Energy price rises outstripping increase in Scottish household incomes

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Saturday, 04 January 2014 22:18

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  By Anne-Marie O’Donnell
 
Scots are battling to pay energy prices rising more than twice as fast as household incomes, new analysis has shown.
 
According to official figures, the amount Scots pay on average for gas and electricity has risen by a third since 2007 while average income in Scotland has increased by just 13 per cent. Gas prices have rocketed in recent years, with the average household shelling out 42 per cent more in 2013 than in 2007, from £384 to £546.

On top of rising gas, average Scottish households have increased their electricity spend by a quarter from £452 to £566 over the same period. Despite the rises, annual household income has gone up by just 13.5 per cent to £21,320, while the national minimum wage has risen by only 14.3 per cent.

The news comes just three months after energy companies announced yet more price hikes – increases set to hit Scots harder than the rest of the UK.

Jamie Hepburn, SNP MSP for Cumbernauld, said: “It is appalling that energy costs are increasing two and a half times as much as household income.  Westminster has failed in every single year since the recession of 2008 to have the minimum wage keep up with the cost of living.  Not only has Westminster’s inactions on the minimum wage been disastrous, it has also refused to do anything on spiralling energy costs.

“Without real action on energy prices we will see more and more households pushed into fuel poverty as energy costs eat up household budgets.  In contrast the SNP has pledged to move energy efficiency measures into general government expenditure in an independent Scotland, lowering energy bills for people in Scotland by £70 a year, or five per cent.”

In October it emerged that price increases by Centrica would leave Scottish Gas customers struggling to pay higher prices than other areas in the UK. While the average price increased by a substantial 9.2 per cent, customers in the north of Scotland were left facing hikes up to 11.2 per cent.

The rises are set to push average annual bills up by £123 per year to £1,444. The UK’s other major energy firms also announced increases, leaving customers across the country struggling to find extra income amid the challenging economic climate.

The latest news comes just days after the ‘big six’ energy firms were forced to deny allegations that households could have paid £150 more than necessary over the last three years because the companies had inflated their prices to make higher profits.

According to the Labour party, official figures suggested the big six had bought their power for nearly £4bn more than the average market rate and accused them of overcharging customers for electricity.

“These figures reveal the full extent of the way consumers have been overcharged for their electricity,” shadow energy secretary Caroline Flint was quoted in the Guardian as saying. “Energy companies always blame wholesale costs when they put up bills, but it now looks like they could have deliberately inflated prices to boost profits from their power stations.”

Mr Hepburn added: “With a Yes vote next year we will be able to secure the best deal possible for energy customers in Scotland, while working closely with the rest of the UK to reduce carbon emissions and provide a secure energy supply. We have also committed to ensuring all public sector workers in government and its agencies are paid the living wage.
 
“If elected, on independence – an SNP government will establish a Fair Work Commission that will set a minimum wage guarantee, ensuring that the minimum wage rises – at the very least – in line with inflation.”