August brought the unfortunate news that household energy bills are once again on the rise as we head into autumn, laying waste to any notion that the price of gas and electricity might be gradually returning to precrisis levels.
Issuing its final forecast for the next quarterly price cap taking effect from the start of October, Cornwall Insight predicted a 9% increase will take the annual bill for homes using a typical amount of gas and electricity to an average of £1,714. The specialist consultancy, which is widely regarded for the accuracy of its predictions, was a mere £3 shy of the actual figure of £1,717 that was confirmed a few days later by industry regulator Ofgem.
This means that bills will still be roughly 65% higher than prior to the Russian invasion of Ukraine and is firm confirmation that the UK’s energy crisis is far from over.
READ MORE: Household energy bills heading higher again this winter
The Labour government has invested considerable political capital in plans to establish Great British Energy, a publicly-owned investment vehicle, to enable a “just” transition that creates huge numbers of new skilled jobs while also bringing down the average household bill by £300 annually.
GB Energy won’t supply households directly, but instead will co-invest with the private sector in eco-friendly technologies such as wind farms, green hydrogen, solar power and nuclear energy. It has a budget of £8.3 billion over the course of this Parliament which its backers hope will unlock £60 billion in private sector investment. It’s questionable whether even the considerable chunk of public money being handed over to GB Energy will be enough to achieve its stated goals, and in any event none of the activities in these early days of its inception will assist the millions of households struggling to keep the heating on this winter.
There was further unwelcome news when Transport Secretary Fiona Hyslop announced that the suspension of peak train fares that has been in place for nearly a year across the ScotRail network will come to an end on September 28.
The pilot project to scrap peak fares has cost about £40 million in taxpayer money but is said to have enjoyed “limited” success with passenger levels increasing to a maximum of around 6.8%. According to the Scottish Government, which took control of ScotRail in April 2022, this needed to hit 10% for the policy to be self-financing.
READ MORE: Huge fare hikes won't bolster the ScotRail business model
Faced with budget constraints and a growing deficit, the move to axe the policy makes sense on paper but critics have billed it as a retrograde tax on workers already suffering from a service riddled by unreliability amid an ongoing pay dispute with train drivers. While it seems that quarrel is now on the verge of settlement, it will come as little comfort to those facing huge hikes in commuter fees if they choose or have no alternative but to continue travelling by train.
A peak return ticket from Glasgow to Edinburgh is set to nearly double to £31.40, while a train from Glasgow to Dundee will cost £47.80. An anytime return from Barrhead to Glasgow will jump from £4.80 to £7.20.
Elsewhere, Nationwide Building Society has started counting up the cost of its mega-deal to buy Virgin Money, the owner of the former Clydesdale Bank with extensive operations in Glasgow.
READ MORE: Counting the cost of Nationwide mega-deal for Virgin Money
In what is likely to be its final report as an independent publicly-listed company, Virgin Money revealed on August 2 that it had already spent in the region of £10m on fees related to the £2.9bn takeover by Nationwide which was announced in March and is expected to complete by the end of this year. The total cost in fees and expenses is expected to come in at around £80m with Nationwide covering roughly £41m of the bill and the rest paid by Virgin Money.
That, however, won’t cover the entire tab. While Nationwide has yet to spell out the full cost of combining the two businesses, it has indicated that further substantial investment will be required to bring Virgin Money’s customer service and IT systems up to scratch.
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