Energy company executives are lying about their costs and ever increasing profits - here's the proof - time to nationalise the energy industry

The energy companies claim their profits are not increasing. Yet Scottish Power’s own 2012 accounts show it more than doubled its net profits from £267 million in 2011 to £648 million in 2012 (1)

The energy companies claim the vast majority of any profits they do make are re-invested in new generation capacity. Yet in February Scottish Power’s parent company Iberdrola announced it was spending £890 million from Scottish power revenues on share dividends (2) – (4).

It also spent £23,000 sponsoring Labour, Conservative, SNP and Plaid Cymru conferences and events in 2012 (5). An investment to ensure no real regulation or renationalisation maybe? If so, cheap even if it had been ten times that.

Accountants who looked at the Big Six energy firms’ accounts, interviewed by Channel 4’s Dispatches, found they all issue similar share dividends of hundreds of millions of pounds a year (6).

The accountants also found the firms’ claims on their profit margins include only retail, excluding big profit margins on generation and wholesale of energy, with all six firms being generators as well as retailers (7).  

Office of National Statistics and Ofgem figures show that while wholesale energy costs increased by 38% between 2005 and 2010, customers bills increased by 73%, almost twice as much. Add in that the companies were making profits on generation and wholesale and energy costs can’t possibly account for the increase in bills (8).

A study by Manchester University in 2011 found the big six energy firms systematically profiteering over years by raising their prices by the full amount every time wholesale gas costs increased, but, when costs fell, delaying passing on the savings to customers and only passing on part of them when they did (9).

Ofgem, the energy regulator, recently estimated that energy companies have been increasing prices by up to 10% a year while wholesale gas costs are falling (10).

It also estimates that their profit margins have doubled in the last year , while infrastructure costs, wholesale energy costs and green levies have added just £35 to the average bill in the same period (11) – (12).

It's not the green levies -
they're under 4% of the average household’s bill

The energy companies, PM David Cameron and the Daily Mail want you to believe that the main cause of rising bills has been “immoral” green levies added to them by the last government (13) – (15).

Yet most of these levies have nothing to do with renewable energy or reducing CO2 emissions. They’re to reduce energy bills for the poorest households.

Only four are ‘green’ measures – the Renewables Obligation, the EU Emissions Trading Scheme and the Carbon Price Floor, and Feed In Tariffs, which allow consumers to save on their bills by generating electricity using small wind turbines or rooftop solar panels. The four together put £50 or about 3.95% on the average household’s annual bill of £1,267 a year (16) – (17).

So green measures are under 4% of the average bill ; apart from the fact that as global demand for fossil fuels is rising faster than supply, if we don’t invest in alternatives to increase supply, energy prices will rise faster.

The other two main government levies on fuel bills, the Energy Companies Obligation and the Warm Home Discount, reduce bills for people on low incomes. The final two, and smallest, are for Smart Meters and Better Billing to reduce all consumers’ energy bills. These four non-green levies add £61 a year to the average bill or 4.81% (18) – (19).

Privatisation is only a success for the 1%
at everyone else’s expense :
time for renationalisation

Privatisation of the energy industry is only a success for the wealthy executives and major shareholders of the companies, at everyone else’s expense.

The average income of the majority of people in the UK relative to inflation has been falling ever since the financial crisis ; by 2% in this year to August alone (20).  

Almost one in four people in the UK are spending their savings to pay energy bills, one in six have gone into debt to pay them. Thousands are estimated to die each winter due to illnesses caused by cold due to being unable to afford to heat their homes (21) – (22).

Yet the energy companies’ executives are still increasing their profits and spending them on dividends. That kind of massive redistribution of wealth from the vast majority to a tiny and already wealthy minority is unacceptable. Nationalisation must follow.

Even with the economy growing again, so much existing and new wealth is being taken from the majority by a small majority that economic growth is not stopping the majority continuing to get worse off. Unless we want to end up like Brazil, with a tiny wealthy elite and everyone else in poverty, we have to reverse the inequality.

What you can do

• Sign this 38 degrees petition and/or this petition on the government’s website calling for the renationalisation of the energy industry to end profiteering by the energy companies.

 

• Contact your MP asking him to urge his / her party to adopt renationalisation of the energy industry and call for it in parliament and in his or her column in the local newspaper. You can find who your MP is using your post code and contact them on this site.

