Enter your email address to stay in touch

Workers to pay ‘for massive energy company profits’

Unite: Liz Truss’ energy bill plan ‘boosts profiteering’
UniteLive, Thursday, September 8th, 2022


Unite has slammed prime minister Liz Truss’ plan on energy bills, saying the proposal will make working people pay for energy company profits – and so for a crisis not of their own making.

Truss on Thursday (September 8) announced a much-anticipated plan to tackle skyrocketing energy bills by freezing bills at £2,500 a year for the typical household for the next two years from October 1. The freeze will supersede the energy price cap, which was due to raise average energy bills to £3,549 a year.

Truss faced criticism for failing to set out the full costs of the proposal, which the government said would be forthcoming, with an estimated cost of between £130bn and £150bn. The government confirmed the plan would be paid for by increased government borrowing, instead of through a windfall tax on energy company profits.

This means that taxpayers – working people – will ultimately pay for the money borrowed by the government. Taxpayers’ repayments will be over and above the money raised to fund the plan because of interest payments from borrowing.

Commenting on the plan, Unite general secretary Sharon Graham said, “It is quite frankly remarkable that the prime minster is asking workers to pay for massive energy company profits. The economy is broken and workers will see through this plan to boost profiteering yet again.”

The Resolution Foundation think tank estimated that the plan to freeze energy bills would exceed the £137bn bailout of banks during the financial crisis in 2008. Meanwhile, energy giants, who are profiting from the war in Ukraine, will walk away with an estimated £170bn in excess profits over the next two years.

The Labour Party likewise criticised the government for failing to tax highly profitable energy companies, noting, “These vast profits are not the reward of careful planning. They are the unexpected windfall from Putin’s barbarity in Ukraine. There is no reason why taxing them would affect investment in the future.”

Truss was likewise criticised for the fact that even if bills are frozen, they are still too high to begin with – £2,500 a year for a typical household is still far higher than the £1,277 that typical household bills were capped at last winter, when millions were already struggling.

What’s more, as with the energy price cap, the £2,500 a year figure is not the level at which all bills will be frozen – this is only an illustrative example of what a typical household uses in a year. There is no limit to how much people will pay for their energy bills – households that use more than the estimated average will pay more.  

The End Poverty Fuel Coalition estimates that even with bills being frozen, an additional 12m people will fall into fuel poverty from October 1.

Other plans detailed in Truss’ announcement include ‘an equivalent price guarantee’ for businesses, which aren’t subject to the energy price cap, for a period of six months. After six months, ‘vulnerable’ businesses – such as those in the hospitality industry — will receive additional support.

 Households that don’t use mains gas and electricity – such as those who use heating oil – will receive equivalent help as those whose bills are frozen.

A previously announced £400 fuel bill discount later in the year will go ahead, as will additional support for pensioners and those on Universal Credit.

Truss said that as part of her energy plan, the government will be “accelerating all sources of domestic energy, including North Sea oil and gas production”. The prime minister also announced a controversial reversal on the ban on fracking.

But critics highlighted that no amount of domestic energy production would bring down energy prices now.

Labour leader Kier Starmer slammed now-chancellor Kwasi Kwarteng for a U-turn on fracking as he quoted Kwarteng’s own assessment just six months ago, when he said “additional UK production won’t materially affect the wholesale market price”.

“This includes fracking – UK producers won’t sell shale gas to UK consumers below the market price. They’re not charities,” Kwarteng previously said.

Commenting, Unite general secretary Sharon Graham said, “I don’t think the irony escapes many: The reason we are held to ransom now by an over reliance on non-domestic energy is that a Conservative government privatised our energy.”

By Hajera Blagg

Avatar

Related Articles