Scotland’s Energy Secretary has warned there is a “real risk” people could die in the months ahead with the country facing its highest hike in fuel bills yet.
MSP Michael Matheson said there could be up to 900,000 homes in Scotland either in fuel poverty or extreme fuel poverty as a result of the increases in fuel costs.
His comments come after energy regulator Ofgem announced this week that bills will rise typically by £693 a year in the UK from April as it raised the price cap – a jump the Bank of England warned is set to create the biggest fall in living standards since comparable records began three decades ago.
Speaking on BBC’s The Sunday Show, Mr Matheson described the UK Government’s measures in place to deal with the crisis ahead as “wholly inadequate”.
He said ministers south of the border have more control over “the tools needed” to prevent the poverty crisis from worsening.
“The action proposed by the UK Government last week is insufficient to deal with the scale and the nature of the crisis, which many individuals, particularly low income households, are now facing,” Mr Matheson said.
“With the very serious increase we are now seeing in energy prices, it’s going to be compounded by the increase in National Insurance contributions and also with cutting Universal Credit.
“There is a real crisis building here, and it has been on the cards for some time now.
“There is a real risk that lives will be lost this year out of this financial crisis.”
Earlier in the week, Chancellor Rishi Sunak announced that all households will receive a £200 discount on bills from October, but that will have to be repaid over five years.
He said this will help reduce anxiety over the increase and take the “sting” out of the rise.
But Mr Matheson slammed the measure saying it will likely increase poverty due to households having to pay back a loan.
“They (UK Government) should move away from this £200 loan… and convert that to a grant because if fuel prices stay high over the course of the next couple of years, and that could be the case, it could actually end up forcing more homes into poverty because households are not only having to face high fuel prices, but they’re also having to face paying back the loan which the government has provided them with as well.”
He also urged the UK Government to extend the Warm Home Discount Scheme which allows households to apply for a £140 reduction on their electricity bill for winter 2021/2022.
Earlier, SNP MP Ian Blackford said the UK Government proposals to deal with the bill hike “won’t even scratch the surface and are nowhere near enough to help families cope”, and will leave them “hundreds or thousands of pounds worse off”.
But MP Greg Hands, the UK Government’s Energy Minister, said he “disagreed”, adding, “we are doing a lot”.
He pointed to the estimated £290 million being paid from the UK Treasury to Holyrood and, the UK Government’s £200 discount for households in Scotland, which will have to be paid back over five years.
“On top of that, we’ve got winter fuel payments, the Warm Home Discount cold weather payments and the Household Support Fund,” he added.
“There’s a lot going in from the UK Government.
“We recognise the difficulties that many households will be facing with a rise in prices.”
He said the UK is “not immune” to the rise in worldwide energy prices, but that the Government is “doing a lot to make sure that households are in a better position”.
When asked if the £200 payment could be a grant, Mr Hands defended the measure saying, “it is designed to assist people into the next winter to pay for those bills and will be clawed back over a five-year period, so that’s quite a long period of time that people will have a chance to repay that”.