 

• Email letters or text messages to newspapers, magazines and radio and TV programmes when they’re discussing energy prices to call for renationalisation

 

Sources

 

(1) = SCOTTISH POWER UK PLC DIRECTORS’ REPORT AND ACCOUNTS

FOR THE YEAR ENDED 31 DECEMBER 2012, page 3,
http://www.scottishpowerrenewables.com/userfiles/file/Consolidated_Report_%26_Accounts_Scottish_Power_UK_plc_2012.pdf

(2) = BBC News 11 Jul 2013 ‘Profits soar at Glasgow-based Scottish Power’,
http://www.bbc.co.uk/news/uk-scotland-scotland-business-23270146

(3) = Financial Times / ft.com 17 Feb 2013 ‘Iberdrola defends £890m UK unit dividend’,
http://www.ft.com/cms/s/0/b020833a-78fb-11e2-b4df-00144feabdc0.html#axzz2jiPiV4Q5

(4) = thisismoney.co.uk 17 Feb 2013 ‘Spanish owner takes £900m dividend from Scottish Power despite pushing through a big increase in bills for British customers’,
http://www.thisismoney.co.uk/money/markets/article-2280170/Scottish-Power-defends-900m-Iberdrola-dividend.html

(5) = SCOTTISH POWER UK PLC DIRECTORS’ REPORT AND ACCOUNTS

FOR THE YEAR ENDED 31 DECEMBER 2012, page 14,
http://www.scottishpowerrenewables.com/userfiles/file/Consolidated_Report_%26_Accounts_Scottish_Power_UK_plc_2012.pdf

(6) = Channel4.com 04 Nov 2013 ‘Dispatches delves into the accounts of the Big Six energy suppliers’, http://www.channel4.com/info/press/news/dispatches-delves-into-the-accounts-of-big-six-energy-suppliers

(7) = See (6) above

(8) = BBC News 11 Jan 2012 ‘Energy bills explained’,
http://www.bbc.co.uk/news/business-15352599

(9) = Guardian 02 Dec 2011 ‘Big six energy firms face fresh accusations of profiteering’,
http://www.theguardian.com/business/2011/dec/02/energy-firms-accusations-profiteering-electricity

(10) = Guardian 29 Oct 2013 ‘Energy firms raised prices despite drop in wholesale costs’,
http://www.theguardian.com/business/2013/oct/29/energy-firms-raised-prices-as-wholesale-costs-fall

(11) = Independent 29 Oct 2013 ‘Big Six energy producers under fire over excessive profits ahead of grilling by MPs’,
http://www.independent.co.uk/news/business/news/big-six-energy-producers-under-fire-over-excessive-profits-ahead-of-grilling-by-mps-8909608.html

(12) = Guardian 29 Oct 2013 ‘Energy firms 'overcharge by £3.7bn a year'’, http://www.theguardian.com/business/2013/oct/29/energy-firms-overcharge-accusation

(13) = Telegraph 29 Oct 2013 ‘Scrap green tax and energy bills will fall, say Big Six’, http://www.telegraph.co.uk/finance/newsbysector/energy/10413396/Scrap-green-tax-and-energy-bills-will-fall-say-Big-Six.html

(14) = theguardian.com 23 Oct 2013 ‘David Cameron pledges to reverse 'green charges' on energy bills’,
http://www.theguardian.com/business/2013/oct/23/energy-industry-competition-test-cameron

(15) = Daily Mail 13 Oct 20134 ‘Red Ed's great green obsession... and the real reason YOUR bill has gone through the roof’, http://www.dailymail.co.uk/news/article-2456760/Red-Eds-great-green-obsession--real-reason-YOUR-gone-roof-The-hidden-subsidies-household-pays-year-thanks-Milibands-laws.html

(16) = theguardian.com 23 Oct 2013 ‘Green energy levies: how much do they cost and will they be cut?’, http://www.theguardian.com/money/2013/oct/23/green-energy-levies-how-much

(17) = Full Fact 23 Oct 2013 ‘How much do 'green taxes' add to energy bills?’,
http://fullfact.org/factchecks/energy_bills_green_taxes-29250

(18) = see (10) above

(19) = See (11) above

(20) = guardian 16 Oct 2013 ‘UK unemployment data: 0.7% average pay rise dwarfed by inflation’,
http://www.theguardian.com/business/2013/oct/16/uk-unemployment-average-pay-rise-inflation

