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

A new analysis revealing the extent of the impact rising fuel costs are having on the nation shows typical dual-fuel bills are set to skyrocket in Scotland from April, despite the UK government not expecting to extend its energy price guarantee by 2500 £ per year increased to £3000.

A price guarantee of £2500 means the typical Scottish household will still be spending almost £3500 a year on energy bills – that’s about £2100 a year more than in 2021 and an increase of almost £900 in April last year. This would mean that the typical energy bill of a Scottish household would account for over 13% of the average Scottish net income from next month.

Parts of Scotland would still have to come up with nearly double the £2500 energy price guarantee if concerns remain that not enough is being done to support Scots in the cost of living crisis.

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

While the price guarantee should push typical UK household energy bills to £3,000 a year from April onwards, the UK government is expected to keep the level at £2,500 a year for a further three months. But a crucial £400 winter rebate is ending – which will see bills rise by 20% from next month.

If the Chancellor stuck with the plan to increase the price guarantee to £3000, typical annual dual-fuel bills would reach £4100 in April – £600 more than if kept at £2500.

Energy Action Scotland (EAS), the only national campaigning organization set up to end energy poverty in the country, has said in an appeal to the government that a quarter of households, over 600,000, are struggling with energy bills.

And she believed that raising the price guarantee to £3000 would push around 1 million of Scotland’s 2.48 million households into energy poverty in Scotland – where households spend 10% or more on reasonable fuel needs and if the remaining household income is insufficient to maintain a decent standard of living.

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

Official data shows that the lowest rates of energy poverty are associated with higher energy efficiency standards. Around 20% of Scottish households living in dwellings after 1982 and 20% of households living in dwellings rated at an average energy rating or better were fuel poor.

The group warned that if the UK Government honored the £3000 price guarantee, fuel poverty in some Scottish communities would rise to 75%.

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

Experts recognize that climate plays a significant role in households having to use energy to keep warm.

According to the 2019 Scottish Home Condition Survey, around 50% of all homes have an EPC of D or below.

EAS says there is a “growing body of evidence” showing that more targeted financial support is needed to “avoid the worst of the current crisis”.

EAS chief executive Frazer Scott said the £400 loss was still a “very significant” blow to consumers.

“Households across Scotland are facing ever-increasing energy costs, which is having a devastating impact on already stretched household budgets.

“Helping people is a political decision. The UK government should at least halt planned increases in energy costs and consider a meaningful support package to cut energy costs.

“Those in rural Scotland will be hit hard as they are without gas and are more reliant on electric and alternative fuel heating. These heat sources can increase the cost of heating a home by 50% to 100% compared to a home using gas in the same circumstances.

“Rural emissions communities need support that recognizes the rising costs that households are enduring. The current system is not fair, it does not protect the most vulnerable in society. 81% of people told us they are already rationing energy use and 13% are reducing their use of medical devices.”

EAS warned that an alternative fuels payment was not introduced until February 2023, meaning many Scottish households will not receive payments until March.

“This does little to support people during the winter months,” Mr Scott said. “People ask for payment up front, not afterwards.”

Analysis of the bill estimates, which takes energy consumption into account and is based on official Scottish energy statistics, shows a postcode lottery of the average dual-fuel energy cost in Scottish local authorities.

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The price difference between the highest and lowest dual fuel bills in Scottish local authorities has almost tripled since 2021.

In April 2021 the gap was almost £730 but that is expected to widen to almost £2100.

People in the Comhairle nan Eilean Siar (Council of the West Indies) region, where petrol is very scarce, would be hardest hit, with almost 20% of the average net wage still being eaten up by energy bills from next month if the price guarantee stays in place . That corresponds to almost two and a half months of average net remuneration.

There the typical annual bill would be almost £4600, an increase of almost £1300 over 12 months and over £2000 more than the UK Government’s 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 – an increase of almost £1400 Year. But as typical wages in the area are among the lowest in Scotland, this would only eat up almost 20% of net annual pay.

The average bills in Argyll and Bute would be over 75% higher than what a typical household is expected to pay in April in Glasgow City, which at just over £2700 a year is the cheapest municipality for energy bills in Scotland.

In Shetland, annual bills would go from just over £3200 to almost £4500 over the course of a year.

In the Highland Council Area, costs would rise to almost £4500 from just over £3200 a year in April last year, while in Aberdeenshire bills will rise by almost £1100 in a year to just over £4000.

Outside of Glasgow, West Dunbartonshire would see the lowest estimated annual energy bills at around £2,800 – an increase of nearly £640 in one year, while Renfrewshire would see costs rise from around £2,230 to just over £2,900 and Edinburgh ahead of a close one Annual increase of £730 with typical bills expected to be just over £3000.

Analysts say one of the reasons for the energy bill gap is the state 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, almost 420,000, are not connected to the gas grid and 217,000 use fuels other than gas or electricity to heat their homes.

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

Homes that are off the gas grid and meet their energy needs on heating oil, LPG or solid fuels are seen as part of the “hidden effects” of the cost of living crisis.

The “historic intervention” with the price guarantee, introduced in October, came after energy market regulator Ofgem’s price cap called for an 80 per cent increase in gas and electricity bills for the first half of winter.