Energy crisis

Sturgeon’s summit calls for price cap freeze

ScottishPower’s CEO has proposed a fund

Pressure is mounting on the UK Government to freeze the energy price cap for all households and take action to support smaller businesses.

The call came from Scotland’s First Minister Nicola Sturgeon together with leaders of the energy companies and advice organisations following a summit at Bute House.

Ms Sturgeon declared the energy price crisis as a “public emergency”, adding to her weekend comments when she warned of a “looming disaster”. 

After the Bute House meeting, she said: “No single government, company or organisation can solve this crisis alone. It requires a collective response commensurate to the situation and the Scottish Government is now treating this situation as a public emergency.”

She added: “There was clear consensus at today’s summit that energy customers simply cannot be expected to carry the burden of further price rises in October, and that the UK Government must now commit to freeze the cap for all households and to support the energy companies to deliver that.

Follow Daily Business on Facebook

“This meeting was focussed on practical solutions, but without action by the UK Government to address the problem at source, the actions we discussed can only ever mitigate the impact of such dramatic price rises at the edges.”

Aside from scrapping the next price cap, UK ministers were urged to provide “significant additional support” to help households and businesses meet current energy bills and the impact of inflation more generally;

They should also take action to protect small and medium sizes businesses, and other organisations not covered by the price cap, from rising energy costs. There was no specific demand that the price cap be applied to businesses.

The summit called for reform the energy market for the longer term to prevent a repeat of the current cirisis.

Keith Anderson ScottishPower
Keith Anderson of ScottishPower has presented his plan to ministers (pic: Terry Murden)

The energy companies agreed to pursue all possible options to provide enhanced support to consumers who are in difficulty.

This group will reconvene following the announcement by Ofgem of the new price cap on Friday and the appointment of a new Prime Minister to determine further specific actions.

Scottish Power’s chief executive Keith Anderson presented the First Minister with plans proposed to UK Business Secretary Kwasi Kwarteng. He is proposing a £100bn plan to freeze energy bills for two years.

Government would guarantee loans to the energy companies to enable them to keep bills frozen while buying the gas needed for the next two years.

The £100bn figure is Scottish Power’s best estimate of the difference between what it will actually cost to buy the energy and the current price cap.

The deficit fund would be repaid through bills over the next 20 or so years.

Leave a Reply

Your email address will not be published. Required fields are marked as *

This site uses Akismet to reduce spam. Learn how your comment data is processed.