The energy price cap rise is “simply unaffordable for millions” and must be cancelled, Scotland’s First Minister Nicola Sturgeon has said.
Ofgem has confirmed an 80.06% rise in the cap, which will send the average household’s yearly bill from £1,971 to £3,549 from October.
The cap will come into effect for around 24 million households in England, Scotland and Wales on default energy tariffs on October 1, and will remain in place until December 31, when it will be adjusted again.
Scotland’s Energy Secretary Michael Matheson said the increase is “unsustainable” and warned it would push millions into fuel poverty.
Ms Sturgeon said the rise should not be allowed to happen.
She tweeted: “This is simply unaffordable for millions. It cannot be allowed to go ahead.
“This rise must be cancelled, with the UK gov and energy companies then agreeing a package to fund the cost of a freeze over a longer period, coupled with fundamental reform of the energy market.”
Mr Matheson told BBC Radio Scotland’s Good Morning Scotland programme households were already struggling with the cap increase in April this year, and that “increasing it by another 80% is simply unsustainable.”
This is simply unaffordable for millions. It cannot be allowed to go ahead. This rise must be cancelled, with the UK gov and energy companies then agreeing a package to fund the cost of a freeze over a longer period, coupled with fundamental reform of the energy market https://t.co/bDXM7fDeyD
— Nicola Sturgeon (@NicolaSturgeon) August 26, 2022
He said: “It will force quite literally millions of households into fuel poverty and extreme fuel poverty and is unsustainable.”
Ofgem’s chief executive Jonathan Brearley warned of the hardship energy prices will cause this winter and urged the incoming prime minister and Cabinet “to provide an additional and urgent response to continued surging energy prices”.
The regulator said the increase reflected the continued rise in global wholesale gas prices, which began to surge as the world unlocked from the Covid pandemic and had been driven even higher to record levels by Russia slowly switching off gas supplies to Europe.
In a statement issued after the increase was confirmed on Friday, Mr Matheson called on the UK Government to act.
He said: “Today’s price cap announcement and increase imposes a burden that customers simply cannot be expected to carry.
“The only acceptable course of action now is for the UK Government, who have the necessary policy levers and borrowing powers at their disposal, to take immediate steps to cancel the increase for all households.”
Mr Matheson added: “No single government, company or organisation can solve this crisis alone. It requires a collective response commensurate to the situation.
“We will continue to work with our partners, energy companies and stakeholders to do everything we can to help the people of Scotland through this deeply unsettling time.
“We will also continue to press the UK Government to reform the energy market to prevent this situation occurring again in the future.”
Mr Matheson said the Scottish Government is treating the situation as a “public emergency” and has prepared a £1.2 million package to enable the immediate expansion of energy advice services.
The £2 million Social Housing Fuel Support Fund, administered by the Scottish Federation of Housing Associations, will open on Monday to provide help to the most vulnerable households.
Scottish Labour leader Anas Sarwar and Scottish Liberal Democrat leader Alex Cole-Hamilton called for energy prices to be frozen.
Mr Sarwar said: “This eye-watering price hike risks plunging millions of people into fuel poverty.
“This is a national emergency and our governments have a moral duty to act.”
Scottish Liberal Democrat leader Alex Cole-Hamilton MSP said: “This energy price rise will be devastating for hundreds of thousands of Scottish families and pensioners already struggling to make ends meet.”
Citizens Advice Scotland also said the increase should not be allowed to happen.
The charity’s chief executive, Derek Mitchell, said: “This increase should not go ahead. It is absolutely horrifying for people who are hanging on by a thread financially.”
Chancellor Nadhim Zahawi said the increase in the energy price cap will cause “stress and anxiety” for people but the Government is working to develop more options to support households.
He said: “I know the energy price cap announcement this morning will cause stress and anxiety for many people, but help is coming with £400 off energy bills for all, the second instalment of a £650 payment for vulnerable households, and £300 for all pensioners.”