(21) = see (6) above

(22) = BBC News 19 Oct 2011 ‘Rising energy bills causing fuel poverty deaths’,
http://www.bbc.co.uk/news/business-15359312

Texas study actually shows fracking industry does contaminate water - and Institute which conducted it is funded by fracking company

Much of the media are reporting that a new study has supposedly shown that there is no evidence of fracking contaminating water. If you read the full study it says ‘no direct evidence’ (implying there is indirect evidence) and is also playing with words by pretending that drilling the well for fracking, lining it and transporting chemicals used in fracking above ground are not fracking – as they are separate stages of the process. This is like arguing that the BP / Halliburton DeepWater Horizon spill in the Gulf of Mexico was nothing to do with the oil drilling industry because it was the result of the casing of the well being done imperfectly. It’s just playing with words. The reality is the fracking industry does contaminate water (and also air through flaring).

You can even find out half of this from the press release from the University, never mind the original study (1).

On top of that the people quoting this study are ignoring the fact that it was done by the Energy Institute of the University of Texas, which is funded by ConocoPhillips with at least $1.5million, ConocoPhillips being an oil and gas company currently facing law suits relating to it's fracking activities. That’s only the money we know about, because many American universities are refusing to say whether particular studies were funded by private companies or not, let alone which companies or by how much (2) – (3).

Even leaving aside the bias and conflict of interest in the study due to it's funding by a company involved in fracking (which means it has no credibility anyway), if you actually read the whole study, it's full findings are very different to the carefully misleading wording used in claiming that there's "no evidence that fracking contaminates water"

Time magazine reports that the study found that "Instead, researchers concluded that the problems associated with fracking tend to be due to mistakes made in other parts of the drilling process, like casing failures that allow drilling fluids and gas to escape from a well, poor cement jobs and spills on the surface. “These problems are not unique to hydraulic fracturing,” Charles Groat, an Energy Institute associate director and the lead author of the study, said in a statement." (4) So in other words fracking does cause these problems – but so does drilling for oil on land (something everyone knows already, so redundant).

It found that fracking does contaminate water in practice, because mistakes are made and short-cuts taken, leading to breaches in the casing during fracking and spilling of fracking chemicals above ground just as with drilling for oil, except that fracking pollutes ground water on land and so our drinking water.

Additionally the study admits that methane and various toxic materials present in the earth before fracturing begins may be released into wells and ground water due to fracturing, contaminating it - which shows how dishonest the summary claiming 'no evidence of contamination due to fracking' is.

See page 19 of the original study on this, which says "It appears that many of the water quality changes observed in water wells in a similar time frame as shale gas operations may be due to mobilization of constituents that were already present in the wells by energy (vibrations and pressure pulses) put into the ground during drilling and other operations rather than by hydraulic fracturing fluids or leakage from the well casing. As the vibrations and pressure changes disturb the wells, accumulated particles of iron and manganese oxides, as well as other materials on the casing wall and well bottom, may become agitated into suspension causing changes in color (red, orange or gold), increasing turbidity, and release of odors." (5)

Also note the ‘may’ – not very definite language.

So saying fracking doesn't cause it is misleading if the drilling to prepare for fracking the transportation of chemicals for fracking and the lining of the drilled wells does.

When this study and other proponents of fracking claim that water or air contamination is “not caused by fracking” it’s like claiming that the BP / Halliburton DeepWater Horizon oil spill was not due to drilling for oil because it was due to faulty capping of the well with concrete – it’s playing with words. In fact the fracking industry’s activities do cause water and air pollution just as oil drilling does cause oil spills and water and air pollution. The difference with fracking is that it's on land where spills can pollute water supplies and gas from flaring is likely to have dispersed less than gas flared on oil rigs by the time it reaches land, meaning it will affect more people breathing it in.

