ENERGY bills will remain sky high throughout winter, prompting calls from the SNP for Scotland to have control of its own resources.
The party have repeatedly called for powers over energy to be devolved to the Scottish Parliament, but following analysis that suggested households could be facing a £1849 bill in October, the party warned that this will “hammer household budgets in Scotland”.
Bills are set to jump by £221 from July 1, but even with a forecast suggesting bills could fall by 0.5% in October, volatility around the US-Iran ceasefire will mean prices will remain high.
Cornwall Insight said that while the current 60-day ceasefire has stabilised wholesale gas markets, conflicting reports on the reopening of the Strait of Hormuz, the patchy progress of peace talks and uncertain timelines for repairing key regional infrastructure meant prices remained high, if less volatile than in the spring.
Cornwall said it expected a typical household to be facing a bill of £1849 from October.
The SNP criticised the UK Government – who promised to lower energy bills – pointing out that they were now £600 higher than at the 2024 General Election.
While Ofgem is updating its definition of a typical consumer from July to reflect falling household energy use, which adjusts the headline figure to £1654, Cornwall said this represented “little change” on a like-for-like basis.
While July’s higher prices will be cushioned by warmer weather and lower household energy use, the October cap will land as people switch their heating back on and will have a greater impact on household finances.
Dr Craig Lowrey, principal consultant at Cornwall Insight, said: “The Iran ceasefire gave the markets some breathing room but this is a pause, not a resolution to the conflict.
“What comes out of the final agreement, if there is one, will matter enormously for energy prices. And even in the best-case scenario, the enduring effects from the conflict will be with us for a while.
“Infrastructure takes time to repair, supply chains take time to recover and households will be left dealing with the consequences for some time.”
Lowrey added that October bills tend to “hit harder” because of households turning their heating on again, but noted this year’s “difficult geopolitical backdrop”.
“The new Prime Minister will face real pressure to act on support for vulnerable households but the harder question is what comes after that – currently we are in a perpetual cycle of global shocks, high bills and short-term fixes,” he added.
“More permanent measures like social tariffs, moving levies into general taxation, or removing VAT on energy bills would take some of the pressure off bill-payers but there is no firm steer that these options are being actively pursued by Government at the moment.”
In response to the analysis, the SNP hit out at Labour’s failed promise to reduce energy bills.
Before the 2024 General Election, Keir Starmer’s party promised to cut bills by £300.
In July 2024, the price cap was £1568 each year, but it is now predicted to be £581 higher than that this year, at £1849.
Jack Middleton, SNP MSP for Aberdeen Central, said: “People across Scotland are already struggling to afford their energy bills – once the cold winter months arrive, thanks to the UK Labour government, things will only get worse.
“People in energy rich Scotland pay some of the highest energy bills in Europe while up to 1000 energy jobs are being lost a month – it is a disgrace and we are heading towards a Westminster winter of misery.
“In an energy rich country like Scotland, nobody should be struggling to pay their bills -and the fact that so many are shows the fundamental problem with having control of Scotland’s energy resources in the hands of Westminster governments.
“If Andy Burnham truly believes in devolution the first step he should take as prime minister must be to listen to the people of Scotland and give us power over our own energy resources.
“The reality though is that Energy-rich Scotland is paying the price of repeated Westminster failure. With the fresh start of independence we will bring down people’s bills.”
Ofgem’s price cap will lift by 13% or £18 a month from July 1 to £1862 a year for the average household using both electricity and gas after the Middle East conflict sent global energy costs soaring.
Prices rocketed after Iran responded to US and Israel attacks by blocking the Strait of Hormuz shipping route, through which a fifth of the world’s oil and gas is carried.
Ofgem will announce the next price quarterly cap level for October to December on or by August 26.
Figures earlier this week from Ofgem showed debt owed to energy suppliers reached a record high of £4.79 billion in the three months to March – a 5% increase on the last quarter and 15% higher year on year.
