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Kenny MacAskill: Energy debt is staggering – action needs taken

THE level of energy debt now outstanding in Scotland and the UK is quite extraordinary.

The collective sum amounts to a staggering £3.1 billion. Yes, billion, not million. With folk wondering how they can pay their bills, there are many who can’t even meet what’s already owed.

The situation is 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 based its figures on the Scottish Governments house condition survey of 2022. Fuel poverty afflicted 31% of Scottish households. That was two years ago, so it could be even more severe now.

The perversity of an energy-rich land having folk in fuel poverty is most stark in the areas where much of the power is produced.

Wind on and offshore proliferates there and elsewhere in Scotland. Yet while 124bn kilowatt hours of that energy source are to be sent south every year, enough to power every Scottish household 12-and-a-half times over, our people struggle to meet current and past bills.

That £3.1bn debt figure is a huge number. According to Citizens Advice Scotland, the average fuel debt for someone presenting to them seeking help is £2300. That’s just the average, so for some it’ll be more. Additionally, that’s only for fuel. These people may have other debts, too, as they juggle their finances to try to survive.

Meanwhile, Scope, the disability charity, points out that disabled households require an additional £975 per month simply to have the standard of living of a non-disabled household. Referrals to its Disability Energy Support Service last year numbered more 7000, with 364 in debt and the average debt amounting to more than £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 is 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. It’s not just turning on the thermostat or even putting on the cooker.

In our modern society it’s also about using the washing machine to make sure the bairns have clean clothes; powering up the school laptop so the kids can achieve their full educational potential; 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.

Those recuperating from illness or requiring lifesaving equipment also need to use power. Ill-health not only means people cannot leave their homes, it can also make 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.

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 more £2bn in what’s described as arrears. People have no repayment plan. They are 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. They are 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. It’s a just-can’t-pay situation faced by those who just don’t have the wherewithal.

Another perversity of the privatised energy market is that those with least pay most. As National Energy Action has pointed out, standing charges have almost doubled over the past five years and households are now paying more than £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.

While 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 is provided.

You can also be denied the ability to move to an energy provider offering a lower tariff. 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 re-instated forthwith. Thirdly, the Warm Home Discount Scheme needs vastly improved and targeted.
Finally, there needs to be a debt write-off scheme. We’ve bailed out banks, written off PPE wastage or fraud, so why not people?

Let’s have war on poverty rather than spend money on weapons of war. All that and much more is needed to end the perversity of an energy-rich Scotland with fuel-poor Scots.

 

[This article was first published in The National on 30/04/2024]

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