The Scottish Government has called on the Chancellor to deliver a substantial cut to household energy bills when he unveils the UK Budget this week.
Social Justice and Housing Secretary Shirley-Anne Somerville said Chancellor John Healey must use Wednesday’s Budget to tackle the cost of living and reverse what ministers in Edinburgh say is a projected real-terms cut to Scotland’s block grant.
The intervention comes as households face another expensive winter, with the Ofgem energy price cap rising by four per cent this month.
The cap for a typical household paying by direct debit is now £1,723 a year, up £60 from the previous quarter. The figure is not a maximum bill, with the amount people actually pay depending on their energy use.
Ms Somerville said energy costs were continuing to cause hardship across Scotland and argued that further intervention was needed.
She said: “The Chancellor must meet some key tests when he presents the Budget this week.”
The Scottish Government wants the Treasury to reverse the projected real-terms reduction in Scotland’s block grant for 2027-28, which it says would put further pressure on spending on health, education and measures designed to tackle poverty.
It is also pressing the UK Government to go further on energy costs.
Ministers in Edinburgh have previously proposed a social tariff which would provide targeted discounts to lower-income households.
Scottish Government modelling suggests around 660,000 households in Scotland could see their estimated energy bills reduced by an average of about £700 under its proposal.
The UK Government has already introduced measures designed to reduce bills this winter.
VAT on domestic electricity was temporarily cut from five per cent to zero on 1 October and will remain at that level until 31 March 2027.
The Treasury estimates the measure reduces the annual Ofgem price cap by around £45 compared with what it otherwise would have been.
Around six million households across Britain are also expected to qualify for the £150 Warm Home Discount this winter.
Despite those measures, the overall price cap increased in October as higher wholesale gas prices pushed up the cost of supplying homes.
Ms Somerville said the Scottish Government also wanted Wednesday’s Budget to remove a number of welfare policies it argues are contributing to poverty.
It has called for the benefit cap and bedroom tax to be scrapped, Local Housing Allowance rates to be unfrozen and changes made to Universal Credit rules affecting younger parents.
The Scottish and Welsh governments made similar demands in a joint letter to UK ministers earlier this month.
Ms Somerville said Scotland needed sufficient funding to reduce NHS waiting times, improve schools and lift children out of poverty, arguing that those ambitions would become harder if the block grant fell in real terms.
She also claimed it was difficult to justify high household energy costs in a country which produces substantial amounts of energy.
The Chancellor will deliver his first Budget in the House of Commons on Wednesday 28 October.
The statement is expected at around 12.30pm following Prime Minister’s Questions.
Mr Healey has said the Budget will maintain the UK Government’s fiscal rules while giving families and businesses “breathing space” from cost-of-living pressures.
The Office for Budget Responsibility will publish its latest economic and public finance forecasts alongside the Budget.