Thursday
Nov012012
by 
Bishop Hill
Bishop Hill Scottish Power on cost of green policies
Nov 1, 2012 Energy: costs I was pointed to this brochure at last night's [Tuesday's] UKIP meeting (click for full size). It does seem to show that Ed Davey is trying very hard to make those in fuel poverty even poorer and even colder.
Reader Comments (61)
BitBucket
Why must it be complicated? I've already answered your question - because if it's simple it won't be equitable.
Assuming that the energy suppliers maintain their total revenue then, in order to subsidise low use consumers, other consumers will have to pay more than at present. If you are only interested in 'demand management' fine, stop there. If you are interested in addressing fuel poverty then you need to think about who the winners and losers will be. The low use consumer might use gas for central heating and hot water. The high use consumer might be a pensioner who needs to keep warm and who uses electricity for all purposes.
As ever, the devil is in the detail.
BitBucket
A footnote:
I put 'demand management' in quotes bcause it is Greenspeak. The plain English term is load-shedding.
Mike, of course you are right, but poverty is still poverty. The result of all the things one has to buy consuming more than the money available. That's why I don't like the term fuel poverty even though the increase in energy prices may be the straw that breaks the camel's back. In my ideal world energy would be as cheap as possible, and the idea of making it expensive to limit usage is stupid and could never work. Only the rich have options. The poor must make do. But even the rich in their domestic environment don't need and will not use boundless amounts of energy. They will absorb the price at some comfort level whereas the poor have no option but to sacrifice something. Which means the policy of making energy expensive won't curb usage except by the poor. So the result of government interference is a predictable effect on exactly the wrong target.
Which I suppose puts us in agreement over everything but semantics.
But I think that cigarette paper is important because what the government is doing is distorting the energy market and while, as you say, those of us on a "comfortable" income can absorb that little bit of official shenanigans, the poor (and especially the old, which is the important point as I shall explain) cannot.
Remember that the elderly are likely to be in their homes a lot more than those of working age. They are also more vulnerable. More so than younger people maintaining their health depends on eating properly and heating their environment properly.
While a considerable number of old people are still fit and active and healthy (including me and several others on this site!) a very large number, especially in their 80s, are not.
As chuckles tells us the average energy bill is currently around £1250 a year or about 3.2% of average household income.
For a pensioner couple on state pension only it is 14.7%; for an individual on minimum wage it is almost exactly on the 10% mark (assuming a 35-hour week). There is no reason to assume that the pensioners will be using less energy than the average though government departments repeatedly try to imply that there is a range of things that pensioners will not be spending money on because they are pensioners (in some cases correctly; in some cases not!).
While we agree completely that poverty is poverty, the elderly are in a particular situation because they can, as we see, be driven into poverty by government fiat and they are not in a position to alleviate their condition by their own actions or resources as are those still in the labour market (at least in theory).
I would respectfully submit, m'lud, that if government is not there to protect the old, the weak, and (yes) the poor then what is it for? In a civilised society it should not be necessary to make choices between essentials and food, energy and a roof over one's head must surely be considered the three basic essentials that one has the right to able to provide for oneself without government loading the dice.
Mike Jackson, once again you have hit the nail on the head. The percentage of incomes spent on energy bills you have presented are very pertinent and tell an important side to this story.
I live in a part of Canada where winter time lows reach minus thirty degrees celcius regularly (without wind chill). The danger of suffering or dying from the cold is present every winter and could potentially affect anyone from any part of society. Even the wealthiest of people have close encounters with the cold at some time or another while outdoors. This leads to a very different attitude towards energy than I have encountered in Europe. Canadians are much more aware of the importance of energy and it's affordability.
I have lived in student houses in the west of Ireland where frost on the inside of the window pane was a normal occurance and jackets in the house a neccesity. Every time I return to Ireland, or travel to England, I am shocked at how cool peoples houses are. The reason for not turning up the heat is always the same; cost. Even with extreme cold outside, Canadian houses are generally kept warmer than those I have visited in Ireland or England and I think this is not right. At the moment I am sitting in a hotel room in the high arctic, it has dropped as low as minus thirty here over the last few days, yet my room is warmer than any I stayed in on my last trip to England.
