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"Catastrophic": Warnings as Ofgem hint at another steep energy price rise

This news post is 6 months old
 

Ofgem chief executive Jonathan Brearley appeared in front of MPs in Westminster this week.

Charities and campaigners across Scotland have warned a further increase in the energy price cap later this year could be “catastrophic” for working people as the cost of living crisis rages on. 

On Tuesday, Ofgem chief executive Jonathan Brearley told MPs an energy price cap “in the region of £2,800” is expected in October. 

Ofgem’s prediction is steeper than April’s price cap increase of £693 a year to £1,971 for those on default tariffs paying by direct debit for the average household.

Those supporting households who are already struggling to get by have said that drastic measures need to be taken to avoid disaster. 

Age Scotland warns that, without sufficient preventative action, hundreds of thousands of older people will be at further risk of being pushed into poverty.

With the cost of energy and food already spiralling and 1 in 3 older households in Scotland already living in fuel poverty, and many more just on the cusp, the charity is urging governments to heed the warning from Ofgem’s chief executive and consider how those on the lowest incomes in particular can be protected.

Chief executive of Age Scotland, Brian Sloan, said: “This projected increase is jaw dropping and would be nothing short of catastrophic for older people. Not to mention the fact it is expected to hit at the worst possible time of year as we head into the colder, darker months.

“The past few months have already been extremely challenging, particularly for those on low and fixed incomes, with 94% of older people already worried about their energy bills back in March and many sacrificing all but the most essential purchases to keep their lights and heating on.

“Now, the bad news just keeps on coming and it looks like a very dark and difficult winter is looming.

“Today’s warning, coupled with news that the inflation rate on everyday shopping has hit its highest point in over a decade, should set alarm bells ringing for both the UK and Scottish Governments, and we would hope to see plans for preventative action taking shape as soon as possible in an attempt to mitigate the undoubtedly devastating impact this increase would have on older people. We can’t afford to wait for the worst effects to be felt.”

The warning comes after research published earlier this week showed that more than one in five Scots are already struggling to pay their bills on time. 

Citizens Advice Scotland, who carried out the survey, urged people to come forward for support. 

Chief executive, Derek Mitchell, said: “An increase In energy bills of this size and scale without significant support from the Government would be absolutely catastrophic for people across the UK, especially for those on low and insecure incomes.

“Research published by Citizens Advice Scotland earlier this week shows that one in five people in Scotland are already running out of money regularly before pay day - people can’t take another big increase in bills.

“The cost of living crisis is squeezing household budgets to breaking point across the country. If there’s one thing people should do at this point it’s seek advice from the CAB network, whether that’s from a local Citizens Advice Bureau or our online resources like our public advice site or www.MoneyMap.scot.

"Our advice is free, impartial and confidential. last year we unlocked £147million for people through things like social security payments and employment entitlements. The average value for those who saw a gain was over £4,400, which can be simply life-changing money for people.”

This advice was echoed by Scotland’s national advice service, Advice Direct Scotland, who run the energyadvice.scot service with free, impartial and practical advice on energy bills for anyone in Scotland.

Andrew Bartlett, chief executive of Advice Direct Scotland, said: “This prediction will be devastating for households across Scotland.

“Many are already struggling with huge rises in recent months, pushing them into debt and financial hardship.

“The prospect of bills rising so steeply this autumn means that some households will face the stark choice of heating or eating.

“Our advisers are dealing with a growing number of queries and helping thousands of people, and we urge Scots not to struggle alone.”

Others have called for the government to step forward and intervene, including the expansion of free school meals across Britain. 

Chief executive of The Children’s Society, Mark Russell, said: “An increase of this scale to energy bills would have awful consequences for families who are already barely managing to pay the bills, feed and clothe their children. 

“An extra £800 over the year coming just as we head into winter is unthinkable. I dread to think of the impossible decisions that parents will have to make over the absolute necessities for their children.

“Not only do we worry about children not having a warm home, enough food and clean clothes, we are deeply concerned of the long term consequences of poverty and debt, and the scars they could leave for many children whose families are pushed into financial crisis as a result of these price rises.

“The government must step up quickly to meet the huge scale of the challenge ahead. One of the tools at the government’s disposal would be to make school meals free for all children whose families receive universal credit, saving hard pressed families around £400 per child per year, which can be used towards other essentials like fuel. And it’s clear that the government is going to need to take a multi-pronged approach to cushion families from the blow of these costs.”

 

Comments

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Dominic Notarangelo
6 months ago

No longer fit for purpose.