UK’s ‘broken’ energy system revealed as firms set to make £1.7bn in profit from customers

Campaigners attack ‘murky depths’ of market – as suppliers set to increase profits while families struggle

Adam Forrest
Political Correspondent

THE INDEPENDENT 

Britain’s energy suppliers are set to rake in a massive £1.74bn in profits from hard-pressed customers’ bills over the next 12 months, according to a shock new report.

It comes as a separate study found that regulator Ofgem’s energy price cap is preventing customers from accessing lower tariffs, harming competition and boosting inflation.

Rishi Sunak’s government has indicated it is unlikely to step in again to protect Britons still struggling with their energy bills – dismissing the idea of another subsidised price guarantee.

However, despite the ongoing cost of living crisis, UK energy companies will be allowed to increase the amount they make from customers on variable-rate tariffs.

Suppliers have seen the annual profit they make from the average customer on a variable tariff rise from £27 in 2017 to £130 in early 2023, according to Warm This Winter – a coalition of anti-poverty and green groups.

The gas and electricity giants will make £1.74bn profit from variable customers alone in the year ahead, according to the report, produced in partnership with the Future Energy Associates (FEA) analysts.

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Simon Francis, coordinator of the End Fuel Poverty campaign, said the report “shines a light on the murky depths of Britain’s broken energy system”.

Calling for the Sunak government to introduce a “social tariff” to guarantee an affordable rate for low-income families, Mr Francis added: “Without a fundamental overhaul of the energy grid and energy tariffs, households will continue to lose out while suppliers will profit.”

The figure does not include fixed-rate tariffs – or profits made through allowances for Covid debt and Russia’s invasion of Ukraine, which helped contribute to the enormous profits announced by British Gas and Scottish Power last month.

Ofgem recently raised how much gas and electricity suppliers could claim from hard-hit households to make up for costs incurred from both the pandemic and Ukraine war.

Energy secretary Grant Shapps says no more price guarantee

(PA Wire)

Since October 2022, energy firms have added an average of £41 a year to each bill as a “wholesale cost adjustment” to cover the extra costs of Vladimir Putin’s invasion.

And since April this year they also added an average of £12 a year in “Covid true up allowance” to cover the costs of bad debt which mounted up during the pandemic.

Last month British Gas announced record profits of £970m for the first six months of 2023, while Scottish Power made £576m in profit during the same period.

Labour condemned the “windfalls of war being pocketed by oil and gas companies”, while the Liberal Democrats said energy companies were being allowed to “rake in extraordinary profits while millions of families struggle”.

British Gas has announced record profits of £970m for the first six months of 2023

(PA)

Suppliers are also set to make an increasing amount of profit from so-called EBIT (earnings before interest and taxes) and headroom allowances in the energy price cap set by Ofgem.

While household energy bills are set to rise again before falling back only slightly next year, the regulator said it will allow the permitted profit margin further to rise from 1.9 per cent of EBIT to 2.4 per cent from later in 2023.

Tessa Khan, director of the anti-fossil fuel group Uplift, part of the Warm This Winter campaign, said: “The government seems to think the energy crisis has gone away, but for millions of households this winter will be as hard as the last.”

She added: “For energy companies to be pocketing this money, when bills are still twice what they were and so many people are being pushed into energy debt, is completely unacceptable.”

Energy secretary Grant Shapps has indicated that the government is unlikely to revive the energy price guarantee, which kept the average bill at £2,500 a year over the winter, after it ended in June.

It comes as a new report from centre-right think tank the Centre for Policy Studies (CPS) said the energy cap has gone “far beyond” its original purpose of providing protection for customers to become a “de facto regulated market price”.

The report urges the government to move “from a wartime to a peacetime regulatory regime” by abolishing the regulator’s cap and returning to a retail market “with competition at its heart”.

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It also backed calls for stronger protections against fuel poverty – such as a social tariff for households spending an excessive proportion of their income on energy bills.

“Utility firms are being actively discouraged from offering new, more affordable deals to customers because of state interventions in the energy market. Competition has all but disappeared, meaning prices are being kept high, further contributing to measured inflation,” said CPS energy and environment researcher Dillon Smith.

FEMALE RABBI

York’s first Rabbi for 800 years signals forgiveness for its darkest shame

As the appointment of Rabbi Elisheva marks a great historical watershed for York, Colin Speakman explores darker moments in the city’s past

byColin Speakman

 08-08-2023 

Rabbi Elisheva Salamo. Image credit: Ben Rich.

