SNP would cut household fuel bills by 5% in independent Scotland

Nicola Sturgeon, MSP, Deputy First Minister
Nicola Sturgeon, MSP, Deputy First Minister

Fuel bills in an independent Scotland would be cut by around 5% under new plans announced by Deputy First Minister Nicola Sturgeon during the SNP’s recent party conference in Perth.

Energy policy is currently reserved to the UK Government, which requires energy firms to increase the energy efficiency of people’s homes. The cost of this is passed onto consumers on their fuel bills.

The Energy Company Obligation is a UK Government legal requirement on energy companies to install energy efficiency measures to reduce the fuel bills of vulnerable households and lower carbon emissions.

The Warm Homes Discount provides eligible people with a discount on their electricity bills. Both schemes are provided by energy companies and therefore the cost is currently met by consumers’ fuel bills.

In an independent Scotland, the SNP Government would remove the cost of the Energy Company Obligation and the Warm Homes Discount from consumers’ bills.

Deputy First Minister Nicola Sturgeon pledged to seize the opportunity offered by independence to transfer responsibility for these measures from energy companies to the Scottish Government, removing the cost of these schemes from energy bills and instead meeting the costs through central funds. She said:

“Right now, the Scottish Government invests around £80m a year on energy efficiency schemes while a further £120m comes from a scheme designed in Westminster, operated through energy companies and paid for by a levy on peoples’ gas and electricity bills

“It is a disjointed approach, it doesn’t take account of Scottish priorities and it’s not as efficient as it could be. Tackling fuel poverty is one area where we could do so much better with the powers of independence.

“In an independent Scotland we will be able to tackle fuel poverty much more directly and ensure that energy companies always behave in a socially responsible way to protect vulnerable customers.

“An SNP government in an independent Scotland will remove the cost of energy saving measures and the warm home discount from energy bills. We will provide that funding from central government resources.

“This will mean direct government funding for fuel poverty schemes of at least £200 million per year. And this won’t just allow us to deliver our energy efficiency schemes more effectively. It will also save hard-pressed consumers money.

“We estimate that it will cut energy bills by around 5% – or £70 a year. Not a short term measure – but a real and lasting cut in Scottish energy bills.”

Pixie Energy

Pixie logo Pixie Energy is an incubator and a facilitator of strategic research and project work, focusing on energy regulation, policy and markets at the local and national level. Find out more about Pixie Energy here.

Local Energy Matters: Scotland

Local Energy Matters: Scotland is a free-to-download brochure with a focus on energy tariffs in the two Scottish electricity distribution regions, as well news on local energy and low-carbon schemes.

Previous editions can be download here.

Scottish energy market overview

You can read an overview of the Scottish energy market here.

Scottish Government energy feed