Since households are being forced to pay through the roof for Westminster failures, the SNP has urged the UK government to cut energy costs by at least 20% this year.
The energy price cap, which is updated every three months, was confirmed by Ofgem, the independent regulator for the British energy market, to have increased by 20% to £4,279 in January of this year.
However, the UK Government’s Energy Price Guarantee (EPG), which caps how much the average household pays for its wholesale energy and lowers the average annual bill to £2,500, protects UK households. The cap is scheduled to increase to £3,000 in April of this year.
SNP Westminster leader, Stephen Flynn has since called on the UK Government to instead cut energy bills by 20 per cent from April as the wholesale price of gas falls.
Mild weather in Europe in recent weeks has reduced gas demand and left reserves in storage facilities in Europe at higher levels than previously expected.
Read also: New Zealand cancels flights as severe flood from Cyclone Gabrielle looms
A new analysis, produced for the SNP, claims there has been a 59 per cent decrease in the wholesale price of gas since the EPG was introduced in October last year. The research said with the forecast cost to the Treasury of the EPG falling from £42 billion to £37 billion, and further reductions likely if the price of gas continues to fall, savings can be passed onto households.
The UK Government, however, said that prices were volatile and can “increase as fast as they fall”, adding it would not be sensible to assume that projected savings now would be realised.
The SNP call comes as BP, Shell, Exxon and other major energy companies reported record profits.
In his reaction, Flynn said: “Scotland is an energy-rich country but households are being forced to pay through the nose for Westminster failure – as the Tories trash the economy and the cost of living soars,”. “Tory plans to increase people’s energy bills, yet again, from April are abhorrent and must be stopped”.
Speaking further, he said, “many households are already paying three times what they paid a year ago, while energy companies make record profits and the Tories refuse to act,”. “Instead of ramping up people’s bills, the Tories must cut them by at least 20 per cent and commit to further reductions as wholesale prices fall.”
He said that Westminster should continue its £400 Energy Bill Support Scheme for all households beyond March this year when it is due to end.
However, the UK Government responded by saying it would be irresponsible to plan fiscal policy on “volatile prices”. An HM Treasury spokesperson said, “wholesale prices falling is good news, but as we have all seen, prices are volatile and can increase as fast as they fall”.
“If prices return to their late August level, the Government would need to borrow an extra £42 billion and potentially increase taxes to continue funding the Energy Price Guarantee at current levels,”. “The way the Energy Price Guarantee operates means households will still see lower bills if gas prices continue to fall”.
This story was adapted from Independent.