As a side note, I am sure you will all be happy to hear that there are LOTS of polar bears in this part of the arctic at the moment!
Dear Bishop
I wonder if your people would mind giving some advice. Here at No.11, we had a bit of a clear up and, wouldn't you know, we found a couple of billion pounds down the back of the sofa! Well, you can imagine how many of the colleagues would want a bit of that, but I've been so impressed by your discussion of fuel poverty that I've decided to do something about it. But, and here's where you come in, I'm in a bit of a quandary. Nick suggested that I give the money to Ian over at welfare, on condition that he uses it to help the old and vulnerable to heat their homes and improve their lives. There might be some votes in that too, although maybe only for Nick. But a few chums are urging me to reconsider. You see their estates use more electricity than could boil a really big moat dry and their bills are quite humungous! They say that if I give the money to Ed over at energy, he can persuade the energy companies to knock a few percent off the price of electricity. That won't do much for the old and vulnerable of course but it could make quite a difference to the chaps.
So there it is, should I give the money to Ed over at energy, or to Ian over at welfare. Or shall I just stuff it back down the back of the sofa for a rainy day (could come in quite handy for the next election).
Yours ever.
George.
Kilroywashere
Thankyou for that perspective.
My sister-in-law lives in Canada — on the west coast where those extremes you mention are, I believe, less likely — and certainly from speaking to her on her visits to Europe I know she would pretty much endorse what you say.
Even in France where I am now my central heating system has thermostatic valves but no timeswitch and I understand this is quite common. The thinking is, "if it's cold enough to have the CH on, why would you want it off at any time — especially at night, when it's cold?!"
We're still stuck with the idea that we should heat one room at a time - use the cooking heat to warm the kitchen and you don't need a radiator in there - have a gas/electric fire in the lounge and only have it on when you're in there (never mind that you freeze your balls off waiting for the room to warm up) - who needs a radiator in the bedroom you should be warm enough in bed and anyway if you have a radiator in the hall it will "take the chill off" the rest of the house nicely.
Ring a bell at all, people?
The rest of Europe thinks we're mad!
Some good comments here.
Mike's point about elderly people on low incomes is very important - hence my use of the example of my aunt. She is virtually housebound; because of her age her body heating system doesn't work that well; and she has severe arthritis which makes moving around difficult anyway. The bottom line is, she feels the cold much more than a healthy, active young person but is forced to spend most of her time in one chair, covered with jumpers and blankets, because she can't afford adequate heating. She's not going to die of cold, but her quality of life is lousy and her inactivity (due to the need to stay in the warm chair) is not good for her health.
She's a stubborn old girl (Dutch, fancy that!) and refuses to accept financial assistance. There must be tens, perhaps hundreds, of thousands of people like her in The Netherlands alone.
I don't believe that increasing the pension is the answer. The answer is for governments to stop slugging energy with massive taxes and stupid 'renewables' schemes. If energy is cheaper, it flows through the whole economy, and hopefully the oldies can not only be warm enough but also buy marmalade as well.
I return to marmalde. The other day I found in the supermarket a jar of own-brand marmalade at 51p. It is not my preferred Frank Cooper's, but that is around £2. It's good enough. My point is, if such a bargain were suddenly available in the energy market, same heat for a quarter the cost, same carbon content, would the government A) Support it or B) suppress it. ?
An interesting report today saying that moving coal, gas and other baseload to load following in order to accommodate more renewables will jeopardise utility finances and raise electricity prices considerably e.g. by 3% in Germany:
http://www.ft.com/cms/s/0/a62e1b72-2832-11e2-afd2-00144feabdc0.html#axzz2BXA6wv00
Perhaps worth a new thread Bishop?
I have to say, after seeing all the propaganda about energy bills increasing, I was pleasantly surprised by the honesty of Scottish Power. At least they point out that when energy takes its irrelevant diversion via Westminster, it becomes 34% more expensive!
I recently tried to post on a comment board at the Daily Fail about green taxes. I got an email back saying "We have recieved numerous complaints about your comment and will be removing it". Censorship isn't dead then!