Scots set to pay £1000 more than rest of UK on energy bills

New analysis, which lays bare the extent of the hit on the nation from rising fuel costs shows that typical dual fuel bills from April in Scotland will soar despite an expectation that the UK government will not hike their energy price guarantee from £2500 a year to £3000.

A £2500 price guarantee will mean the typical Scots household will still be forking out close to £3500 a year in energy bills - that's nearly £2100-a-year more than in 2021, and a near £900 hike on April last year. It would mean that from next month the typical Scots household energy bill would consume over 13% of the average Scot's take home pay.

Parts of Scotland would still have to fork out nearly double the £2500 energy price guarantee if it remains as concerns rise that not enough is being done to support Scots in the cost of living crisis.

Analysis of estimated average energy bills and typical regional salaries across Scotland shows that some parts of rural Scotland, where wages are below the average are to be hit even harder, leading to calls for urgent government intervention.

While typical UK household energy bills were due to rise to £3,000 a year from April through the price guarantee, it is expected that the UK Government will keep the level at £2500 a year for a further three months. But a crucial £400 winter discount is to end - which will put bills up by nearly 20% from next month.

If the Chancellor kept with the plan to raise the price guarantee to £3000, typical annual dual fuel bills would hit £4100 bills in April - £600 more than if it was kept at £2500.

Energy Action Scotland (EAS), the only national campaign organisation set up to end fuel poverty in the nation, in a call for action to government has said that a quarter of households, over 600,000 are struggling with energy costs.

And it believed that if the price guarantee rose to £3000 some 1m of Scotland's 2.48m households in Scotland would be plunged into fuel poverty - where households are spending 10% or more on reasonable fuel needs and if the remaining household income is insufficient to maintain an adequate standard of living.

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An analysis from February 2022, before the bulk of the fuel bill rises, showed that the levels of fuel poverty range from 19% in East Renfrewshire, 26% in West Lothian and 27% in Midlothian to 57% in Comhairle nan Eilean Siar, 47% in Highland and 46% in Argyll and Bute.

Official data shows that the lowest rates of fuel poverty are associated with higher energy efficiency standards. Some 20% of Scots households living in post-1982 dwellings and 20% of households living in dwellings that had average energy efficiency ratings or better were fuel poor.

The group warned that if the UK government went with the £3000 price guarantee, fuel poverty would soar to 75% in some Scottish communities.

The group say fuel poverty is highest in remote and rural Scotland where there are more all-electric, oil, liquified petroleum gas, or solid fuel heated homes.

Experts acknowledge that climate plays a significant role in the need for households to consume energy to stay warm.

According to the 2019 Scottish house condition survey, around 50% of all homes are at Energy Performance Certificate levels of D or below.

EAS say there is a "growing body of evidence" that shows that better targeting of financial support is necessary to "avoid the worst of the current crisis".

Frazer Scott, chief executive of EAS said the loss of £400 was still a "very significant" hit on consumers.

"Households across Scotland face ever increasing energy costs which is having a devastating impact on already stretched household budgets.

"To help people is a political choice. The UK Government should at the very least halt the planned increase in energy costs and consider a meaningful support package to reduce the costs of energy.

"Those in rural Scotland will be hit hard as they are off-gas, more reliant on electric and alternative fuel heating. These heating sources can add 50% to 100% the costs of heating a home compared to an on-gas household with the same circumstances.

"Rural off-gas communities need an uplift in support that recognises the increased costs endured by households. The current system isn’t fair, it doesn’t protect the most vulnerable in society. 81% of people told us that they were already rationing energy use and that 13% were reducing the use of medical equipment”.

EAS warned that an Alternative Fuel Payment only began to be rolled out during February 2023, meaning many Scots households will not receive any payments until March.

"This does little to support people during the winter months," said Mr Scott. "People require payment in advance of need, not in retrospect."

The analysis of bills estimates, which takes into account energy usage, and is based on official Scottish energy statistics, reveals a postcode lottery of average dual fuel energy costs in Scots local authority areas.

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The gap in prices between the highest and lowest dual fuel bills across Scotland's local authority areas has nearly trebled since 2021.

In April, 2021 the gap was nearly £730, but that is set to grow to nearly £2100.

People in the Comhairle nan Eilean Siar (Western Isles Council) area, where there is very little gas, would be hardest hit with nearly 20% of average take home pay still to be swallowed up by energy bills from next month if the price guarantee remains. That is equivalent to nearly two-and-half months of average take home pay.

There the typical annual bill would hit nearly £4600, a near £1300 hike in the space of 12 months and over £2000 more than the UK government energy price guarantee.

In the Argyll and Bute Council area, which includes the islands of Bute, Islay, Jura, Mull, Iona, Coll and Tiree, typical bills would be the highest in Scotland at just over £4800 a year - a rise of nearly £1400 in a year. But with typical wages in the area amongst the lowest in Scotland, it would swallow up just nearly 20%of annual take home pay.

Average bills in Argyll and Bute would be over 75% more than the typical household will be forecast to pay in Glasgow City this in April which at just over £2700 a year is the least expensive local authority area for energy costs in Scotland.

In the Shetland Islands annual bills would be due to rise from just over £3200 to nearly £4500 over a year.

In the Highland council area costs would soar from just over £3200 a year in April last year to nearly £4500 while in Aberdeenshire bills are due to spike by nearly 1100 in a year to just over £4000.

Outside Glasgow, West Dunbartonshire would experience the lowest estimated annual energy bills at around £2800 - a hike of nearly £640 in a year, while Renfrewshire would expect costs to rise from around £2,230 to just over £2900 and Edinburgh would face a near £730 annual hike with typical bills expected to hit just over £3000.

Analysts say one of the reasons for the energy bill gap is the condition of the housing stock, colder and wetter weather, and the limited availability of gas in rural Scotland meaning many only heat their homes with oil or electricity which is more expensive.

It is estimated that 17 per cent of households in Scotland, nearly 420,000 are not connected to the gas mains and 217,000, use fuels other than mains gas or electricity to heat their homes.

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Around 129,000 in the country use heating oil as their primary source of heating fuel, the price of which has shot up more than 230% in the last two years, from £0.31 a litre to £1.05.

Houses which are off the mains gas and use domestic heating oil, LPG or solid fuel to meet their energy needs are seen as part of the “hidden impact” of the cost of living crisis.

The "historic intervention" with the price guarantee introduced in October came after an 80% increase in domestic gas and electricity bills was earmarked for the first half of winter through energy market regulator Ofgem's price cap.