Politics: optics matter

By Richard North - August 4, 2022

Details don’t matter. Optics do. Marie Antoinette went down in history as the unfeeling aristocrat who said of the poor, “let them eat cake”. Although she never actually said it, that didn’t stop her losing her head.

Similarly, the oil giants might be the most altruistic, guiltless organisations in the world, dedicated to bringing life-saving energy to mankind, whilst topping up the pension plans of ageing grannies with their profits. But they will forever be branded as capitalistic behemoths ripping off the public in order to pay their greedy CEOs mega-millions in salaries and bonuses. It’s how you tell ’em.

Currently, BP is in the frame but soon enough the other energy giants will be lumped in with them. They will have to be, because people need objects which they can blame for their misfortune. Soon enough, the politicians – bereft of ideas on how to deal with the energy crisis – will join in and start pointing the finger.

Already, the journos and clever commentators are circling the wagons. We’ve seen the Telegraph’s Sherelle Jacobs having a go, with her piece headed: “A catastrophic energy crisis will fuel a revolt against our failed elites”, and now Iain Martin in The Times is dipping his toe in the water.

His piece opines that [the] “Energy crisis could become a poll tax moment”, adding the point that we’ve already made with the observation: “Tory leadership candidates seem blissfully unaware of the unrest that may await them in the autumn as bills soar”.

That latter observation is a point that needs repeating, and Martin lays it on thick, bringing together the elements of what I called yesterday “a policy vacuum of alarming dimensions”, to paint his own pen picture.

He points out that the British government appears to have all but stopped functioning, with Johnson disengaged and a skeleton Whitehall operation of ministers and officials is keeping the show on the road. And, in the hole where national leadership should be, the Tory succession contest becomes ever more unreal.

At the hustings, Martin writes, the candidates have faced a few good questions from Tory members about the effects of rising energy bills, but the response has largely been to list the assistance already announced by the government and to promise a bit more.

Miss Trussed, he adds, has signalled she will scrap the planned windfall tax on energy company profits that was designed by Sushi as chancellor, believing that such taxes always discourage business investment. Her most robust supporters, Martin notes, say she will hold firm and not offer too much fresh assistance.

But there the doubt creeps in. Miss Trussed, should she get the keys to No.10, will not want to be booted out of office to spare the energy industry. Will, Martin asks, “a new administration, assailed daily by the opposition, voters and media on energy companies, really say that many billions of extra profits are fine when grannies and the poor are freezing?”

Then, finally, he gets to the point. “Without a lot more extra help and a windfall hit on the energy giants, there is the potential for a poll tax moment and even social unrest”, he says.

Also debunking the ideas Miss Trussed has for encouraging growth, Martin warns that, from October we will be crossing into a different economic and political landscape. The winner of the leadership contest will find themselves operating in an emergency environment and facing demands to provide thousands more in aid to each household.

Already, there are the stirrings of a non-payment campaign on energy bills and the prospect of fury with energy firms as they announce more soaring profits which Martin thinks will compel the government to borrow billions more to help with bills in a few months’ time.

But that is to reckon without the malign but highly effective techniques retail energy suppliers have developed to dealing with non-payment and the recovery of debt.

Gone are the days when heavy-handed officials turned up at the door, armed with a court order, and cut off the supply. These days, they simply install pre-payment meters which, as the name indicates, require consumers to pay in advance for their energy. The power goes off when the money runs out, whence the consumers are described as having chosen to “self-disconnect”.

That way, the energy companies absolve themselves from any responsibility for denying supplies while, in a twist which typifies the corporate attitude to consumer debt, they do their best to make life as difficult as possible for their hard-up consumers.

This is achieved by creating pre-payment tariffs which are far more expensive than the normal credit deal, while the tariff is also adjusted upwards to recover any outstanding debt. Thus, those who can afford it least, are those who are charged the most for their energy, as well as having to pay in advance.

Already, there is a sizeable minority of people who are only able to afford energy for parts of the day, and many go days without power, until they have enough money to afford to buy a few hours of supply. And with the tariffs increasing to extortionate levels, the hours that can be purchased will reduce and the periods without power will increase.

The particular evil of this system is that each defaulter is dealt with in isolation – singled out for individual attention, with little opportunity for community resistance. It is then for each individual to find the money to feed the meter, making their individual choices between food and heat, and paying off other essential bills.

At some point in this system, one or other of the corporate creditors – for debt mostly comes in legions – will go out of their way, quite deliberately and knowingly, to wreck their victims’ credit scores – that vital figure which will determine whether they can borrow money or buy goods on credit at a reasonable rate. But never fear, television adverts will point to credit card providers who will “help” people with poor scores – for an APR of 99.9 percent.

Those who have never experienced it have next to no understanding of the misery which debt brings, which is only intensified when the bailiffs turn up, adding their fees of £300 or so per visit to the debts they seek to recover, aided by the police who are always willing to enforce the legalised extortion.

And this is going to be the crunch point as lots and lots of nice people who have always paid their way are suddenly going to discover quite how implacably unyielding the system is once their bank accounts are empty and there is not enough money to pay all the bills.

It is how these new recruits to debtor hell respond to their new status which will make the difference. Most people are socially conditioned to feel shame when they cannot pay their way and will seek to hide their poverty. But when debt becomes the norm, and everybody is in the same boat, that dynamic may change.

All those kindly millionaire CEOs and their hangers-on may well find that they need police protection, while debt collectors and bailiffs on the front line will increasingly confront active resistance and communal violence, which could so easily spill over into rioting. At this point, nuance is irrelevant. People on the edge, with nothing to lose, have no time for reasoned discussion.

But it’s not going to stop there. Even now, domestic energy consumers still enjoy – if that’s the right word – a degree of protection. Businesses don’t. And, as The Times points out, business users are facing 500 percent rises in energy bills and risk being tipped over the edge.

It is the smaller businesses which are being hit first and hardest, crippling local employment, with no relief in sight. As businesses fold and the knock-on effects ripple through the economy, this can only intensify the recession which is already exerting its grip.

For the moment, though, the focus is on the developing drought, and the possibility of a hosepipe bans spreading across the UK. But even these are going to sour public opinion, highlighting the water industry “fat cats”, and their failure to get to grips with leakage.

A sense of “us and them” is further intensified by a report in the Telegraph that a £250 million water plant in the Thames Water area, built to protect hundreds of thousands of households from the effects of drought has been switched off.

Senior industry sources suggested the plant has been effectively mothballed because of its high running costs, the water company preferring to protect its bottom line by demanding that “customers” limit their water use.

Yet, as the Telegraph helpfully points out, Thames Water made £488 million in profits last year. It has raised bills more than four per cent this year, with costs for a family home in its area increasing to around £415 a year.

Its CEO, Sarah Bentley, is paid an eye-watering £2 million a year in salary and bonuses, as well as a £3.1 million “golden hello” for her signing on as chief executive of the UK’s largest water provider.

If, as the grip of this recession intensifies, the tumbrels start to roll, do not be surprised if Bentley and her fellow travellers are amongst the first passengers. Optics matter, and the “failed elites” to which Sherelle Jacobs refers seem to have a death wish.