Energy price hike will hit the rural poor hardest
The Scottish fuel poverty crisis at the centre of two new reports could deepen over the coming months as energy suppliers prepare to hike prices again.
Tariffs are forecast to go up by around 5 per cent this winter as suppliers pass on a combination of higher wholesale gas prices and the effect of weaker sterling on the cost of importing energy supply.
Some small firms have already raised their prices, with GB Energy increasing its standard tariff by 30 per cent this autumn and Co-op Energy bills going up earlier this month.
Mark Todd, co-founder of energyhelpline.com, said: “With winter just around the corner, consumers sadly face the very real chance of energy price rises. Increases of around 5 per cent look likely, though it could be more. It’s not the news households want to hear as they turn on the heating.”
The warning came amid growing pressure on the Scottish Government to be more effective in tackling fuel poverty. Households classed as living in fuel poverty are those spending more than 10 per cent of their income on fuel use. The most recent Scottish house condition survey found that 34 per cent of Scottish households meet that definition, rising to more than half in certain parts of the country.
Last week’s reports from the Scottish Rural Fuel Poverty Task force and the Scottish Fuel Poverty Strategic Working Group came ahead of the November deadline to meet the target of eliminating fuel poverty in Scotland. The government admitted earlier this year that the target would be missed.
Graeme Brown, director of Shelter Scotland, said: “It’s unacceptable that in 21st century Scotland many households still face the stark choice of heating or eating and that thousands of extra deaths each year are attributed to the cold conditions.
“Missing our current fuel poverty targets by such a margin is evidence that the current approach from the Scottish Government to tackling this issue is simply not enough to eradicate fuel poverty in Scotland.”
The strategic working group recommended that all properties of fuel-poor households should be upgraded to at least an energy performance certificate (EPC) band C by 2025.
“The Scottish Government has all the powers it needs to regulate and improve the quality of the homes we live in,” said Lori McElroy, chair of the Existing Homes Alliance. “With a consistent commitment, none of Scotland’s homes should be below the EPC band C standard by 2025.”
The rural fuel poverty report called for targets to be set specifically for rural areas and set out proposals for a non-transactional price comparison website “where all prices can be compared on all tariffs charged by suppliers of all domestic fuels in all distinct market areas of Scotland”. It also recommended the appointment of an independent group to monitor progress made in tackling all aspects of the rural fuel poverty problem in Scotland.
Around half of rural households are considered to be in fuel poverty, said Craig Salter, energy spokesman at Citizens Advice Scotland and a member of the rural fuel poverty task force.
“It is clear that more needs to be done to address the issues facing rural areas,” said Salter.
“We hope that government, energy suppliers, organisations and communities can work together to take forward the task force recommendations, and work towards ending fuel poverty in rural Scotland.”
The recommendations outlined in the latest papers are typically of a long-term nature, however. With prices set to rise again, the quickest way that many households can reduce their fuel costs is to review the tariff they’re on. A fixed option can be a good way of protecting yourself against this winter’s likely increases. Some fixed tariffs average out at around £800 a year, and while there will usually be a penalty if you exit before the term ends, they are much cheaper than the variable tariffs that most households are on.
“Such a deal guarantees a customer no price rises for a year or more. There is even one currently available at a really low rate that is fixed for three years,” said Todd.
“By getting on a cheap rate many families who struggle to afford to heat their home no longer need to worry. That’s why in energy it doesn’t pay to be loyal.”