Scot-Govt tells Big Six to ‘do better’ in tackling fuel-poverty

The BIg Six suppliers dominate the UK household gas and electricity market.

Britain’s Big Six energy companies have been told by the Scot-Govt that they ‘must do better’ to tackle fuel-poverty in Scotland.

This was the outcome of an ‘energy summit’ convened by Scottish Equalities Minister Angela Constance (MSP) which she called to look at ways to help low income households living in fuel poverty and facing a ‘poverty premium’ from paying more for their energy.

Senior managers from the Big Six – including Scottish Power and Scottish & Southern – were asked to identify further actions they could take that will make a material and important difference to low income families in Scotland. 

Constance also used the opportunity to discuss two recently published independent reports looking at fuel poverty in Scotland. The reports made over 100 recommendations, including two key recommendations for energy companies on energy costs. The Government will formally respond to the reports next year.

Paul Wheelhouse, the Scottish Energy Minister, also attended the summit – but the fact that the lead role has been taken by the Equalities minister indicates that instead of being ‘only’ an energy issue, fuel poverty is instead now moving its political portfolio into housing and social work, which may result in greater Scot-Govt action in tackling this issue. ** See also below: 

Angela Constance, MSP
Angela Constance, MSP

Speaking afterwards Constance said: “This meeting was a good start on the road to fairer energy costs and I am pleased there was collective agreement from all the energy companies round the table to explore ways in which they can achieve this.

“Tackling poverty, including fuel poverty and reducing the inequalities that exist in our society is an absolute priority for me. This requires action to increase incomes as well as driving down the extra costs that low income families in particular often face. 

“We want to effectively tackle this poverty premium in the energy market and ensure that all consumers are paying a fair price for their energy and issues such as consumer debt are managed fairly. 

“There are many good examples out there from energy companies helping those struggling with fuels bills and I would like to see this best practice replicated across the whole industry – the bottom line is they have the means and the opportunity to really make a difference and after today’s meeting I believe the appetite to do so is there too.

“The two recommendations from the independent fuel poverty reports outline clear actions by the energy companies that will provide a good start to addressing the inequalities experienced in the energy market.”

Recommendations from the report include –

  • Energy companies to launch a proactive engagement campaign to guide customers on restricted meters through an assessment of their heating needs and ensure they are transferred to the cheapest and most appropriate deal for their needs.
  • Identifying specific measures to support customers in rural and off-gas grid areas who suffer from higher energy prices than the rest of Scotland.

Strategic Working Group: http://www.gov.scot/Publications/2016/10/2273/downloads#res-1

Task Force: http://www.gov.scot/Publications/2016/10/2017

 

Energy spending in rural Scotland is significantly higher than urban areas

Meanwhile, researchers at Glasgow Caledonian University have found the energy-spend gap between urban and rural households in Scotland is significantly greater than that predicted by existing government figures.

Dr Keith Baker and PhD student Ron Mould led the research, named the Speird Project, which was funded by the Eaga Charitable Trust, a grant-giving trust that supports projects and research that contribute to combating fuel poverty.

For their Speird Project, Dr Baker and Mr Mould worked with a range of partners to acquire similar data for households in regions across the rest of Scotland, avoiding modelled or estimated data.

Dr Baker said: “In Renfrewshire, for example, we found a significant difference exists between the heating-fuel spend of households in urban areas and those in rural and island areas of Scotland.

“Statistics given in, for example, the Scottish Government’s annual Scottish House Conditions Survey are median statistics – which don’t offer an accurate geographical breakdown.”

He added that the research also provides significant new evidence to question the assumption that there is a linear relationship between household income and expenditure on energy for those on the highest and lowest incomes.

Other key findings of the research include evidence of rural householders self-limiting their expenditure on heating, and evidence of households where all occupants are full-time employed spending more on their energy needs than those in which all occupants were retired.

Dr Baker said: “The results serve to demonstrate how the nature and distribution of household expenditure on energy is the result of a wide and complex range of influences, including occupant behaviour, and this complexity is significantly greater among the fuel poor and households in rural and island areas.

“What is needed is a risk-based approach that focuses on delivering maximum benefits to those most in need, while addressing the additional complexities of tackling the problem in rural and island areas.”

Assisting GCU in this study were ALIenergy (community energy organisation based in Lochaber and Argyll and Bute), Highland Cooncil, Orkney Isles Cooncil, Lochalsh and Skye Housing Association, and SCARF, a community energy organisation in Aberdeenshire.

The Speird Project report can be downloaded here.

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