(1) = Energy Institute of the University of Texas press release 23 Mar 2012 'Study Shows No Evidence of Groundwater Contamination from Hydraulic Fracturing', http://energy.utexas.edu/index.php?option=com_content&view=article&id=154:study-shows-no-evidence-of-groundwater-contamination-from-hydraulic-fracturing&catid=34:press-releases&Itemid=54

(2) = University of Texas ‘ConocoPhillips Gives $1.5 Million to Fund Cutting-Edge Energy Research’, http://giving.utexas.edu/2010/11/01/conocophillips-energy-research/

(3) = BreakingLawSuitNews.com 23 Jan 2012 ‘Lawsuit Filed Against ConocoPhillips for Alleged Fracking-Related Water Contamination’ http://breakinglawsuitnews.com/lawsuit-filed-against-conocophillips-for-alleged-fracking-related-water-contamination/

(4) = Time 17 Feb 2012 ‘Shale Gas: It’s Not the Fracking That Might Be the Problem. It’s Everything Else’, http://ecocentric.blogs.time.com/2012/02/17/shale-gas-its-not-the-fracking-that-might-be-the-problem-its-everything-else/#ixzz1pKQpiwwM

(5) = Groat, Charles G. & Grimshaw, Thomas W. ( 2012) ‘Fact-Based Regulation for Environmental Protection in Shale Gas Development’,  Energy Institute of the University of Texas, February 2012, http://www.velaw.com/UploadedFiles/VEsite/Resources/ei_shale_gas_reg_summary1202[1].pdf (seems to download ok after a couple of refreshes on Internet Explorer, but won’t download on Firefox)

David Cameron's talk of Christian values is empty while he punishes the poorest and the majority while helping the wealthiest get wealthier

Prime Minister David Cameron’s talk of Christian values is empty coming from a man whose government is cutting benefits for the disabled and forced people into homelessness by increasing rents for people living in social housing  - including hundreds of thousands of disabled people - to 80% of market rates, while capping housing benefit (1) – (9).

While he claims ‘there is no money’ for the disabled or those he makes homelessness or  unemployed, he provides taxpayer subsidies to arms companies and won’t tax banks or hedge funds a penny more.

The government is paying BAE billions to build an aircraft carrier which will be left to rust; and billions more for another which will have just 6 aircraft by 2020. The National Audit Office found Cameron’s claim that it would be more expensive to cancel the contract was false (10) – (13).

Department for International Development Minister Andrew Mitchell told parliament that UK foreign aid to India is intended to secure trade deals with India including £6.6bn of  British fighter jets (14). There is money for the war in Afghanistan too and for new PFI contracts, which the Treasury Select Committee found cost taxpayers 70% more to repay per pound than funding by taxation or loans (15) – (16).

Cameron protects the City of London financial sector from new taxes and regulations (17). This includes stock market traders and hedge fund and bank managers who caused the financial crisis, on an average income of £100,000 per year including bonuses, who got a 12% pay increase in 6 months (18) – (19). At the same time he’s making hundreds of thousands of teachers, nurses, police and others unemployed (20).

Then, with six people unemployed for every job available, even on the government’s fiddled figures, his party labels them lazy scroungers (21) – (22).

His government cracks down hard on benefit fraud, which amounts to just £1.6 billion each year out of over £187 billion, with fraudulent claims made by just 0.6% of benefit claimants, often for very small amounts (The inaccurate £6 billion figure the government sometimes claims for benefit fraud actually includes mistakes made – many of them by Department of Work and Pensions staff, not claimants.) (23) – (24).

Meanwhile each year between £6.9 billion and £12.7 billion of benefits that people are entitled to go unpaid either because they are unclaimed or because staff wrongly or mistakenly refuse them to people entitled to them (25).

So at least 4 times as much money isn’t paid out in benefits to people entitled to them as is taken by fraud.

The UK National Fraud Authority’s reports show that the vast majority of fraud each year in the UK is tax fraud (around £15 billion a year) and private sector company and individual criminal fraud most of the rest (around £16 billion a year) (see page 7 of their annual report for 2011). So benefit fraud is peanuts by comparison (26).

At the same time Cameron allows tax havens in the Channel Islands and Belize to remain and lets the Inland revenue do sweetheart deals with big companies to get off with billions in taxes each year (27).

While it’s estimated at least 3,000 people will die of cold related illnesses this year in the UK  due to being unable to afford to heat their homes ; and with the proportion of households in fuel poverty having risen from a fifth to a quarter under the Coalition, Cameron’s government allows the big energy companies off with what a study by Manchester University found to be profiteering – raising their prices immediately by 80% of cost increases when their costs go up, but when costs fall cutting prices to consumers by only 50% of the fall in the wholesale costs of gas, coal and oil generated electricity (28) – (30).

