Energy: the required level of poverty

By Richard North - August 28, 2022

In one Telegraph article, at least, some of the enormity of the energy price hike is coming through, with the headline: “Energy bills to wipe out almost three quarters of state pension”.

Pensioners, writes Jessica Beard, will be among the hardest hit during the cost-of-living crisis, as they will be left with just £3,000 to live on per year from the state pension once bills have been paid. This is based on the forecasts for future energy bill increases, bringing a typical bill in April to £6,616, accounting for 70 percent of the average state pension even after the triple lock comes into force.

When “fuel poverty” is defined as a state where ten percent of income is expended on energy bills, this brings new meaning to the term, where people reliant on state pension income will no longer be able to afford the basic essentials of life.

Those who have no resources other than their pension income will, no doubt, qualify for additional support, although the nature and extent of that support has yet to be defined. Furthermore, experience suggests that it will never entirely compensate for the extra costs, the net effect being to accelerate the slide into genteel poverty and a state of dependency.

As alluded to in yesterday’s piece, however, there will be a fairly substantial tranche of pensioners who have built-up modest savings and other assets such as their dwelling place, which can provide a buffer when expenditure exceeds income.

But the particular evil of support schemes ostensibly aimed at helping such people with their inflated fuel bills is that potential beneficiaries are excluded by the asset qualification. Only those with minimal savings or assets qualify for help. The others are required to drain their resources until they have reached the required level of poverty before any assistance is given.

In the eyes of the state and other gatekeepers, anyone who has not reached the qualifying level of poverty is expected to pay their bills, even (or especially) if it means depleting savings. While normal human beings might consider a “nest egg” should be used to cover against emergencies, like the boiler packing up, or some such, paying inflated utility bills is supposed to take precedence.

The Telegraph reports that the forty percent of those over the age of 66 rely on their state pensions as their main source of income, and it is these people who will be amongst those hardest hit by the energy price hike. But those who had the foresight or good fortune to set up a financial buffer will find it hardest to secure assistance.

Presumably, therefore – as they will be judged as capable of paying – they will find themselves at the leading edge of the “won’t pay” movement, if they have any ambitions of retaining any semblance of financial independence.

While any resistance might be couched in those terms, though, a better approach might be to move from the personal to the political and refuse to pay on political grounds. As I’ve pointed out in a previous piece, while Johnson and his fellow travellers might prefer to see Putin as the cause of the price hikes, the damage stems from multiple failures by successive governments to formulate a coherent energy policy.

Looking back through the archives, I came across this Booker column from March 2015, at the height of the general election campaign. This had Booker observing that no one was talking about “our utterly mad energy policy”, noting that all the major parties were signed up to the policy set in train by Ed Miliband’s Climate Change Act. And they didn’t know what they were doing, any more than they do now.

At the time, Booker was commenting on the premature and utterly rash closure of the Longannet power station shutting down its 2,400-megawatt capacity capable of supplying two thirds of all Scotland’s average electricity needs. With no apparent replacement, it made Scotland more reliant on importing energy from England, and even more reliant on gas-powered generation.

This just another small example of why we are experiencing a government induced crisis, and it is for government to solve it, with the least inconvenience and harm to bill payers. Thus, “can’t pay” and “won’t pay”, are not the issues. Essentially, “shouldn’t pay” ought to be the dominant theme. It is no part of the duty of any citizen to impoverish themselves simply in order to bail out incompetent governments.

No more so is this so evidently the case when we have a valedictory piece in the Mail on Sunday, authored by the Oaf, where he still attributes the energy price crisis to Putin’s “barbaric invasion” rather than being a long-term effect of policy failure, of which he was part.

And, having failed to understand the nature of the havoc he and previous prime ministers have caused, his boosterish assertions that: “We have made the long-term decisions, including on domestic energy supply, to ensure our bounceback can and should be remarkable and that our future will be golden”, carry no weight at all.

This is the idiot who believes that, “with every new wind farm we build offshore, with every new nuclear project we approve, we strengthen our strategic position”. Never mind that the intermittency of the renewables and the reliance on gas to balance demand is largely the cause of our current problems.

With no apparent understanding that there is a huge gap between approving a new nuclear plant and drawing useful power from it, he boasts that we are going to build a new reactor every year – even though most will be SMRs, which will barely touch our baseload requirement.

Then, with the technical acumen of a demented slug, he parades the idea that we “will have a colossal 50 gigawatts of offshore wind by 2030 – almost half our total electricity consumption”. This, he actually believes will make us less vulnerable to the vagaries of the global gas price and less vulnerable to Putin’s pressure. How he thinks the operator will balance the grid, he does not of course explain.

Yet, across the pond, even the Americans are beginning to wake up to the train crash which is the UK energy policy. No less than the Wall Street Journal is running a piece headed: “Net-Zero Emissions Policy Bankrupts Britain” and, it warns, “it could do the same to the US, which is following a similar path”.

The UK, it says, is belatedly building new nuclear plants, but those will take years to come online. Unreliable wind and solar raise the cost the electric grid must pay to balance supply and demand when the winds are still and the sun is behind clouds, and more than 80 percent of English households rely on gas rather than electricity to heat their homes.

All of this, the paper says, drives up the cost of supplying power, and then the government adds about £153 in green levies and a 5 percent consumption tax directly on household bills. To adapt Hemingway, it concludes, “net zero drives you bankrupt gradually, then suddenly. Britain’s sudden energy agony is a five-alarm warning if the climate progressives continue to have their way”.

But there is going to be nothing which militates more strongly against the UK working together to deal with the energy crisis than the “us and them” perception that dominates the discourse. We have multi-millionaire chancellor Nadhim Zahawi telling the plebs that they must conserve energy – the very same who billed taxpayers £5,000 for heating his stables. And we have the bosses of Britain’s biggest energy and utility companies pocketing an eye-watering £30 million in pay between them last year as hard-pressed families nationwide face an unprecedented cost-of-living crisis.

According to the Mail on Sunday, the bosses of Shell, BP and National Grid are among the top earners of seven energy and utility firms in the FTSE 100. The five energy and power companies make up £23million of the total, and two water companies make up £7million.

When push comes to shove, no one is going to take very seriously the demands to pay their eye-watering energy bills when the net effect is to make a few obscenely rich people even richer.