How is The Scottish Government Tackling The Energy Crisis?

Scotland is in the midst of an energy crisis. Gas, electricity, and water bills are all set to rise, further hiking up the cost of living. Households all over the country are struggling with these increases, with low-income households being the most affected.

The Office of Gas and Electricity Markets (Ofgem) announced on the morning of the 3rd of February that the energy price cap would increase on the 1st of April to £1,971. This is an increase of 54 per cent from last year, which will be devastating news to many families. An estimated 22 million customers will be affected by this rise, which is due to the increase in global gas prices over the past six months.

In the Ofgem press release, a quote from Johnathan Brearley, the chief executive of Ofgem, 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.

“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.”

Low-income families are going to be the most affected by this change. Already facing an increased cost of living, they will now struggle to power and heat their homes. Roughly 640,000 Scots are struggling to keep up with their energy bills due to the increase already - that is one in seven people.

Citizens Advice Scotland (CAS) reported through a survey that 36 per cent of adults in Scotland are suffering due to the energy cap, and 40 per cent of them have listed having a low-income as the reason. These families are having to make cutbacks to their usual shopping just to cover the price of their energy bills. A survey by the Office of National Statistics (ONS) shows that two thirds of people have seen their cost-of-living increase, and a quarter of those have also had to use money from their savings to cover their bills.

A report from Consumer Scotland said: “Real wages are predicted to only increase by 0.1% during 2022, while the Resolution Foundation forecasts that families will typically face increased costs of around £1,200 in the form of higher energy bills and tax increases. This income squeeze will impact consumers and risks pushing more people into poverty.”

So, low-income families are not only struggling due to the increase in prices, but they are not getting a suitable increase in pay which makes it even more difficult for them to afford these bills. Families will be expected to have to pay the 54 per cent increase in energy bills, as well as the increased cost of living, while they themselves are barely getting a pay rise.

To relieve some of the pressure that low-income households are facing with the general increased cost of living, the Scottish Government had “taken the decision to uprate eight Scottish benefits by 6 per cent from 1 April as well as increase our Scottish Child Payment by 100 per cent from £10 per week per eligible child to £20,” which was reported in a letter from Kate Forbes, Finance and Economy Secretary to Rishi Sunak, the Chancellor of the Exchequer.

Back in 2019, the Fuel Poverty (Targets, Definition and Strategy) (Scotland) Act 2019 was unanimously passed by Parliament. This Act aims to eradicate fuel poverty entirely and focuses on low-income households and their struggles with fuel poverty in Scotland. By 2040, the aim is that no household in Scotland will suffer from fuel poverty.

However, since 2019 a lot has happened. The impact from COVID-19, Brexit, and Ukraine – Russia conflict has affected the cost of living, including the cost of fuel and energy. These unforeseen circumstances have made it difficult for the Act to have much effect as prices continue to soar.

Additionally, in the published strategy Tackling fuel poverty in Scotland: a strategic approach, it reported that “… we have also seen a period of sustained pressure on household incomes due to the removal of the Universal Credit uplift alongside the impacts of rising fuel and food costs. These challenges created a perfect storm that has hit those on the lowest incomes hardest and highlights that households can move in and out of fuel poverty as income and energy costs change over time.

Home Energy Efficiency Programmes for Scotland (HEEPS) is a scheme that helps those struggling with their energy bills. HEEPS is an area-based scheme which funds local authorities in areas that have a prominent level of fuel poverty, and send households energy efficient programmes, such as solid wall insulation, to help keep their bills down.

HEEPS have made over £482m available to local authorities, including 2021/22 allocations. They have helped over 100,000 households since 2013.

Energy Efficient Scotland: Warmer Homes Scotland is another scheme which focuses on insulating households and giving them more affordable energy options, helping them to heat their homes for less. In a policy report by the Scottish Government, “renewable and micro-generation measures have been made available, including ground source heat pumps, micro-wind, micro-hydro and micro-CHP systems,” by Energy Efficient Scotland.

These schemes offer solutions that last in the long-term, compared to a one-off payment, so, in theory, the households receiving this help should find paying their energy bills a lot easier.

A Google Forms survey asked people their thoughts on the rise in energy prices.

58.3 per cent of respondents believe that the rise in energy prices will have a drastic impact on their households, with another 25 per cent unsure of the implications.

The majority (58.3 per cent) of voters consider themselves to be part of a low-income household, and out of that 58.3 per cent, 88.9 per cent voted that they were not aware of any support in place to help with the rise in energy bills. This could be since a lot of these schemes have been out for at least a couple of years and are not talked about enough, so no one knows about them.

The lack of awareness of these schemes does, in fact, seem to be a big issue. 58.3 per cent of respondents believe that the Government is not doing enough to advertise the support for those who need it, voting that they haven’t heard about any support at all. The remaining 41.7 per cent voted that they have heard of some support, but do not know if they are eligible or how to access it.

So, when asked if the voter or their household had applied for any support, it was no surprise when 66.7 per cent said no. The other 33.3 per cent said that they haven’t yet, but they plan to.

It is worrying that no one voted ‘yes’ when asked if they had applied for support yet, and that no one knew enough about the support in place to know where to access it and if they were eligible or not.

The lack of information in this area could put people off from trying to see if there is support there for them, and they may give in to fuel poverty.

There are a lot of things for the average person to worry about in these times and worrying about having to choose between food or a warm home should not be one of them. The Government needs to better advertise these resources, especially for low-income families, and guide them through the support that’s there before the poverty numbers increase.

PoliticsEmma Christie