The UK Chancellor Jeremy Hunt has decided to extend the current cap on energy prices for another three months - but that is not enough to help Scottish families who have to pay over the odds to heat their homes.
The headline figure says that this will keep average bills at £2,500 a year instead of pushing them up to £3,000. But people living in Scotland, especially in rural areas, pay more while average incomes are lower - leading to soaring levels of fuel poverty. Energy Action Scotland calculates that the Scottish average bill is £1,000 more than England.
An analysis from February 2022, before the bulk of the fuel bill rises, showed that the levels of fuel poverty range were already running at 57% in Comhairle nan Eilean Siar, 47% in Highland and 46% in Argyll and Bute.
The irony is that these are the very areas which produce energy, from oil and gas to wind and tidal power. When Scotland becomes independent, its elected government will be empowered to regulate and tax energy producers in a way that puts Scotland’s people at the heart of energy policy.
Too little too late
The gesture by the UK Government to freeze prices comes as falling energy prices on the global market has meant the cap has cost them less than predicted. The wholesale price of gas fell by 75% since its peak in Summer 2022. Given this drop in prices, the UK Government should have the capacity to reduce bills instead of freezing them, perhaps by extending the £400 Energy Bill Support Scheme payments which come to an end this month.
The freeze is obviously better than an egregious rise. But the people of Scotland are frustrated about how Westminster has seen fit to manage Scotland’s energy resources and want to take the levers of power into their own hands.
Scotland produces around as much energy as it uses from renewable sources that cost 9 times less than gas- we should pay less for energy, not more.
Scottish people are angry about energy rip off
The people of Scotland are increasingly angry that they have to dance to Westminster’s tune on energy. They live in an energy rich country but don’t see the benefits. They have seen how the UK Government’s pursuit of ideological privatisation has impacted the lives of ordinary people.
British Gas was once in public ownership. Under the Centrica name, in February it announced that last year, profits had tripled to a record £3.3 billion as energy prices and production soared, paving the way for a £300 million share buy-back - at the same time as it was sending debt collectors to forcibly install prepayment meters.
Why Scots are unfairly burdened when it comes to energy costs
- The much-quoted “average” of £2,500 a year hides the fact that, in much of Scotland, bills are higher.
- Many people living in Scotland outside of the Central Belt don’t have access to gas, which is still priced lower than electricity - despite the fact it is much cheaper to produce.
- Scotland pays higher standing charges than most of England.
- Temperatures tend to be lower in Scotland, so people need to use more energy.
- The UK is the only European country (except Portugal which was forced to do so after a financial crisis) to have privatised the national grid. This has led to additional problems with lack of investment and planning for the transition to renewables.
- The privatised National Grid operates across the UK as a whole - there is no opportunity for Scotland to make greater use of its own renewable energy or charge to export it to England.
- The National Grid also does not allow Scotland to set its own demand signals - for example making energy cheaper at weekends as some countries do.
- The amount that is charged in the fixed portion of bills includes clawing back money lost when 30 energy supply firms went bust due to regulatory failure that can be laid at the door of the UK Government.
- Household energy bills also include a levy for expensive nuclear power that Scotland doesn’t want or need.
- Scottish households pay the highest energy bills in Europe - where many governments have nationally-owned power companies.
Cheapskate gesture won’t buy off demands for independence
The UK Government’s cheapskate gesture is too little too late for Scotland. Falling gas and electricity prices mean the government has already made a saving – the scheme was forecast to cost £37bn in January. It does nothing to recognise that Scotland is suffering from higher levels of fuel poverty while its natural resources are plundered for profit.
Scotland is at the mercy of the UK government when it comes to regulating the energy market. It has become obvious that the pursuit of ideological privatisation has led to a situation where ordinary people pay much higher bills and that money ends up in the profits of energy companies, who have used it to fund share buybacks and dividends.
While the overall UK energy policy comes under question, an independent Scotland could consider whether to build back some public ownership and how to regulate the private sector in a way that puts people at the heart of energy policy. It could certainly charge less if it controlled its own renewable energy supply.
Scotland is sick of seeing successive Westminster governments exploit Scotland’s energy resources for profit without protecting the interests of Scotland’s people. It is time for independence.