As a result the gap between energy companies’ costs per unit of electricity or gas and their prices in the UK rose from £1.93 in 2004 to £4 in 2010. It’s since fallen due to media coverage – but is still much higher than in 2004 at £2.73 (31).

Yet no hint of capping energy profiteering coming from Cameron’s government.

In Cameron’s version of the Bible does Jesus invite the money-changers into the temple to discuss how they can work together to ring more money out of the poorest?

 (1) = guardian.co.uk 16 Dec 2011 ‘Cameron calls for return to Christian values as King James Bible turns 400’, http://www.guardian.co.uk/world/2011/dec/16/cameron-king-james-bible-anniversary

(2) = Guardian.co.uk 21 Oct 2011 ‘Disability groups fear further benefit cuts after miscalculation’, http://www.guardian.co.uk/society/2011/oct/21/disability-groups-further-benefit-cuts

(3) = BBC 08 Jul 2011 ‘Affordable rent housing plans 'to hit London families'’,http://www.bbc.co.uk/news/uk-england-london-14073437 ; ‘Families will struggle to afford multi-bedroom homes in London if government proposals for a new "affordable rent" tariff are introduced, a report by the London Assembly has said. Social housing tenants would be charged 80% of the market rent under the plans.But this is generally higher than the current level and may make payments tricky for families, the assembly's planning and housing committee said. And the proposed cap on benefits could make things even worse, it added. "In this example, new clients could therefore be facing rents that are higher by nearly 100% for a one-bedroom flat and over 300% for a four-bedroom property." This week the government said the changes to housing benefits were about "fairness" and were needed to reduce a bill "which has spiralled to £21bn a year under Labour". But Labour criticised the coalition after it emerged a senior civil servant had warned 20,000 people could be left homeless by the cap on benefits.’

(4) = Observer 21 Aug 2011 ‘Families 'will be priced out of social housing by plans for higher rents' - Proposed rent rises will be unaffordable across much of urban England, not just London, study warns’, http://www.guardian.co.uk/society/2011/aug/21/families-priced-out-social-housing

(5) = BBC News 11 Mar 2011 ‘Housing benefit cut to hit 450,000 disabled people’, http://www.bbc.co.uk/news/uk-politics-12714313 , ‘An assessment from the Department for Work and Pensions shows the change will leave 450,000 disabled people an average of £13 a week worse off.’

(6) = Scottish Government Communities Analytical Services January 2011 ‘Housing Benefit Changes : Scottish Impact Assessment’ (1^st draft version),http://www.google.co.uk/url?sa=t&rct=j&q=%22shelter%20scotland%22%20rent%2080%25%20market%20rates&source=web&cd=9&ved=0CFsQFjAI&url=http%3A%2F%2Fwww.scotland.gov.uk%2FResource%2FDoc%2F1125%2F0110252.doc&ei=a0KzTuzaN8OO8gO6p4jxBA&usg=AFQjCNGZf0X0ZRayjdogzPZqTzkV8I7JXA&cad=rja

(7) = Shelter (England) 12 Oct 2011 ‘Rent rises hit home’, http://england.shelter.org.uk/news/october_2011/rental_market_in_crisis

(8) = Shelter Scotland 21 Sep 2011 ‘50% Cut In Affordable Housing Budget As SNP Government’s Manifesto Pledge Turns to Rubble’, http://scotland.shelter.org.uk/media/press_releases/press_release_folder/2011/50_cut_in_affordable_housing_budget_as_snp_governments_manifesto_pledge_turns_to_rubble

(9) = BBC News 27 Oct 2010 ‘No change to housing benefit plan - Cameron’, http://www.bbc.co.uk/news/uk-11633163

(10) = Guardian 07 Jul 2011 ‘National Audit Office challenges £6bn project to build aircraft carriers’,http://www.guardian.co.uk/uk/2011/jul/07/nao-report-aircraft-carriers-navy

(11) = guardian.co.uk  11 Jul 2011 ‘David Cameron 'prevented independent watchdog seeing aircraft carrier papers'’,http://www.guardian.co.uk/uk/2011/jul/11/david-cameron-aircraft-carriers

