Fuel Poverty – better or worse in an independent Scotland

Fuel poverty – better or worse in an independent Scotland? That was the question posed to a panel I participated in at the Energy Action Scotland annual conference today. I covered some of the issues in the energy chapter of the latest Red Book and I remain pretty sceptical that the independence on offer will make any difference. And by independence I mean the likely Scottish Government offer, not a wish list from others in the Yes camp who have no political road map for implementing their vision.

Fuel poverty is an everyday reality for many people in Scotland with older people, those with disabilities or long term illnesses and those on low incomes, especially at risk. The consequences are misery, discomfort, ill health and debt. Around 900,000 households in Scotland – more than 1 in 3 – are estimated to be in fuel poverty, which means they are unable to afford adequate warmth in the home. The causes are a combination of poor energy efficiency of the dwelling, low disposable household income and the high price of domestic fuel.

Energy efficiency is of course already largely devolved and measures have been introduced by successive administrations since 1999. We can argue about the scale and effectiveness of those measures, but the solutions are already in our own hands.

Low disposable income is largely a reserved matter, as it is closely linked to the welfare system and broader economic policy. The shift from wages into profits since the Thatcher era is a major concern, not just for fuel poverty, but also because of the wider economic impact. The UK economy grew by £60bn over the past four years, yet household disposable income per person dropped by £500. That’s why the cost of living and wages is a rising political issue. In theory independence could make a difference here, as I don’t believe the Scottish Parliament would have countenanced many of the current welfare cuts and the Bedroom Tax in particular.

However, I remain sceptical that the independence on offer indicates a radical shift in policy. Scottish Government support for the Scottish Living Wage is a positive indicator that they get the importance of increasing disposable income, although their reluctance to use procurement to extend the scope is a big negative. The broader case for a rebalancing of the economy doesn’t feature much in SNP thinking and their economic polices remain firmly in the neo-liberal camp. The language on welfare reform is positive, but there is no indication that they are prepared to take any radical action on tax to pay for it. In fact quite the opposite. Their actions in government, such as the regressive Council Tax freeze and post-independence tax announcements indicate a low tax economy. You simply can’t have Scandinavian levels of welfare and public services unless you are prepared to have a difficult conversation on tax with the people of Scotland.

That leaves the issue of energy policy, vital because the price of energy is the biggest driver of fuel poverty. Now, I am a big critic of the UK Government’s energy policy and supportive of many of the Scottish government’s concerns, as in Fergus Ewing’s rant to the Energy Secretary this week, particularly transmission charges and decarbonisation targets. I therefore find the Scottish Government’s position on energy policy post-independence surprising, to put it mildly. Despite their criticisms they want to remain within the UK electricity market.

This effectively means handing over the key levers of energy policy to another country, taking independence lite to new levels. There’s nothing that says the UK has to use renewables to meet emissions targets – or, more importantly, Scottish renewables. There are alternatives, such as rigging the market to favour English nuclear stations – oh yes, they have just done that!

The Scottish Government energy minister Fergus Ewing responds to this by pointing to the EU single market and cooperation models such as the Irish SEM. He also argues that UK ministers would end up accepting a continuation of the current single energy market across the UK after independence, on the grounds that, without Scottish energy feeding into the national grid, the “lights would go out” in England. This is a pretty bold claim with not much evidence to support it, given the Chancellor’s ‘dash for gas’ through fracking and England’s access to the continent’s power supplies through interconnectors.

Developments in interconnector access are another blow to Fergus Ewing’s argument. The Scotland-Norway interconnector is running into difficulty after SSE pulled out and the Norwegian state grid operator appears more interested in a link to England. National Grid’s submission to the Commons Energy and Climate Change Committee said England and Wales could meet their renewable and carbon emissions targets without any contribution from Scotland.

I might be persuaded if the independence on offer was a planned energy policy that provides safe, secure and sustainable generation, which contributes to the economic future of Scotland and eliminates fuel poverty. This should include a more diverse generation ownership model and a bigger role for local government as we see in parts of continental Europe. Not to mention public ownership. Even a majority of Tory voters now favour renationalisation of energy companies. In Scotland, energy generation is dominated by big business and I don’t see any willingness to tackle that issue. Fergus Ewing’s rush to parrot the energy companies response to Ed Miliband’s price freeze, indicates another status quo position.

In conclusion, I accept that it is possible to pursue different energy, economic and welfare policies under independence that could seriously tackle fuel poverty. The primary requirement as ever is political will. However, the proximity of almost the only energy trading partner creates real challenges for those advocating independence and they will need to do much better than, ‘the lights will go out in England’ if they are going to convince me of the merits of their case. A balanced energy strategy that ensures security of supply, builds a more diverse industry and eliminates fuel poverty, would be a good start.

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