The National Audit Office today published a report predicting the cost of upgrading Britain’s energy industry infrastructure - £176bn – would be passed on to hard pressed households and mean customers facing inflation busting rises in the cost of gas and electricity for the next 17 years.
The news will send another unwelcome shiver down the collective spine of every household in Britain as the soaring price of gas and electricity is already people’s number one concern right now.
The NAO report shows that 8% of the average household’s spending goes on energy and water bills.Spending 10% of your income on energy is the official definition of being in ‘fuel poverty’. Therefore this report shows just how close the average UK household now is to being 'fuel poor'. And of course since all averages hide a multitude of variations those households on the lowest incomes already pay 15% of their money on energy and water as it is. Many already find themselves in ‘extreme fuel poverty’ as it is - paying 20% of total income on energy.
The prospect of another 17 years of this will understandably terrify them all as hypothermia already takes its toll. Professor John Hills of the London School of Economics found in his Report commissioned by the UK Government that 27,000 people died prematurely from ‘cold related diseases' last winter brought on by prolonged exposure to ‘fuel poverty’. That's more than were killed on Britain's road and more than the entire population of Wishaw dying needlessly each winter!And this in an energy rich country like ours!
Since Thatcher privatised the energy industry in the 1980’s the burden of funding infrastructure improvements has been shifted from the Government to the customer. In keeping with her neo-liberal philosophy the financial burden has been shifted from the rich to the poor, from the taxpayer to the customer. And this has meant a move away from progressive taxation to regressive indirect taxation where energy bills heavily disadvantage the working class and the poor.
The solution is to return the energy industry to public hands, just as the Scottish Socialist Party advocates, and fund the cost of infrastructure programmes from general taxation where the rich are asked to pay more and we move away from regressive customer charges, which bear no relation to a household’s ability to pay them.
Gas and electricity bills have doubled over the past decade, yet average incomes have not increased at all. And the poorest households have actually seen an 11% fall in their real incomes.
The blame for soaring energy bills has been variously ascribed to infrastructure costs, the increased wholesale price of gas and the cost of ‘green’ subsidies. Either way, most households now face a very difficult time indeed in trying to pay for gas and electricity they can ill afford. That prospect has just been drawn out by another 17 years by this reports findings!
It is surely only a matter of time before we see the same mass unrest over energy bills here that we have seen in Bolivia, Bulgaria, Egypt and elsewhere during this past year. And perhaps we should also take a leaf out of the German protests where mass unrest has been directed towards referenda on returning the industry to public ownership and a reform agenda which demands no one suffers the indignity of fuel poverty whilst rich multi-national energy companies make obscene profits.