(12) = Channel 4 News 07 Jul 2011 ‘Guardian 07 Jul 2011 ‘Full fact check : the real cost of cancelling aircraft carriers’http://blogs.channel4.com/factcheck/factcheck-the-real-cost-of-cancelling-aircraft-carriers/7210; ‘In 2007, the Labour government decided to build two 65,000-ton Queen Elizabeth-class aircraft carriers at an estimated cost of £3.65bn….But since then, costs have spiralled dramatically, with the projected outlay now thought to be £6.24bn for just one fully operational carrier, the Queen Elizabeth…..The second ship – the Prince of Wales – will be built, but left in a state of “extended readiness”, meaning that fighter planes won’t be able to launch from or land on its deck…..It gets worse: the NAOnow thinks the eventual bill for the programme “will significantly exceed £10 billion”.’

(13) = Guardian 29 Nov 2011 ‘MPs warn Royal Navy's carriers will be costly, late, and of limited use’, http://www.guardian.co.uk/uk/2011/nov/29/royal-navy-carriers-impaired-use-public-accounts-committee ; government admits one carrier to be mothballed on construction in 2016, one to have no planes on it till 2020, when it will have only 6, raised to 12 in 2023

(14) = Independent 17 Dec 2011 ‘Aid to India part of broad plan to build trade and investment, says minister ’, http://www.independent.co.uk/news/uk/politics/aid-to-india-part-of-broad-plan-to-build-trade-and-investment-says-minister-6278373.html , ‘The Government's controversial decision to continue giving money to India, a nation that has more billionaires than the UK and an aid programme of its own, is directly linked to developing trade and investment opportunities, a senior minister admitted yesterday.

In terms of perhaps surprising bluntness, international development minister Andrew Mitchell said the decision to spend £1.2bn over the next five years was part of a broader partnership that also included the hoped-for sale of fighter jets to India…. One potential deal officials are anxiously following is the sale of 126 fighter jets to Delhi. The EuroFighter Typhoon, made by a European consortium including Britain's BAE Systems, is one of two jets that have made the final shortlist in a deal worth an estimated £6.6bn.’

(15) = guardian.co.uk 19 Jul 2011 ‘300 schools to be built with £2bn PFI scheme’, http://www.guardian.co.uk/education/2011/jul/19/300-schools-built-private-finance-scheme

(16) = BBC News ‘PFI projects 'poor value for money', say MPs’, http://www.bbc.co.uk/news/uk-politics-14574059 ; ‘The Private Finance Initiative (PFI) used by successive governments to pay for new schools and hospitals is poor value for money, MPs have said. The Treasury select committee said PFI was no more efficient than other forms of borrowing and it was "illusory" that it shielded the taxpayer from risk. Government had become "addicted" to PFI, the committee's Tory chair said…. In a critical report, the cross-party Treasury select committee said the long-term expense of PFI deals - where the private sector shoulders the upfront cost and is typically repaid by the taxpayer over a 30-year period - were now much higher than more conventional forms of borrowing. Due to the financing costs involved, it said paying off a £1bn debt incurred through PFI cost the taxpayer equivalent to a direct government debt of £1.7bn.’

(17) = Guardian 07 Dec 2011 ‘David Cameron threatens veto if EU treaty fails to protect City of London’, http://www.guardian.co.uk/world/2011/dec/07/cameron-threatens-veto-eu-treaty

(18) = Astbury Marsden Compensation Survey 2011 – Banking Infrastructure London,http://docs.google.com/viewer?a=v&q=cache:tN8-iJkGpa8J:www.astburymarsden.com/documents/Astbury%2520Marsden%2520Compensation%2520Survey%25202011_Banking%2520Infrastructure%2520London%2520small.pdf+Astbury+Marsden+report+city+pay&hl=en&gl=uk&pid=bl&srcid=ADGEESjCp35WxasQC0uKU6hyPufcF3PKQgqywr0k1qNAEGK_4wMSeFBhohPhKrGo7oTiY4RLukF4E51KGYTxH6kmRfhX-1zs80hIKdv6Ckao6ZzZxFrjD6HI5anmt52lZR3QiNTc0ttx&sig=AHIEtbS9vlPCGJzgvi4HFde7s45wAlnw_w ; shows average salary for city of London financial sector is £83,000 with 12% increase in 6 months in 2011

