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Monday, July 15, 2024

More Support Needed for Rural Households as Energy Debt Reaches Record Levels

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Ariane Burgess, Scottish Green MSP for the Highlands & Islands region, has today welcomed news of a cut to the energy price cap but said more needs to be done to help rural households who face higher rates of fuel poverty. 

The energy price cap, which sets a maximum rate per unit that can be charged to customers for their energy use, will fall by 12.3% on the previous quarter from 1 April to 30 June 2024, according to regulator Ofgem.

They also confirmed that they will be removing a premium on standing charges previously incurred by those on prepayment meters. 

Commenting on the news, Ms Burgess said: 

“While I welcome the news that the price cap has been lowered and standing charges are reducing for some, the cost of living remains high and many of my constituents continue to struggle with their bills. 

“Much more must be done to help rural households who face the highest rates of fuel poverty.

“In much of the Highlands & Islands, there is no mains gas supply, so even direct debit customers are unable to access the cheapest tariffs on offer. 

“It was always unfair for those on pre-payment meters to pay the most as they tended to be those most vulnerable and struggling, but standing charges are also a disincentive to everyone working hard to reduce their usage through energy efficiency.

“Earlier this year, I wrote to Ofgem calling for them to scrap standing charges altogether. 

“The standing charges issue is fundamentally about fairness: there is no reason why energy bills for millions of poorer, low-income households should be proportionately more expensive than those of many larger and wealthier households.  

“The Scottish Government has worked hard to encourage reduced energy consumption as a response to the climate emergency.

“Standing charges lessen the impact of energy efficiency measures because the reduction in energy use is not fully reflected in lower energy bills.

“This factor is a particular concern for lower energy users as standing charges form a larger proportion of their energy bills than those of many higher users. 

“We need to think about what more can be done for those who simply cannot afford to pay their energy bills even as prices fall.

“Ofgem and the UK Government must seize the opportunity to reset the energy market so that it works for people and planet, not private profit.  

“Ofgem also revealed last week that energy debt has now reached £3.1 billion – money that could make a huge difference to the UK’s recession-hit economy.

“It’s concerning that, when many energy companies have reported bumper profits this year, the solution Ofgem is proposing for managing this debt is to charge bill payers to support customers who are struggling, instead of asking energy companies to put some of their profits towards the cost.”

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