UK union leader says 'eyewatering' £7bn ScottishPower dividends helps prove need for energy renationalisation

It comes as the chancellor Kwasi Kwarteng unveiled the government's economic plan involving cutting taxes for corporations and the rich, while families struggle to pay the costs of food, fuel and rent.

And Ms Graham says the Labour party "cannot simply stand still and needs to be bold in contrast to Kwarteng's bonanza for the super rich".

A Unite investigation has revealed that 13% of Glaswegians - more than 82,000 people - simply can’t pay their household bills this year. And more than 152,000 Glaswegians - 24% - are living in food poverty.

The government policies announced in the mini-budget – reversing planned rises in corporation tax and national insurance, cutting stamp duty, scrapping the top income tax rate – will put millions of pounds into the pockets of the wealthiest people, not to mention bankers, who will have the cap on their bonuses removed.

Unite Scotland (Image: Unite Scotland)

Ms Truss is a deep believer in trickle-down economics – the theory that if you cut taxes for corporations and the rich, it will spur economic growth, which will eventually trickle down into higher wages and rising living standards for the rest.

Unite investigations have established that Britain’s energy giants - in supply and distribution - have made £15.8 billion in profits.

Out of that total the UK’s Big 4 energy suppliers - Centrica, E.on, EDF and Scottish Power - made £9.5 billion profits. This is up 84% on profits pre-pandemic.

Ms Graham told the Herald: "The figures around Scottish Power are eyewatering. When you talk about the £7bn that has gone out the Scottish economy in dividends to shareholders in Spain, that is the trickle down economics Liz Truss is talking about, but it did not trickle down to Scotland."

She added: “These figures exposing rampant profiteering, on their own, practically establish the need for the re-nationalisation of energy. A windfall tax might do something for a moment in time. But in the long term, it’s clear that piecemeal action will not solve the scale of these problems. Sooner or later Labour will have to back taking the energy giants back into public ownership. Better sooner, because privatisation has ended in tears for almost all of us.”

Ms Graham highlighted the ScottishPower dividends and pay rises at a Unite Scotland policy conference in Glasgow, and said it showed the "trickle down economics" of the Truss goverment “are doomed to fail”.

It came after the Herald on Sunday revealed that while ScottishPower has been pushing for a taxpayer-backed £100bn fund to help energy firms freeze energy bills, and has eventually been adopted by Liz Truss, it has handed over nearly £7bn in dividends to its foreign owners since being taken over.

The payout bonanza to its Spanish owners, Iberdrola over its 14 years of control of the Glasgow-based company has been revealed as its high profile chief executive Keith Anderson has seen his pay soar by £200,000 to £1.35m in a year. Six years ago, Scottish Power Limited's highest paid director was getting almost half that at £687,000.

ScottishPower's dividend payments to Iberdrola have amounted to nearly one billion pounds in the past two years alone as customers face energy bills doubling since last winter, despite government intervention.

The amounts paid out is £2bn more than Mr Anderson said Iberdola was putting into a major global investment plan in the UK over five years when he was appointed chief executive in February, 2018.

Ms Graham said: “In contrast to these desperate statistics stands the profiteering of Scottish Power whose headquarters is a matter of miles away from this conference on the other side of the River Clyde.

“How’s that for trickle down economics? £7 billion handed over from Scottish Power to Iberdrola in Spain. That’s trickle down economics alright. Trickle down from Scotland to Spanish shareholders. Proof that government trickle down policies are rhetoric that is doomed from the start to fail."

She said the "mini-budget is unashamedly a budget for the rich, big business and the City – highest earners’ tax slashed, corporation tax slashed, investment bankers’ bonuses let rip”.

She said to Labour: "Do not stand on the sidelines and play this safe. Hoping that that will be enough, will not work. "

Last week's criticised massive shake-up of the UK's finances saw Mr Kwarteng unveil the biggest tax cutting moves in 50 years worth £45bn.

The basic rate of income tax is cut to 19p and the 45% top rate of tax for higher earners abolished - although this does not apply in Scotland.

The cap on bankers' bonuses is lifted, and a planned rise in corporation tax was scrapped.

Meanwhile, rules around universal credit were tightened, by reducing benefits if people do not fulfil job search commitments.

An increase in National Insurance was reversed, and low-tax investment zones were to be set up across the UK.

Mr Kwarteng defended the measures, saying they are "exactly the right thing" to do.