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Energy Rich: Fuel Poor

In Scotland which is energy rich why are millions of Scots paying huge amounts to heat their homes and power their businesses?

As the UK prices for electricity and gas are hiked up, everyone will see huge increases in their bills. What is going on and why is the UK Government failing to protect citizens?

In the midst of this disaster which will drive ever more Scots into poverty, energy companies are making ‘obscene profits.’

BP is the latest fossil fuel company to declare billions in profits due to the rise in wholesale gas prices that is forcing energy bills to soar.

Ofgem announced that there will be a 54% increase in the energy price cap, due to rising global gas prices. Energy Price Cap Increase Forcing Even More Islanders Into Poverty

Meanwhile oil giant Shell announced $19.3 billion (£14.5b) in profits for 2021 and Exxon said that they had made $23 billion(£16.9b) profits last year.

Friends of the Earth Scotland’s Just Transition Campaigner Ryan Morrison said:

 “Yet again we see these wealthy firms extracting billions in profit from one of our most basic needs. BP and other fossil fuel bosses are getting even richer as the price of energy pushes millions more homes into fuel poverty and forces people to choose between heating and eating.”

“The UK’s energy system is fundamentally broken and this is clear evidence that it doesn’t work for people or the planet.”

As well as Scotland’s fossil fuel production, in 2020, 97% of Scotland’s electricity demand was met by renewables (mostly wind).

So what is going on when Scotland is producing all this energy and ensuring fossil fuel companies accrue such huge profits? Why are we seeing no benefit?

In fact things are going to get a lot worse.

Generation v Supply

Although Scotland generates huge amounts of energy this is then fed into the UK Grid. This UK energy system fails Scotland.

The areas which produce the most energy pay the highest prices to supply it back to their own homes and businesses. Inequality is built into the system which is becoming more and more obviously broken as millions will have to choose between heating and eating whilst looking out over the whirling blades of wind turbines.

What is the UK Government doing about this?

Chancellor Rushi Sunak has announced something he calls a £200 loan which will be levied on all our bills. No one has any choice in this. We are all going to be encumbered with a UK Government imposed debt.

Here’s money expert Martin Lewis to explain how it ‘works’:

“In October, on every single electricity bill in England, Scotland and Wales, you will either have your bill reduced by £200, or you’ll be given a bill credit. If you’re on prepay, they’ll pay it through your smart meter or they’ll give you a voucher or a cheque.

“This is going to happen. There is no choice about it. It is not optional and it is going to happen automatically on every single bill.

“Then from the following April, and for five years after that, you will then have your bill automatically – without choice – increased by £40 a year. That is how it will work.

“The best way to think of it is as a form of energy bill levy. We already have levies on energy bills, we all pay a part of our bill which goes towards green infrastructure, whether you have green energy or not. A part of our bill goes towards funding the cost of moving customers whose firm has gone bust to a supplier of last resort. That is a levy added to our bill.

“So what’s going to happen here, is in October, we’ll have rather strangely a negative levy. They will take £200 off bills. And then each April after that, they will add a £40 levy back on them for five years to recoup the cost.

“There is no personal loan to an individual. This isn’t about, you borrowed money, you pay it back. So if you’re living at home with parents and you move out in two years’ time, even though you didn’t get the £200, your bill will still be £40 higher – every household will be charged £40 more. You’ll simply get your energy bill and it will be higher because of this levy and the one this October will be lower.

“There’s no sort of loan account to an individual or even to a household. It’s more a negative levy than a positive levy. “

So as well as the enormous increase you will see on your bills, every household will have the extra £40 to pay.

This comes at a time when food prices have risen, wages have stagnated, businesses are struggling to recover from the double whammy of Brexit and Covid, and fossil fuel companies are making massive profits.

Campaigns to oppose the energy hike and the cost of living crisis being caused by this and other measures brought in by the UK Government are underway.

On Saturday 12th February protests will be held in Glasgow and Dundee called by the Scottish People’s Assembly. Protests will also be taking place in other cities in the UK.

Inflation is set to increase over 7%, energy bills are to rise by 58%, benefits have been cut and National Insurance is set to increase by 1.25% in April.

STUC General Secretary Roz Foyer said:

“While the Prime Minister’s party hangover continues, the Chancellor is picking our pockets in plain sight. His proposed action on energy is beyond woeful and his proposals to fund care from the pockets of low paid workers is a disgrace. Meanwhile he is starving the public sector of funds and has cut benefits.”

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Rendall Doocot, Orkney with wind turbine in the background Credit Bell

Fiona Grahame

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