ScottishPower boss Keith Anderson: hero or ‘profiteer’?: Ian McConnell

He even came up with a detailed solution for curbing the rises in electricity and gas bills. This was not quite the exact structure implemented by the Tories but their intervention was broadly along the lines suggested by Mr Anderson – in terms of putting a lid on how high energy prices could go by providing massive state support in order to give fearful households some peace of mind.

Mr Anderson, you would imagine, would be keen to ensure as head of a major electricity and gas supplier that his customers were not going to be plunged into poverty by paying for his company’s product. ScottishPower’s prices were obviously in line with those of other providers, who therefore faced the same considerations.

However, whether partly self-interested or not, Mr Anderson in his campaigning gave the impression of a man who genuinely cared about the grim societal effects of soaring energy bills, at a time when forward wholesale gas prices were pointing to an atrocious situation.

And he deserves huge credit for raising awareness over a period of months, while the Tories seemed to be burying their heads in the sand.

His warnings were stark, but they were not overdone.

Mr Anderson said that people were feeling “genuine fear” as energy bills rose “off the charts and out of reach”.

And he declared in late August: “The size and scale of this issue is truly catastrophic for UK households and that’s why only a big solution can tackle it once and for all to shelter people from the worst this winter.”

Mr Anderson was not exaggerating – he was simply telling it as it was. And it needed to be framed in frank and frightening terms, as the Tories appeared to continue to dither all the way through from the early part of the year to their long-overdue intervention last month.

On reflection, for long spells during this period, the Tories probably gave more of an impression of not caring.

Given Mr Anderson’s valiant efforts on this front, what should we make of trade union Unite’s choice of ScottishPower’s head office in St Vincent Street for a “major protest” last Friday “against unfettered profiteering and a broken economy”?

The “broken economy” is hardly the fault of ScottishPower. It is, however, in large part down to the Tories, who have turned in a diabolical performance on the overall economy and by putting in place policies which raise inequality.

The “unfettered profiteering” also seemed somewhat unfair, especially given that ScottishPower’s first-half earnings from the supply of electricity and gas were down sharply.

First-half earnings before interest, tax, depreciation and amortisation (EBITDA) in ScottishPower’s retail business during the first half were, at £54.3m, down by £81m or 60 per cent on the same period of last year.

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ScottishPower, which is owned by Iberdrola of Spain, noted in July that “the inability to pass on the high energy costs due to the price cap mechanism continues to lead to a strain on earnings”.

That said, its overall first-half EBITDA was up by 2.6% on the same period of the prior year at £924.6m.

First-half EBITDA in the renewables division rose by 27% to £386.7m, aided by increased output from wind farms.

This renewables business is, however, the catalyst for what ScottishPower hailed in July as the company’s “biggest-ever recruitment drive” as it set out its intention of creating “at least” 1,000 jobs over the next 12 months.

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Unite also declared “ScottishPower has handed over nearly £7bn in dividends to its foreign owners since being taken over”.

This is indeed a big number. However, Unite itself noted the dividends relate to a 14-year period. And over the vast bulk of this period, the supply of electricity and gas has been relatively uncontentious. This would seem to be a crucial point.

Furthermore, Iberdrola has, relative to some other overseas players which have taken over Scottish businesses, appeared to have been a very good employer, and it continues to make a major contribution to the nation’s economy. Pay and conditions remain good, investment has stayed high, and Iberdrola has in many ways exhibited model behaviours.

Of course, there is room for debate over overall profit levels of a company such as ScottishPower.

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However, far more of a pressing issue is how the UK as a whole managed to find itself so lacking security of energy supply. That is not a ScottishPower issue. Rather, the Tories are to a huge degree answerable for what has happened, not just with the woeful failure to build security of supply in recent years but also for the Thatcher privatisation spree which has brought us to the sorry state of affairs we see today.

However, while it could certainly be argued that criticism of ScottishPower’s dividends to Iberdrola and perhaps also of its overall profit level was overly harsh and perhaps wide of the mark, it was disappointing to see the Glasgow utility hit the headlines over its treatment of some customers. Energy regulator Ofgem issued a “provisional order” last month relating to ScottishPower’s treatment of customers who were finding it difficult to pay bills.

Noting “behaviours of concern giving rise to the provisional order”, Ofgem flagged “SP’s apparent failure to consider its customer’s ability to pay on a case-by-case basis and set debt repayment rates based on those individual circumstances” and declared “SP are setting £5 [per week, per fuel] minimum default repayment amounts without assessing customer’s ability to pay”.

The regulator added: “Staff at SP appear to be failing to follow their own internal policy and procedures on setting lower repayment amounts where the customer is in payment difficulty; in cases where customers are expressing concerns about the affordability of the level of repayments SP are not exploring all available options to support customers (including for those customers who are vulnerable).”

A spokesman for ScottishPower said last month: “We’re disappointed that all of the effort our staff make to help our customers manage affordability challenges has resulted in this conclusion from Ofgem. We will now work with Ofgem to implement their recommendations.”

In these most difficult of times, the likes of energy suppliers and banks have a duty to help customers in need, and this should be a priority for them.

The response from ScottishPower to Ofgem perhaps signals a difference of opinion in terms of the utility’s performance on this front.

Whatever the case, ensuring help for vulnerable customers must be a priority for Mr Anderson –who has through his comments on the price cap demonstrated an acute awareness of the impact of rising bills on households – and his peers in the sector.

The price cap, in spite of the huge government intervention, is at the equivalent of £2,500 annually for a typical dual fuel household, nearly double the £1,277 per annum prevailing from October 1 last year. So it will be a most difficult winter, in spite of a £400 per household discount funded by the UK taxpayer and additional help for low-income households.

Given this context, and difficulties arising from surging interest rates, Mr Anderson and other leaders in the sector must stand ready to do all they can to help the most vulnerable through this grim winter.

In the meantime, we should continue to recognise the enormous part played by Mr Anderson in helping ensure the Tories eventually woke up to the energy price crisis. And we should also not lose sight of the importance of ScottishPower as an employer and a crucial contributor to the nation’s economy.