The arrival of Rabbi Dr Elisheva Salamo to serve the Liberal Jewish community of York is wonderful news, not just for the city’s Jewish community, but for the whole city of York. It will mark the closure of 800 years in which the Jewish community felt unwelcome in a city which early in 1190 witnessed one of the most violent and appalling acts of antisemitic violence and murder in British history.

By the late 12th century, York had largely recovered economically from the equally appalling and brutal Harrying of the North by England’s post-conquest Norman rulers and was prospering again, as it had in Anglo-Viking times, as a great port, manufacturing, and trading centre. Vital to the success of the medieval city was its Jewish community, moneylenders and financiers, who provided the banking and financial services York’s merchants depended on. About 20 families lived in the Coneygate area of the city. They had their own burial ground just outside the city walls.

The horrors of 12th century disinformation

But something which is all too familiar to those of us who live in the 21st century was about to occur, even without the dubious benefits of the internet and social media. ‘False facts’ were deliberately circulated to the ignorant and naïve local population in the city about supposed atrocities committed by Jews and Muslims, mainly to justify Richard I’s murderous and buccaneering Crusades. These apocryphal stories included Jews allegedly killing Christian children and consuming their blood for religious rituals.

On 16 March 1190, five rich local Norman landowners, whose estates had been plundered from previous Anglo-Viking owners during the Harrying of the North, and who all owed money to Jewish financiers, exploited these rumours among the local community to whip up hatred and instigate attacks on the Jewish houses and businesses in Coneygate. Terrified, the whole community fled from their homes to take sanctuary in Clifford’s Tower, the keep of York Castle, at that time still a wooden structure, though heavily fortified.

The mob, infuriated, set fire to the tower. Most members of the community, rather than being burned alive or falling into the hands of the mob, committed collective suicide, fathers killing their own wives and children, until the last man alive was killed by the Rabbi. A small minority who agreed to convert to Christianity were allowed to leave the burning castle but were murdered by the mob as soon as they stepped outside.

It was little consolation to the victims that later the five miscreant landowners were still ordered to pay their debts – presumably to relatives of the murdered families in other cities.

Clifford’s Tower, York, photo by author

The return of the diaspora

Yet by 1218, such was the need for their services by the city’s traders, Jewish moneylenders with their families were invited back live in the city, to enjoy specially protected status, free of persecution. This ended however in 1280 when another notoriously antisemitic monarch, Edward I, banned all Jews from England, not just York.

It took several centuries before Jewish people felt able to live in a city that had murdered their ancestors. Indeed, there was a belief that the city had been placed under a harem or censure which forbade Jews to live or sleep within its walls.

By the late 19th century there was a small Jewish community now living in the city, but their synagogue, which was established in 1886 in a building which still stands in Aldwark, finally closed in 1974.

In the last few years more people of Jewish faith and heritage have gradually returned to York, to what is now a modern liberal and dynamic European city, with tolerant attitudes and humane values at its heart. It wears its rich and complex history with pride, but a small plaque by the grass mound of the castle where the tragedy occurred, still records those events of over 800 years ago.

REGION

World heritage recognition for York is long overdue

BYCOLIN SPEAKMAN

 12 APRIL 2023 - UPDATED ON 24 APRIL 2023

A heinous chronicle

York is not unique in having dark shadows within its past. The wealth of cities such as Bristol, Liverpool and Lancaster came from profits from the vile practice of slavery. The Industrial Revolution which people all over the North are so proud of and celebrate as a symbol of a once ‘Great’ Britain, owed much to the huge boost in capital investment in new railways, mines, factories, engineering works and mills, which came from eyewatering sums of compensation paid to former slave owners.

Even more significant perhaps, the subsequent success of those industries was largely based on ruthless human exploitation. This was enforced, by the bayonet and the rifle, on huge populations within British colonies in Africa and the Indian subcontinent. Whole communities saw their own local manufacturing industries closed down but were forced to export raw material cheaply and buy imported British manufactured goods. They were also heavily taxed by the occupiers to pay for the armies that occupied their land. Victorian scientists even misused Darwin’s theories to suggest people of different skin colour to their own were of ‘inferior’ races. 

But racism goes even deeper than that. Antisemitic tropes are deeply embedded in much high and popular culture, from the writings of Richard Wagner to G K Chesterton, or even feelgood children’s author Roald Dahl.  

