced today will only serve to paper over the cracks.”
Mr Sunak said: "Right now, I know the number one issue on people’s minds is the rising cost of living. That’s why the government is stepping in with direct support that will help around 28 million households with their rising energy costs over the next year.
"We stood behind British people and businesses throughout the pandemic and it’s right we continue to do that as our economy recovers in the months ahead."
The manager of Caithness Citizens Advice Bureau, Sadie Kevill, said: "The sharp rise in energy bills this year is really going to hit a lot of people, particularly those who were already struggling with their bills.
"We have already started to see an increase in the number of clients contacting us for energy advice.
"We know that people can feel helpless and isolated when they can’t pay their fuel bills, especially at this time of year. The main thing to remember is that you are not alone. Caithness CAB is here to help you, and our advice is free, confidential and impartial.
"I don’t want to see anyone in Caithness in fuel poverty this winter if we can possibly help avoid it."
Mrs Kevill says Caithness CAB can support people by:
- Helping identify grants or benefits that they may be entitled to but don’t know about
- Talking to energy suppliers on householders' behalf, to restructure any debts and see if any help can be given.
- Advising on ways to cut energy use in the home, which could help with bills
- Advising on how to use your prepayment meter, or what to do if your energy supplier has gone out of business
The Caithness CAB phone numbers are 01847 894243 (Thurso) and 01955 605989 (Wick).
Andrew Bartlett, chief executive of Advice Direct Scotland, said: “This sharp rise will be a devastating blow for many households across Scotland. It will cause deep anxiety and financial worries, leaving many people facing the stark choice of heating or eating.
“But Scots don’t have to struggle alone – free, impartial and practical advice is available to everyone in Scotland through our energyadvice.scot service.
“And charities and organisations in Scotland that provide debt, money or energy advice can sign up at homeheatingadvice.scot as a ‘referral partner’ to access a £3m Scottish Government fund for those in fuel poverty or rationing their energy use.”
Ofgem says the increase is driven by a record rise in global gas prices over the past six months, with wholesale prices quadrupling in the past year.
It will affect default tariff customers who haven’t switched to a fixed deal and those who remain with their new supplier after their previous supplier exited the market.
The price cap is updated twice a year and tracks wholesale energy and other costs.
Over the last year, 29 energy companies have exited the market or been put in special administration in the wake of soaring global gas prices, affecting around 4.3 million domestic customers.
Ofgem chief executive Jonathan Brearley said: “We know this rise will be extremely worrying for many people, especially those who are struggling to make ends meet, and Ofgem will ensure energy companies support their customers in any way they can.
“The energy market has faced a huge challenge due to the unprecedented increase in global gas prices, a once-in-a-30-year event, and Ofgem’s role as energy regulator is to ensure that, under the price cap, energy companies can only charge a fair price based on the true cost of supplying electricity and gas.
“Ofgem is working to stabilise the market and over the longer term to diversify our sources of energy which will help protect customers from similar price shocks in the future.”
