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Energy / Lib Dems call on government to take on full cost of next energy price hike

Energy providers say connecting housing scheme in the isles is ‘not commercial beneficial’

WITH average domestic energy prices threatening to double between now and January yo £4,266 and an inflation rate forecast to rise further, the Liberal Democrats are calling for an ‘energy furlough scheme’ that would cancel this autumn’s 70 per cent increase in the price cap.

Instead, Northern Isles MP Alistair Carmichael has suggested for the government to pay the multi-billion pound shortfall to the energy suppliers to prevent them from going bust.

Most domestic energy suppliers have already stopped connecting new housing schemes in remote and island areas, because they are running at a loss and connecting new customers has become unviable.

A spokesperson for OVO Energy, formerly SSE, said: “Right now, the energy supply sector is running at a loss and therefore it’s [connecting new customers] not commercially beneficial at the present time.

“Wholesale energy prices are incredibly high at the present time. This means we can’t offer our usual deals to new customers right now.

“OVO Energy is an energy retailer, rather than producer. It’s the producers of energy – companies like Centrica, BP and Shell – that are currently reporting big profits.”

A number of smaller energy suppliers went bankrupt as a result of the first massive increase in the energy price cap earlier this year.

The Lib Dems say that according to their own research cancelling October’s price cap increase and keeping it at the current cap of £1,971 would cost the treasury £36 billion.

Northern Isles MP Alistair Carmichael. Photo: Shetland News

It would save a typical household in the Northern ISles £1,300 per year, or £43 million overall, Carmichael said.

The government should recoup the cost by expanding the windfall tax on oil and gas company profits, and using higher-than-expected VAT revenues, the party said.

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While Orkney and Shetland consistently and reliably return Lib Dems to both parliaments in Westminster and Holyrood, it is fair to say that the party is just a minor force at the House of Commons where they have 14 MPs (up by three following success in recent by-elections).

The party is also calling for more targeted support for vulnerable and low income households.

This would include doubling the Warm Homes Discount to £300 and extending it to all those on Universal Credit and Pension Credit, while investing in insulating fuel poor homes to bring prices down in the long term.

Carmichael said: “Hard-working families in the isles are already struggling to make ends meet, and are seriously concerned about how they will cope with the predicted rise in energy bills.

“The best solution for that is to block the energy price rise before it happens. We need urgent action from the government – not a summer of complacency.

“The Conservatives are acting like deer in the headlights of a national emergency. Boris Johnson, Liz Truss and Rishi Sunak are simply not doing enough to put money back in the pockets of hard-working people. We cannot wait weeks more for a new Conservative leader to act.

As the Conservative leadership contest rumbles on Rishi Sunak has suggested a cut of VAT bills (it already is at the lower rate of five per cent), while Liz Truss is reported to favour lowering the tax burden and “not giving handouts” – a policy that will disproportionally favour the rich and will do little to help those on benefits or receiving the state pension.

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