The necessity of eternal vigilance

Mankind’s inhumanity takes many forms. Xenophobia – hatred of the foreigner or anyone deemed to be different from ourselves – is like a cancer within the body politic, which never entirely vanishes, but soon resurfaces as and when economic circumstances allow. Populist politicians, of which Adolf Hitler was a notorious example, have an uncanny instinct to exploit such irrational fears for personal political gain, including using dog-whistle innuendos. 

Nigel Farage pointing at a poster showing lines of immigrants of colour, helped achieve Brexit, whilst Boris Johnson’s “piccaninny” and “letter box” jokes appealed in the same insidious way. Donald Trump’s incendiary ravings encourage others to break boundaries to new forms of insidious racism, now, arguably hidden behind the phrase ‘anti-woke’. Even to this day, various antisemitic conspiracy theories circulate, surfacing within the dark recesses of social media, a poison within the collective bloodstream of our consciousness.    

It is worth remembering the origin of the word ‘woke’ – to be awake to racism, antisemitism, bigotry, hatred. 

Small victories worthy of great celebration

Only education, and being constantly alert, can counter what might best be described as neo-fascism, of which antisemitism fulfils an integral part. But as the terrible events in York in 1190 reveal all too clearly, fascism was there in human behaviour and consciousness long before Hitler and Mussolini. 

So the fact that within Yorkshire’s historic capital there is now a 200-strong Liberal Jewish community, who have now appointed Rabbi Elisheva as their spiritual leader, is an important milestone to help atone and forgive the dark events of the past. This is a small victory, for decency, for humanity, for people of all and indeed of no faiths.

Something, in these dark times, for all of us who love York and Yorkshire, to celebrate.

Rabbi Elisheva. Image credit: Ben Rich

https://plawiuk.blogspot.com/2023/08/british-city-of-york-site-of-medieval.html

INSTITUTIONAL CHILD ABUSE

'Cesspit of sadism and paedophilia': School's survivors share experiences

Former pupils from the top fee-paying Edinburgh Academy share their accounts of abuse between the years of 1960 and 2000.

Inquiry into abuse at Edinburgh Academy to take place in August

Christina O'Neill
8 hours ag

Former pupils who suffered sexual and physical abuse at one of Scotland’s top fee-paying schools are to share their experiences at public hearings.

Eighteen former teachers and staff members at Edinburgh Academy have been accused of molesting pupils between 1960 and 2000.

The school will be the focus of the Scottish Child Abuse Inquiry taking place from August 8.

There will be 30 witnesses attending in person with a further 20 witness statements at the hearings.

I

TVBBC broadcaster Nicky Campbell

BBC broadcaster Nicky Campbell, who has spoken out about the abuse he suffered at the school, formed Edinburgh Academy Survivors last year with 39 former pupils.

A spokesman for the group condemned the school and said their own accounts are likely “the tip of a very big iceberg.”

EA Survivors spokesperson Giles Moffatt said: “Let there be no doubt that the Edinburgh Academy was once a cesspit of sadism and paedophilia.

“Past headmasters and governors of the school have been oblivious, indifferent, and downright callous about what happened on their watch.

“Our little group of 40-odd is the tip of a very big iceberg, formed over 50 years and affecting thousands of boys and girls, which is why we are looking to this inquiry to look into the history without fear or favour.”

Moffatt added: “We feel for those who gave evidence at similar hearings before us. Many went in blind and had limited power against the institutions which let them down in the first place.

“Fettes and Loretto in particular, mobilised the full arsenal of weapons of damage limitation. As a result, the Inquiry produced a report on Loretto which in places had echoes of a school prospectus.

“We would like to thank Police Scotland and the Crown Office for the decisive action they are taking and thankfully arrests and extraditions are on the horizon.

“We also recognise that the Edinburgh Academy of today is a considerably better place than years gone by, and we have been encouraged by the response of the school’s current management.”

The inquiry has been investigating residential care provisions at boarding schools for a number of years.

The Edinburgh Academy hearings follow similar inquiries into other leading Scottish schools including Fettes College and Loretto.

Mr Campbell previously alleged he was abused while at the school by former maths teacher and rugby coach Iain Wares, who also taught at Fettes College and now lives in South Africa.
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The 83-year-old was previously classed as a “protected person” under an order preventing his identification after claims that he abused children in the 1960s and 1970s at the two private schools came to light.

Scottish Child Abuse Inquiry chair Lady Smith ruled the true identity of the alleged perpetrator could be revealed after a legal challenge in March.

