AS the politicians bicker and point fingers, there is a pretty obvious solution to the energy crisis about to hit Scotland especially hard this winter because of our climate. It’s fair, understandable, tried and tested. It is one of Rishi Sunak’s better policies: furlough.
Just as the government met part of the cost of people’s lost salaries during Covid so it should meet a percentage of the additional cost of this winter’s fuel bills. Families would be paid 70% or 80% of the additional cost over and above last year’s bills.
It shouldn’t be too hard to work out. The Liberal Democrat leader Ed Davey is calling for something similar, but don’t let that put you off.
Price support would be progressive since bigger houses have bigger bills. It is simple to operate though the billing system and difficult to abuse. A subsidy is better than one-off grants not just because it is related to need. It will automatically adjust for colder regions like ours. It is certainly better than rationing.
There is also a built-in incentive to use less energy. People who really go to town donning their thermals and puffas might not have to pay much more than last year.
We shouldn’t let this crisis go to waste. As a society we need to learn to do with less energy and this is a practical way to encourage DIY insulation and energy conservation.
Public buildings and swimming pools should set an example by cutting their consumption as they are already doing in Germany.
Why should the government pay our bills? Aren’t these socialist “handouts” as Liz Truss calls them? No they are not. Just like the pandemic the energy crisis is a disaster no one could have seen coming. It is no one’s fault that Vladimir Putin used oil and gas as a weapon of war.
The doubling of household energy bills is essentially a consequence of British foreign policy which has been to join with NATO in challenging Putin’s imperialism. This is a collective action by the state; it needs a collective solution.
The government underwrote people's lost incomes last year with furlough, paying 80% of lost earnings. So why not help people pay for their lost heat and light by a similar mechanism? We can’t simply let people freeze.
Twitter is calling for a non-payment campaign. That will wreck poor people's credit rating and land them in court. Anyway, those on pre-payment meters can’t not pay. Families on very low or no income will have to be helped through the benefits system. They of course are the most vulnerable and require the most assistance.
But it would be wrong to exclude people who are on modest incomes and do not qualify for benefits.
Even middle class families could be plunged into penury by heating bills of £4,200 on top of rampant inflation – just as they’d have been impoverished by having to self-isolate during lockdown. That is not progressive.
How much would this energy furlough cost? £40 billion, perhaps more. It is actually irrelevant since the bill for the energy shock simply has to be met – like the cost of armaments in a war. The energy crisis is not permanent and the scheme would be ended when prices return to normal.
British soldiers are not actually fighting the Russians in Ukraine but it is a war nevertheless. Wars are expensive and should be paid for by the fairest and most efficient way of raising revenue which is through the taxation system. An energy surtax could be added to income tax.
The wealthy would of course pay more and in most cases should be quite content to do so. Tories of all people should understand the need for sacrifice given their nostalgia for World War Two. There were surtaxes then too.
The energy companies will also have to contribute. They are paying a modest windfall tax already, but that is relatively easy to avoid. Admittedly, it is difficult to impose windfall taxes on international companies. BP operates in 70 different countries paying taxes in each jurisdiction.
However, the energy giants are paying their executives multi-million salaries here and now. Not only is BP turning into a “cash machine” according to its boss, Bernard Looney – an example of nominative determinism if ever there was one – they are also buying back their own shares in a backhanded way of enriching their shareholders. If they can do that, then they can “buy back” their consumers.
The idea of meeting the cost of living crisis through cutting taxes is very definitely not a solution. Liz Truss appears destined to win the Tory leadership by telling the party what they want to hear: that there is a growth unicorn who can pay the social cost of unprecedented events.
Imagine if Rishi Sunak had said we should deal with the pandemic by cutting taxes. “Let’s get the state off our back, ignore coronavirus and let the magic of deregulation boost the Covid economy”.
He would rightly have been condemned. Yet Liz Truss is doing something similar in saying that she wants tax cuts instead of handouts to meet the cost of living crisis. Boris Johnson for all his faults would never have said anything quite so crass.
Her spokespeople have rolled back somewhat, insisting that Truss hasn’t ruled out helping people with their bills. But that merely raises the question of how she would pay for her own “handouts”.
The Tories are supposed no longer to be the “nasty party” and to have come to accept if not love the NHS. But members clearly yearn for some Brexit fairyland where cutting the state and handing wealth to the already well off is the answer to national emergencies. Reversing the National insurance increase would be no help to people on low incomes.
The words “crisis” and “emergency” are over used. The Scottish Government announces one practically by the week. But this time it’s as Nicola Sturgeon says it is: unprecedented in our lifetime. The government needs to get its head out of its derrière and sort it out.
Why are you making commenting on The Herald only available to subscribers?
It should have been a safe space for informed debate, somewhere for readers to discuss issues around the biggest stories of the day, but all too often the below the line comments on most websites have become bogged down by off-topic discussions and abuse.
heraldscotland.com is tackling this problem by allowing only subscribers to comment.
We are doing this to improve the experience for our loyal readers and we believe it will reduce the ability of trolls and troublemakers, who occasionally find their way onto our site, to abuse our journalists and readers. We also hope it will help the comments section fulfil its promise as a part of Scotland's conversation with itself.
We are lucky at The Herald. We are read by an informed, educated readership who can add their knowledge and insights to our stories.
That is invaluable.
We are making the subscriber-only change to support our valued readers, who tell us they don't want the site cluttered up with irrelevant comments, untruths and abuse.
In the past, the journalist’s job was to collect and distribute information to the audience. Technology means that readers can shape a discussion. We look forward to hearing from you on heraldscotland.com
Comments & Moderation
Readers’ comments: You are personally liable for the content of any comments you upload to this website, so please act responsibly. We do not pre-moderate or monitor readers’ comments appearing on our websites, but we do post-moderate in response to complaints we receive or otherwise when a potential problem comes to our attention. You can make a complaint by using the ‘report this post’ link . We may then apply our discretion under the user terms to amend or delete comments.
Post moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours.
Read the rules hereLast Updated:
Report this comment Cancel