John Swinney has confirmed plans to create a new “social tariff” to slash energy bills for Scots on low incomes.
The Daily Record exclusively revealed last week that SNP ministers had formed a working group with suppliers including E.ON, Scottish Gas and EDF on how discounted deals for vulnerable households could work. It comes as average bills are set to be hiked by 10 per cent, or £149, from October 1 – while nearly a million pensioners will lose the Winter Fuel Payment after it was cut as a universal benefit by Labour.
Addressing MSPs, the First Minister said his Nats government had “engaged with energy suppliers over recent weeks on the options available to reduce bills for households across Scotland”. As revealed by the Record, the Holyrood administration has enlisted energy firms and consumer groups to form a working group to design the new tariff offering discounted energy to at-risk households.
If green-lit, it could mean cheaper bills and support for those already struggling with extreme fuel poverty – as well those at risk of falling into fuel poverty, such as pensioners who will no longer qualify for the Winter Fuel Payment but remain on low incomes.
It could also benefit Scots with health conditions who require more energy to run life-saving medical equipment at home. Any decision to introduce a social tariff would ultimately need to be made at Westminster as regulation of the energy market is reserved.
Quizzed on the plan by SNP MSP Emma Roddick at First Minister’s Questions, Swinney said: “We are now establishing a working group to co-design a social tariff mechanism that would secure cross sector support and demonstrate the viability and positive outcomes of the policy to the United Kingdom government. The government will consider eligible fuel types, consumer eligibility, regulatory environment, funding and delivery.”
Highlands and islands MSP Roddick asked the FM if he agreed the decision by Keir Starmer’s government on the Winter Fuel Payment would “disproportionately” hit people in her region where winters are colder. Swinney replied: “I do recognise those issues, and those points have been raised by the government with the United Kingdom Government… this issue was essentially landed on the Scottish Government along with a budget cut of £160million.
“The work we are undertaking on the co-design of a social tariff has been taken forward by the Minister for Climate Action, Dr [Alasdair] Allan, and we are engaging with relevant parties on that question. Obviously, this is an issue which requires United Kingdom Government agreement and engagement, and we will pursue that as a consequence of these discussions.”
Scottish Labour MSP Paul O’Kane responded sarcastically: “I’m sure, after 17 years, another working group will be, of course, warmly welcomed.”
Andrew Bartlett, boss of Advice Direct Scotland which is part of the working group, said: “It is good to hear the First Minister is supportive of efforts to design a social energy tariff and that the scope of the working group will be wide, considering different fuel types and funding options.
“Our view is that the most vulnerable households should automatically be placed on the cheapest energy deal through an opt-out system, so they do not have to take any action to benefit. Otherwise, thousands of people in need are likely to miss out.”
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