Wares faces more than 80 charges of historic abuse in Scotland relating to more than 40 victims.

Campbell is among those who have called for him to be extradited to Scotland.

SCAI Chair Lady Smith said: “Since March 2021, evidence about the background, administration and regulation of seven specific boarding schools in Scotland, and about the experiences of children who were boarders there, has been explored at public hearings as part of the Boarding Schools case study.

“Evidence about the experiences of boarders at Fettes College was heard during November and December 2021. Some of the Fettes’ witnesses also spoke of what happened at Edinburgh Academy.

Inquiry has investigated cases at schools including Fettes College

“After we completed our evidential hearings in relation to the initial group of seven schools in our Boarding Schools case study, a significant number of applicants and other witnesses came forward to provide evidence of their experiences at the Edinburgh Academy. So many that I decided their evidence needed to be explored in another set of public hearings.

“These hearings will take place throughout August, during which we plan to hear from over 30 witnesses in person, and over 20 witness statements will be read in.”

An Edinburgh Academy spokeswoman said: “We fully support the decision which allows former pupils who have bravely come forward to have their voices heard and provide evidence as part of the Scottish Child Abuse Inquiry (SCAI).

“As we have done from the outset of the SCAI being established in 2015, we will continue to support the inquiry and work closely with the relevant authorities.

“We would also like to reiterate that we deeply regret what has happened in the past. As any like-minded person, we are appalled by such behaviour and we would encourage anyone who has been the victim of abuse to contact Police Scotland.”

The inquiry’s boarding schools case study has examined the background, administration and regulation of boarding schools in Scotland, and the experiences of boarders at some specific schools.

The inquiry, which aims to raise public awareness of the abuse of children in care, is considering evidence up to December 17 2014, and which is within the living memory of any person who suffered abuse.

EA Survivors was formed by chance in 2022 following a podcast by Alex Renton and Nicky Campbell, which put a public spotlight on historical abuse at the Edinburgh Academy.

Posted in City of Edinburgh

NATIONAL(IST) SOCIALISM

Italy to hit banks with 40 percent windfall tax

The announcement follows weeks of criticism of lenders’ profits and of European Central Bank policy.

Prime Minister Meloni announced plans late Monday to slap a 40 percent one-off windfall tax on bank profits

 | Brendan Smialowski/AFP via Getty Images

BY BEN MUNSTER AND HANNAH BRENTON
AUGUST 8, 2023

Georgia Meloni is going after the banks.

In a move that surprised investors and political observers alike, Italy’s far-right government led by Prime Minister Meloni announced plans late Monday to slap a 40 percent one-off windfall tax on bank profits.

Italian lenders have been raking in huge benefits from higher interest rates on their loans at a time when ordinary people are struggling with the cost of living.

The eurozone's cost of living crisis, which has been marked by the highest inflation in 40 years and a faltering recovery from the pandemic, has provided fertile ground for politicians hoping to win support by targeting the finance industry and central bank policymakers.

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Matteo Salvini, Italy’s deputy prime minister, aimed fire at the European Central Bank, which is in charge of setting interest rates, rather than the banks themselves when he announced the plan at a press conference late Monday.

“The ECB’s rate hike has raised the cost of money for families and businesses,” he said. “There wasn’t, in turn, a diligent, rapid and important increase for consumers.”

The money will go on "tax cuts" and "help for first-time mortgage holders signed up in different times," he said.

Salvini said the new tax could generate a huge sum but was unable to say how much. Analysts say it's likely to be at least €2 billion but could be much more.

“Let’s not get into the merit of the figures,” Salvini said. “You only need to look at the first quarter profits of the banks to see that we’re not talking about a handful of millions, but potentially many billions.”

Italy has among the highest levels of home ownership in Europe, with the total outstanding value of mortgage lending in Italy climbing to €424 billion in 2022, according to data from Statista.

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Political target

Italy isn’t the first country to raise money from banks — as lenders increasingly find themselves a political target for not passing on profits from higher interest rates.

The left-wing government in Spain hit its banks with a windfall tax in November which was expected to raise €3 billion. Hungary, too, under far-right firebrand Viktor Orbán, has targeted its banks.

While U.K. lenders aren’t facing a tax, the Conservative government has hauled the banks in to demand they help struggling mortgage-holders and pass on higher savings rates.

Banks are seen as one of the few economic winners as central banks hike interest rates to try to get inflation under control.

