Scottish Government calls for ‘urgent’ action on energy bills

The Scottish Government is calling for “urgent tangible actions” to reduce energy bills including a cut in VAT.

Holyrood ministers Michael Matheson and Shona Robison have written to the Westminster Government, saying there should be targeted support for those on low incomes.

They say the warm home discount scheme could be delivered by the Scottish Government “as part of a single, more flexible fuel poverty scheme”.

And they have told Kwasi Kwarteng that “time is running out time” for a new scheme to be implemented.

The Scottish energy and social justice secretaries have written a joint letter to the UK energy minister calling for four-nation discussions ahead of an expected increase in the energy price cap in April.

The letter says a number of measures have already been taken by the Holyrood government to reduce the burden on consumers in Scotland, but most powers around energy markets are reserved.

It says: “The UK Government must urgently take further tangible actions in addition to what suppliers (have) already been asked to do to support those in need.

“Since the start of the Covid-19 pandemic, we have been pressing the UK Government to provide more help to vulnerable households through the warm home discount scheme.

“We have set out how this could be delivered by the Scottish Government as part of a single, more flexible fuel poverty scheme in Scotland.

“However time is running out for a replacement scheme of any kind to be put in place for next winter, how these levy-funded schemes will operate from April remains in your hands and a clear, prompt decision is now needed.”

The letter continues: “We believe you should urgently consider a reduction to VAT as one of the most simple means of mitigating the impact on consumers in the short term.

“We would also urge you to make additional payments for those eligible for cold weather payments as a means of targeting support for those on the lowest incomes including older people on pension credit.

“Since meaningful collaboration between the UK Government and the devolved nations will be a vital component of any effective response to this situation, we would welcome an assurance that this is already part of your thinking and would like to meet as early as possible, to discuss these matters further.”

A UK Government spokesman said domestic fuel bills were already subject to the reduced rate of 5% VAT, while the Warm Home Discount provided a £140 rebate to more than two million low-income households.

The spokesman said: “We recognise families are facing pressure, which is why we are taking £4.2bn of decisive action to help households across the UK, and the Energy Price Cap remains in place to shield millions from high global gas prices.

“We are also supporting vulnerable and low-income households through initiatives such as the new £500m Household Support Fund, Warm Home Discount, Winter Fuel Payments and Cold Weather Payments.”