Follow the money. That’s what we should do if we want to get to the heart of any issue when it comes to politics.
The energy price cap was raised by Ofgem this week by a whopping 54 percent. Please, remember this figure boys and girls, there will be questions later on.
The cap increase means on average an extra £700 a year on gas and electric bills.
The UK Chancellor, Rishi Sunak, said it was inevitable and necessary as the energy firms were selling gas and leccy to us cheaper than they were buying it on the international markets.
They should be on their uppers, then? Yes, almost 30 smaller firms went out of business as a result of a rise in wholesale prices.
They were taken over by the big six, who have weathered the storm.
So, back to the money.
The big energy providers all made big profits. More than a billion pounds between them according to their latest accounts.
Scottish Power profits dropped by 39 percent but still managed £82m in profit in the first nine months of 2021/
Eon, the German owned firm, made Euro1.2bn profit overall in the same period.
SSE latest profits show £600m profit. The pipeline delivering the cash is flowing nicely.
Still following the money, where do these firms who sell to use buy the energy from
They buy it from the firms that generate it, who drill it out of the sea and the ground.
Firms like Shell and Exxon and BP.
Shell recently posted most recent quarter year profits of $6.4bn the highest since 2014.
Their fourth quarter earnings in 2021 increased by 54 percent.
Now. Question time.
What was the energy cap percentage increase, by how much you can expect your average bill to rise by?
Correct, it was 54 percent.
In 2021 they made $19bn profit.
ExxonMobil,another one of the big oil and gas firms, made $9bn profit in the fourth quarter of last year, their highest in seven years.
Who are the losers in all this?
The poor energy firms can’t afford to sell us gas and electric at current prices because of global wholesale prices, so the cap has to be lifted.
That’s what we are told.
But for decades, millions of people haven’t been able afford to pay the exorbitant prices charged by these firms and they just had to put up with it.
The Chancellor says the energy crisis and rising prices are outside the control of governments.
When it comes to finances people have always been at the mercy of Chancellors, and the multi-national corporations that even they can’t control.
Both of them always retain a grip on our money, whether it is earnings, savings, pensions or debt.
This year they are tightening that grip to the point people have little room to breathe.
The Chancellor is pushing ahead with the National Insurance hike that will see a 1.5percent rise costing workers an average of £250 a year.
People on benefits, whether they are in work or out of work, have already been hammered by Universal Credit changes.
Council tax will almost certainly rise in Glasgow taking more money from household budgets.
Interest rates are about to go up, directly hitting people with mortgages and credit card debt.
Energy bills are going up in April and likely again in October.
Interest rate rises and energy cost increases mean that the cost of transport goes up, so the cost of food and other essentials will rise too.
In the light of the cost of living crisis, the so called mitigation measures announced by Rishi Sunak are tragic.
Here’s £200 later this year, he says and we’ll take it back over the next five years, making your future bills even higher.
Hundreds of thousands in Scotland will, we are told by Citizens Advice, face a choice of heating or eating. People will starve or freeze or both.
Meanwhile, the firms that extract the oil and gas from the ground and the seabed are raking in a fortune in profits.
Rishi Sunak says: “I know that many of you are feeling anxious”
Rishi Sunak wouldn’t know money related anxiety if it jumped out of his cornflakes.
The Chancellor is one of the richest people in Parliament, if not the richest.
His personal wealth is estimated at £200m, his wife belongs to one of the global superrich families, whose fortune is billions, plural.
We could pay everyone in Glasgow’s gas and leccy bills for the next year from their stash and they would not even notice a difference.
People all over the country will be at best financially worse off and at worst millions will be plunged deeper in poverty as a result of the price rises heading our way.
The chancellor, when asked about the cost of living crisis already hitting people about to come worse, he said: “You can point to some things that are going to make a difference.”
The £350, of which more than half is a loan, he said: “for the vast majority of families is a significant amount and it will make a difference”.
That’s rich coming from you, Rishi.
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