Nationalised energy should be an option, says Sturgeonon August 21, 2022 at 12:33 pm

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Scotland’s first minister says all options should be on the table to tackle crisis in energy costs.

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Nicola Sturgeon has said renationalising energy companies should be “on the table” to tackle the crisis caused by rising power costs.

Scotland’s first minister warned a “looming disaster” was set to get worse if the next household energy price cap rise comes into effect in October.

Ms Sturgeon said Ofgem’s next increase, to be announced on Friday, should not be allowed to go ahead.

The UK government said struggling households will receive some support.

Last week the Scottish government estimated 36% of homes will be in fuel poverty.

It is defined as the cost of heating a home being more than 10% of household income, after tax and housing costs have been deducted.

Based on an Ofgem price cap of £2,800, by October the status would apply to 906,000 of all households across Scotland.

Ms Sturgeon is to convene a summit this week with energy companies on improving advice and support for people struggling with energy bills.

Scotland’s major energy suppliers, including Scottish Power, OVO Energy, Centrica, Octopus and E.ON, will attend, as well as industry bodies and anti-poverty groups such as the Poverty Alliance and Energy Action Scotland.

A person looking at a smart meter on a tablet

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Ms Sturgeon told BBC Scotland’s The Sunday Show: “I want us to come together to call on the UK government to take the action only it can take.

“There is a looming disaster that is already unfolding but it is going to get worse.

“This is going to cause destitution and devastation, this will cause loss of life if real action is not taken to stem this crisis.”

She called for a cancellation of the next increase in the energy price cap, and for the financial support already offered by the UK government to be doubled.

Ms Sturgeon added: “This further increase in people’s energy bills can’t be allowed to go ahead because it is making it impossible for people to provide the basics for themselves and their families, but it is also continuing to fuel inflation, which, of course, is causing the problem in the first place.”

‘Focus on reality’

The first minister said renationalisation of energy companies “should be on the table”, but Scotland did not have the power to do that.

Ms Sturgeon said she had argued for these powers to lie with the Scottish government but they needed to “focus on reality” as it stands now and push the UK government to act.

She said: “Let’s focus on getting them to exercise the powers they have campaigned to keep in their hands rather than constantly deflect the questions to a government that doesn’t hold these powers.”

Couple looking at a bill

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Boris Johnson has agreed to talks between the UK and devolved governments over the cost of living crisis but no date has been set for the discussions.

Meanwhile, UK Business Secretary Kwasi Kwarteng said households struggling with the rising cost of living in the UK would receive some help this winter.

Mr Kwarteng, an ally of Tory leadership hopeful Liz Truss who has been linked to the chancellor position, has not yet outlined how the government intends to support people.

Writing in the Mail on Sunday he insisted Ms Truss’ pledges to reverse an increase to National Insurance and introduce a temporary moratorium on energy levies were examples of her willingness to “look at what more can be done”.

The cost-of-living crisis has been driven by a series of issues, including inflation outstripping wage increases and record energy bills due to a surge in wholesale gas prices.

Customers have been warned to expect annual household energy bills to reach more than £3,500 after October.

No ‘quick fixes’

Energy consultancy Auxilione used Friday’s gas prices to suggest typical household energy bills in the UK could hit as much as £6,000 a year from April 2023.

Labour has pledged to extend the oil and gas windfall tax to fund a freeze to the energy price cap at its current level of £1,971 for six months.

Stuart McIntyre, economics professor at Strathclyde University’s Fraser of Allander Institute, told BBC Scotland rising energy prices was one of of the key drivers of inflation, which could exceed 13% over the next few months.

“I’d urge people to be sceptical of politicians promising quick fixes to what is a very difficult problem,” Prof McIntyre said.

“What we need is a thoughtful, detailed redesign of energy markets, not something designed to win an election… to try and get something that will deliver more realistic and stable energy prices going forward.”

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