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Energy bills to soar by nearly £700 as cost of living crisis worsens

Energy bills in Scotland are set to rise.
Energy bills in Scotland are set to rise.

Millions of households face a “hammer blow” increase to energy bills from April as regulator Ofgem lifted the price cap by more than 50%.

Consumers could be forced to pay up to £1,977 per year now, an increase from £1,271.

It’s feared people across the country will be plunged into fuel poverty as the ongoing cost of living crisis worsens.

Experts warned the increase to bills could force Scots to choose between “heating and eating”.

The Western Isles suffers the highest levels of fuel poverty in Scotland at 43%, compared to the national average of 24.6% of homes.

Some locals revealed last year they were often only putting on their heating for half an hour each day, while local support groups were struggling for funds.

‘Eye watering’ increase to household bills

Chancellor Rishi Sunak confirmed the UK treasury will step in to help low-income families in Scotland and across Britain to deal with the rising costs.

Westminster will directly give more funding to Holyrood so the SNP Government can subsidise bills and reduce costs for homeowners.

The money is worth around £290 million as a consequence of council tax rebates in England.

The changes to the current price cap are set to come into effect in April.

Nicola Sturgeon welcomed Mr Sunak’s announcement but said she believes Westminster can go further.

One in three of us already find bills unaffordable.

– Citizens Advice Scotland

Derek Mitchel of Citizens Advice Scotland warned: “This eye-watering increase is a hammer blow for consumers.

“One in three of us already find bills unaffordable and shamefully almost half a million people in Scotland have had to cut back on food to deal with unaffordable bills.”

In Scotland, the SNP were urged to do more to help households cope with the cost of living crisis.

Labour urged the government to give £400 to struggling families and to cut VAT on energy bills for a full year.

Chancellor Rishi Sunak promised help for low income families.

The price cap decision is likely to impact 22 million households across Great Britain, and applies to those who are on their energy supplier’s default tariff.

It was blamed on a global increase in wholesale gas prices.

Ofgem chief executive Jonathan Brearley said: “We know this rise will be extremely worrying for many people, especially those who are struggling to make ends meet, and Ofgem will ensure energy companies support their customers in any way they can.

“The energy market has faced a huge challenge due to the unprecedented increase in global gas prices, a once in a 30-year event, and Ofgem’s role as energy regulator is to ensure that, under the price cap, energy companies can only charge a fair price based on the true cost of supplying electricity and gas.”

Funds will be provided to the devolved administrations in Scotland.

– Chancellor Rishi Sunak

In the Commons on Thursday morning, the chancellor said: “We will help people with one of the biggest costs they now face: energy.

“Without government action this would be incredibly tough for millions of hard-working families. The government is going to directly step in to help manage those costs.

“People’s energy bills are rising because it is more expensive for companies who supply our energy to buy oil, coal and gas.”

He added: “Funds will be provided to the devolved administrations in Scotland, Wales and Northern Ireland to cover the costs of extending this discount.”

He is preparing for talks with Scottish Government finance secretary Kate Forbes.

Meanwhile, the first minister clashed with Labour’s Anas Sarwar in Holyrood as refused to back a windfall tax on oil and gas firms to help pay the bills.

Mr Sarwar criticised the SNP leader for her party’s refusal to support the one-off tax at Westminster on Tuesday.

The first minister said she fears the north-east would end up taking a major financial hit from drastic tax measures as the region transitions away from oil.

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