Every winter, the same argument returns. Energy prices rise, households struggle to heat their homes and promise is made to make bills more affordable. This week’s Budget is no different, with the Chancellor promising to give households ‘breathing space’ through measures including the removal of gas standing charges.
John Swinney has demanded ‘substantial support’ for households, arguing that Labour must fulfil its election promise to reduce energy bills by £300. The Government has also indicated that green levies could be moved from energy bills into general taxation.
These measures could offer some relief. But they raise a more fundamental question: why are we still treating fuel poverty as a problem to be managed through charges to bills, rather than a problem to be eliminated through investment in how our homes are heated?
The proposed removal of gas standing charges illustrates the limitations of this approach. Standing charges are fixed daily fees, paid regardless of how much energy a household uses. The Treasury says removing them could save 60% of households an average of £45 a year, with the costs instead added to the price of each unit of gas consumed.
That is not the same as removing the costs. It redistributes them. Households using less gas could pay less, while those using more could end up paying more. The Treasury has promised targeted mitigation for some households, but millions will not automatically benefit.
There is a legitimate argument for changing a system in which households pay simply to remain connected to an energy supply. But a modest redistribution of costs is not a solution to the underlying problem of expensive energy.
It also exposes a geographical inequality in how these policies work. Scotland and Northern Ireland have significant numbers of households that rely on oil rather than mains gas for heating. In Scotland, around 6% of households use oil as their primary heating fuel, rising to 28% in rural areas. In Northern Ireland, the figure is 63%.
Households heating their homes with oil (or who are reliant on electricity) will not benefit directly from the removal of gas standing charges. They still face the costs of keeping their homes warm, often without access to the same heating options available to households connected to the gas grid. A policy presented as relief for energy bill payers will therefore leave many households outside its main benefit.
The energy crisis is not experienced equally. A household in an efficient home can use less energy to stay warm. Someone living in a poorly insulated property may spend considerably more simply to achieve the same temperature. For those on low incomes, the choice can become whether to heat their home adequately or cut back elsewhere.
Changing how energy costs are collected does little to address that difference.
The Chancellor has said the Budget will begin the long-term action needed to bring energy costs down. That is the commitment that deserves the most scrutiny. If ministers recognise that global shocks leave households exposed, the answer cannot be limited to finding new ways to distribute their consequences.
Scotland needs a sustained programme of investment in home insulation, draught-proofing, efficient heating systems and the skilled workforce required to install and maintain them. Public funding should prioritise households in fuel poverty and homes where improvements would make the greatest difference, particularly older properties and rural homes that are expensive to heat.
This would not remove every source of energy-price volatility. But reducing the amount of energy a home needs would make households less vulnerable when prices rise. Replacing inefficient heating systems with suitable, affordable alternatives could also reduce dependence on costly fuels, provided households are not left facing unaffordable installation costs or higher running costs.
Such a programme would require more than short-term grants or isolated schemes. It needs long-term funding, coordinated delivery and the capacity to improve homes at scale. It should be treated as essential social infrastructure, not an optional environmental project.
There is also a question about how energy is funded. Moving green levies from bills into general taxation could make the system fairer by spreading costs more broadly. But ministers must explain how those costs will be distributed and ensure that removing charges from bills does not simply leave essential investment underfunded.
The same principle applies to the Scottish Government’s finances. If its real-terms funding is falling while household energy costs remain high, ministers must make clear how they intend to support vulnerable households and deliver the longer-term improvements required. Immediate assistance and structural reform are not competing priorities. Households need both.
The Budget may offer some welcome breathing space and a bit more fairness. But £45 a year for some households will not transform the lives of people who cannot afford to heat their homes, and changing standing charges will not make an inefficient house cheaper to heat.
We should not have to repeat this debate every winter. Scotland needs an energy strategy that does more than compensate people for the failures of the system: one that invests in homes that need less energy, heating that people can afford, and infrastructure that makes fuel poverty progressively less likely.
The real test is not whether ministers can make this winter’s bills slightly easier to manage. It is whether they can build a system in which keeping a home warm no longer depends on whether a household can afford to pay.