The European Central Bank last month raised its key interest rate by another 0.25 percentage points — capping nine consecutive hikes and squeezing borrowers with the highest rates in 22 years.
Ready to help

Italian banks have come under pressure from the Italian government to provide relief for pressed mortgage holders.

Last month, Italian Bankers Association president Antonio Patuelli said lenders would be “at the ready” to help borrowers — though little changed in practice.

Patuelli’s statement came at a joint conference with Finance Minister Giancarlo Giorgetti, who had stressed the need to offer mortgage relief as “indispensable and urgent.”

Italian banks have also pursued bumper payouts to shareholders.

UniCredit in July announced plans to return €6.5 billion to its investors through sharebuybacks and dividends after record profits.

But bankers were left “really surprised” by the latest announcement, which followed months of false starts, according to two Italian banking officials with knowledge of the situation, granted anonymity to discuss a sensitive matter.

“The issue has been floated before many times but didn’t seem to have traction,” one of the people said.

The share prices of major Italian lenders Intesa Sanpaolo and UniCredit cratered by around 9 percent and 7 percent respectively after the announcement by 1 p.m. on Tuesday.

Beaver-like dams can protect communities from flooding, study finds



Leaky barriers can hold back water after storms, the study showed

(Daniel Jones/PA)

By Claire Hayhurst,

 PA  Today

River barriers similar to those built by beavers can protect communities at risk of flooding by storing water upstream then slowly releasing it, a study has found.

Researchers from Cardiff University and the University of Worcester assessed the impact of leaky barriers, made from natural material such as trees, branches, logs and leaves, on a small Shropshire river over a two-year period.

The barriers, made to imitate beaver dams, deliberately raise water levels upstream to slow down river flow through storage and diversion – providing benefits to the river and nearby farmland.

Scientists previously used numerical modelling to measure their impact but this study involved the gathering of data from 105 leaky barriers over a distance of three miles.

Where flooding does occur, we often see extreme human and socio-economic cost. And so, it’s vital that we better understand how to combat these events in the most effective way possible

Dr Catherine Wilson, Cardiff University

The research, published in the Journal of Hydrology, found the site’s leaky barriers could store enough water to fill at least four Olympic-sized swimming pools during significant storm events such as Storm Dennis.

Raised water levels of up to 0.8 metres were recorded at each barrier, which the scientists said slowed the flow of the river during storm events.

Levels took between seven and nine days to return to normal, with water slowly released over a period of seven to 10 days – protecting communities from flooding downstream.

Dr Catherine Wilson, of Cardiff University’s School of Engineering, said: “In recent years, we’ve seen a significant increase in flood risk across the UK and internationally due to greater storm intensity and other climate change-related factors.

“Where flooding does occur, we often see extreme human and socio-economic cost. And so, it’s vital that we better understand how to combat these events in the most effective way possible.”

During the study, researchers placed monitoring equipment on leaky barriers spanning three channels to measure their effects on water levels upstream and downstream over time.

Drone images of the site were used to make accurate measurements of the land elevation in areas of the river covered by trees and plants.

Dr Wilson added: “For the first time, our study provides quantifiable in-depth evidence of the effectiveness of nature-based solutions in tackling these flood events.

“We show that leaky barriers are effective in slowing down the flow of the river during periods of rainfall, storing up vast quantities of water which would otherwise rush through causing damage to communities downstream.

“Instead, this force is slowly released over a period of a week to 10 days.

“Leaky barriers are most effective in narrow channels with steep banks and better at reducing flooding during smaller storm events than during larger ones.

“This tells us that they are a valuable addition to existing flood management strategies.

“Not only that, leaky barriers offer a low-cost solution of between £50 and £500 and are a sustainable flood defence which increases biodiversity in our rivers and on nearby land.”

Research continues to monitor the effectiveness of leaky barriers at the Shropshire site, one of 60 identified by the Department for Environment, Food and Rural Affairs, to evaluate natural flood management.

The scientists said findings from their study can be used by government and industry to develop flood defences for smaller, more frequent storms and to help create an approach for modelling leaky barriers during larger storms.

Professor Ian Maddock, Professor of River Science at the University of Worcester, said: “The results of the study have helped inform our work with local authorities to identify new sites for natural flood management.

“It’s enabled us to target sites where the installation of leaky barriers will have the greatest impact in reducing flood risk to communities and landowners downstream.”

The paper, Field-based monitoring of instream leaky barrier backwater and storage during storm events, is published in the Journal of Hydrology.