Fuel Costs – 15 September 2022

Scrutiny of Liz Truss’s plan to address the energy cost crisis has been overshadowed by events but will return with a vengeance.

For the measures are far from adequate, as will be painfully evident when bills start arriving, and at levels that will remain eye-watering for most and simply unaffordable for many.

The UK Government’s strategy also includes more nuclear, fracking and a rush to extract every last drop of oil and gas from the North Sea, that’s both costly and environmentally damaging, if not disastrous for our planet.

It’s therefore going to be a cruel winter for many and a bleak future for us all if these plans proceed.

Freezing the average energy bill at £2,500 is far from sufficient to protect the poorest, yet generous in the extreme to the wealthy. It follows on from plans to cut taxes benefitting the wealthiest and the corporates, while those with the least pay disproportionately more.

With the cost of these energy plans to be paid back by the taxpayer, the pain and injustice will be constants for years to come, other than for the privileged few where there’ll be bonuses aplenty.

Nor was there any attempt to address the lingering injustice of pre-paid meters where those most vulnerable pay higher standing charges and tariffs. All that was needed was a direction to regulator Ofgem and yet none was given, not even a nod towards ending this obscenity.

For those struggling to meet the spiralling costs of unregulated fuels such as heating oil and biomass, there remains uncertainty. Genuflection was made to it in Truss’s speech with reference to help being provided for heating oil costs.

But it’s also suggested it might be discretionary and the sum to be provided was unspecified. Given the fuel poverty that already exists in Highland and rural Scotland, where these fuels are most prevalent, the lack of adequate help is going to see many struggle in the areas where the climate’s coldest and energy most required. That’s just perverse but it’s becoming a pattern for Truss.

What was needed was a price freeze, paid for out of the gargantuan profits being made by the oil and gas producers and which are now only going to increase exponentially.

The removal of VAT, at least for a while, from energy would also have been appropriate. The energy suppliers who are in trouble, as opposed to the producers who are becoming ever richer, could have been nationalised in whole or just in part, all laying a path to address future supply in a market and system that has shown itself to be dysfunctional.

Fracking and nuclear aren’t required or wanted in Scotland. When the equivalent of 97 per cent of Scottish domestic electricity use is produced by renewables and it’s contracted at an agreed rate of £48 per MWh of electricity, why are Scottish consumers charged on a system linked to European gas prices where the rates are often currently around £446 per MWh?

Not only are we potentially able to supply ourselves almost entirely from locally sourced renewables, we’ve plenty to export where a modest profit should be available and still be a boon for consumers south of the Border or elsewhere. These plans are cruel for energy-poor Scots and wrong for energy-rich Scotland.