Autumn Statement: Chancellor Jeremy Hunt must act to ensure energy price help does not leave off-grid rural communities out in the cold – Simon Ritchie

For communities in rural Scotland, being told you reside “out in the sticks” is usually a jovial phrase – but with an inference that we’re missing out on the hubbub of urban life.

Sometimes, however, there is more than a tinge of truth to it – particularly when it comes to politicians only considering urban communities and failing to take account of rural living when making big decisions about policy. One lasting example of this from Liz Truss’ short-lived premiership was the package of measures to tackle soaring domestic energy bills.

Whilst this intervention was very welcome, the reality is the support you receive varies greatly. Rural areas are being short-changed – and we hope that will be corrected in the Chancellor Jeremy Hunt’s autumn statement on Thursday.

Half a million Scottish homes are off-grid, meaning they use fuels other than mains gas for their heating. Instead, they rely on sources like storage heaters, heating oil, coal, wood, or LPG gas as their main source of heating. The vast majority of these homes are in rural areas. Like mains gas, the price of these fuels has shot up in the past year. But unlike mains gas, a large part of the UK Government’s support to limit price rises doesn’t apply for off-grid homes.

What has gone wrong here is a classic example of a failure, by government, to rural-proof a policy. It’s worth looking into the detail of how the government’s intervention works. The UK Government’s support for heating bills came in two parts.

First, the Energy Bill Support Scheme grants every home in the UK £400 towards their energy bills this winter. That’s being spread over winter, and credited to customer accounts monthly. You get this no matter how you heat your home, as long as you have an electricity supply.

Secondly, the Energy Price Guarantee caps electricity and gas unit prices. Although you ultimately pay for what you use, it’s been capped at a level intended to mean the average home, on typical energy use, will pay £2,500 per annum instead of what could have been £3,500 a year without this intervention.

It’s this second part – the Energy Price Guarantee – where the problem lies. This part of the scheme will save mains gas-connected homes an average of £500-£700 between October and March. So far, so good. But if you’re one of those households not on mains gas, the Energy Price Guarantee doesn’t fully apply to you. Instead, you qualify for an “Alternative Fuel Payment” – a one-off sum of a measly £100.

UK Chancellor Jeremy Hunt is due to given an autumn statement about government taxation and spending on Thursday (Picture: Leon Neal/Getty Images)

The government has repeatedly claimed off-grid homes will receive “equivalent support” to those with mains gas connections. You don’t need a certificate in maths to recognise that £100 is not equivalent to £700. That gap amounts to a rural heat tax – and it needs to be fixed immediately.

As we noticed this problem coming to the fore with winter fast approaching, so too was there an increase in the anecdotal evidence we were receiving from rural communities about the energy cost issues they were experiencing.

One family in the Black Isle explained that their heating oil price had leapt to 90p a litre, up substantially from a ‘normal’ 40p rate – and even worse when you consider that it was only 26p a litre during the Covid lockdowns. That has contributed sharply to a total energy bill of £4,300 a year for the house – up from around £2,000 previously. Similarly, we heard from one rural landlord who rents a property to a local tenant and had to step in to provide payment of more than £500 to the fuel company – or leave the tenant with an empty kerosene tank and no way of heating the home during the cold months ahead.

In many ways, our rural communities are already having to cope with an even harsher cost-of-living crisis than urban dwellers – leaving aside the lack of financial support from the government on energy. With diesel currently priced at close to £2 a litre, and public transport options much more limited, moving around rural Scotland can often be an expensive business. Add in the poorer insulation that often exists in rural housing, as well as the higher costs of food in retail outlets, and the pressure on budgets soon mount up.

The lack of government support for off-grid housing is not just an issue in Scotland, however. The UK Government’s Secretary of State for Wales, David Davies MP, has admitted that the off-grid payment of £100 was “certainly not generous”. We had already written last month to his Scottish counterpart Alister Jack MP to express that view and we hope he will concur and press his Cabinet colleagues to take action.

As a minimum, we are calling on the UK Government to increase the Alternative Fuel Payment from £100 to £500. The fuel poverty gap between rural and urban Scotland has historically been too wide and we cannot tolerate a policy that widens that gap further. We fully recognise the huge pressures that are being placed on public budgets as well as the competing demands from across society for an increased slice of a shrinking spending pie. However, it should not be the case that rural communities are at a significant financial disadvantage simply because the energy grid does not stretch far from the cities.

And, by taking action now to ensure parity, the UK Government has a chance to show that rural communities are not being left out in the sticks when it comes to action on the cost-of-living crisis.

Simon Ritchie is public affairs manager at Scottish Land & Estates