Energy Debt – 2 May 2024


The level of energy debt now outstanding in Scotland and the UK is quite extraordinary. The collective sum amounting to a staggering £3.1 billion. Yes, billion not million. With folk wondering how they can pay their bills, we’ve now got many who can’t even meet what’s already owed.

The situation’s also worsening. According to the UK fuel poverty charity National Energy Action, the average debt has increased by around 50% over the last 12 months. With the number of households in debt rising by around 20%.

For Scotland, with its more northern latitude and colder climate, it’ll be worse. Energy Action Scotland detailed that based on the Scottish Governments house condition survey of 2022, fuel poverty afflicted 31% of Scottish households. That was two years ago, it’ll be even more severe now.

The perversity of an energy rich land but it’s folk in fuel poverty’s most stark in the areas where much of the power’s produced. The north and islands closest to the oil and gas fields have fuel poverty levels nearing or over 50%. Wind on and offshore proliferates there and elsewhere in Scotland. Yet whilst 124 billion kilowatt hours of that energy source are to be sent south every year, enough to power every Scottish household 12 ½ times over, our people struggle to meet current and past bills.

£3.1 billion is a huge number making eyes roll, so what does it mean for folk, young and old? What’s the impact on those already suffering. Well according to Citizens Advice Scotland, the average fuel debt for someone presenting to them seeking help is £2300. That’s just the average and for some it’ll be more. Additionally, that’s only for fuel, there may we’ll be other debts as they juggle their finances to try and survive.

Meanwhile, Scope, the disability charity point out that disabled households require an additional £975 per month simply to have the standard of living of a non-disabled household. Yet referrals to their Disability Energy Support Service last year numbered over 7000 with 364 in debt; and the average debt amounting to over £1100.

Pensioners in Scotland already have the highest rates of fuel poverty of any household group, with 36% suffering. Even more scandalously, 24% are classed as living in extreme poverty. The cruel choice of heating or eating now being faced by many more and by the young, the old and the vulnerable.

Let’s also remember that energy isn’t just about heating but power. It’s not just turning on the thermostat or even putting on the cooker. In our modern society it’s also about accessing the washing machine to keep the bairns clean and tidy. Powering up the school laptop so the kids can achieve their full educational potential. Even the mobile phone for those seeking work or requiring logging in for details of where to go and what to do for that day’s gig.

Shamefully, it even applies to those recuperating or requiring lifesaving equipment. Ill health not only often keeps you housebound but makes you more susceptible to the cold. Keeping warm and hence having the heating on is essential for recovery. Similarly, dialysis or oxygen aren’t luxuries to prettify your home or indulge yourself, but essential for life itself. They too are challenged by energy costs and mounting energy debt.

Only a third of that overall debt figure has seen arrangements to pay reached. Even that may not be manageable for some. But that still leaves over £2 billion, with what’s described as arrears. Simply no repayment plan, struggling to meet current bills, never mind pay what’s outstanding.

Those enduring that nightmare aren’t the feckless or ne’er do wells who never seek to pay their way. Instead, it’s the poorest and most vulnerable in our society. This isn’t a Won’t Pay campaign as I once encouraged against Thatcher’s hated Poll Tax. Instead, it’s a just a Cant Pay situation faced by those who just don’t have the wherewithal.

That’s because another perversity of this privatised energy market’s that it’s those with least who pay most. As National Energy Action have pointed out standing charges have almost doubled over the past 5 years and households are now paying over £300 simply for connection. The charges are also higher in Scotland across all parts, than they are in London. It’s an energy poll tax.

Similar injustices are reflected in tariffs. Standard credit being far more expensive than direct debit. But for some, invariably the poorest, no other method is available. Moreover, whilst the tariff for pre-payment meters has at long last been reduced, injustices still continue with it. Debt repayment is added to consumption and standing charges. It can be a fair sum to pay before even a flicker of power’s provided. You can also be denied the ability to move to an energy provider offering a lower tariff.

The UK Government claim they have provided the Energy Price Guarantee but even there they played a sleight of hand. The average consumption on which it is based didn’t reflect either need or location. Worsening that they assumed an improvement in insulation and hence reduced consumption. But fine for those in a nice new build but not for existing tenants in older properties.

So, what needs done to get folk out this quagmire. Firstly, there must be a social tariff. The poor and vulnerable must have access to affordable fuel. Secondly, the moratorium on forced installation of pre-payment meters must be reinstated forthwith. Thirdly, the Warm Home Discount Scheme needs vastly improved and targeted. £150 is inadequate especially when you recall that it was £140 before this crisis began all those years ago. Finally, there needs to be a debt write off scheme. Helping those get out of the mess. We’ve bailed out banks, written off PPE wastage or fraud, so why not people. War on poverty not for weapons of war.

All that’s and much more is needed to end the perversity of an Energy Rich Scotland, yet Fuel Poor Scots.