(19) = Guardian 28 Nov 2011 ‘Banks under fresh pressure to curb bonus and dividend payouts’, http://www.guardian.co.uk/business/2011/nov/28/banks-curb-bonuses-dividends ; ‘According to a survey by headhunters Astbury Marsden published on Monday, City professionals expect an average bonus of 24% of their basic pay for 2011, indicating a payout of £19,920 on an average salary of £83,000.’ (which brings their average annual income including bonuses to about £103,000)

(20) = guardian.co.uk 29 Nov 2011 ‘Cuts: an extra 300,000 public sector jobs now face the axe’, http://www.guardian.co.uk/society/patrick-butler-cuts-blog/2011/nov/29/300k-extra-public-sector-jobs-face-axe , ‘The Office for Budgetary Responsibility now reckons 710,000 public service jobs - not 410,000 - will go over the next five years.’

(21) = Office for National Statistics ‘Labour Market Statistics, November 2011’, http://www.ons.gov.uk/ons/rel/lms/labour-market-statistics/november-2011/index.html ; shows 2.62 million people unemployed in 3^rd quarter of 2011

(22) = Labour market statistics: 16 Nov 2011 – Vacancies - http://www.ons.gov.uk/ons/rel/lms/labour-market-statistics/november-2011/statistical-bulletin.html#tab-Vacancies ; shows 462,000 job vacancies in 3^rd quarter of 2011

(23) = Guardian  01 Feb 2011 ‘Benefit fraud: spies in the welfare war’,http://www.guardian.co.uk/society/2011/feb/01/benefits-fraud-investigators ; ‘The Salvation Army and a number of other charities have written to the prime minister pointing out that the £5bn figure highlighted by the chancellor was "a threefold exaggeration of the true government estimate of benefit fraud". The frequently cited figure is achieved by adding the estimated amount of fraudulent claims (approximately £1.6bn) to the estimated total of claims made as a result of an error either by the claimant or the official handling their claim….There is an artful misrepresentation here; the suggestion is that the benefits bills is out of control because vast quantities of fraud is being committed by benefits claimants – so cutting the bill is just a question of tackling fraud. It is true that the benefits bill has grown rapidly, from £125bn in 1996/7 to £187bn in 2009/10, but this is not the result of increased fraud. The cost is higher because more people are (legitimately) claiming benefits and because an ageing population is making the cost of pensions soar. Less than 1% of people on benefits commit fraud, and those who do, campaigners argue, are often the poorest of the poor, and the sums involved very small.

(24) = Full Fact 01 Nov 2010 ‘Calls grow for George Osborne to correct the record’,http://fullfact.org/blog/calls_grow_for_george_osborne_to_correct_the_record-2364

(25) = Hansard House of Commons Written Answers 16 March 2011column 401w  ‘Social Security Benefits’ http://www.publications.parliament.uk/pa/cm201011/cmhansrd/cm110316/text/110316w0004.htm#1103171000102 ; ‘Dr Whiteford: To ask the Secretary of State for Work and Pensions what estimate he has made of monetary value of unclaimed benefits in the latest period for which figures are available; and how much was unclaimed for each benefit and allowance type. [45049].Chris Grayling: For the six income-related benefits for which estimates are available there was between £6,930 million and £12,700 million left unclaimed in 2008-09’

(26) = National Fraud Authority Jan 2011 ‘Annual fraud indicator’,http://www.homeoffice.gov.uk/publications/agencies-public-bodies/nfa/annual-fraud-indicator/annual-fraud-indicator-2011?view=Binary

(27) = Guardian 20 Dec 2011 ‘HMRC hid 'sweetheart' tax deals for big business, MPs say’, http://www.guardian.co.uk/politics/2011/dec/20/inland-revenue-sweetheart-tax-deals

(28) = guardian.co.uk 19 Oct 2011 ‘Fuel poverty 'will claim 2,700 victims this winter'’, http://www.guardian.co.uk/money/2011/oct/19/fuel-poverty-2700-victims-winter ; figure is if only 10% of 27,000 cold related excess deaths in winter are due to fuel poverty ; figure is for England and Wales only so including Scotland , with Scotland having a population of 5.2 million and England and Wales 63 million, there will be 222 cold related deaths in Scotland this winter, which, added to the 2,700 in England and Wales comes to 2922 – roughly 3,000)

(29) = guardian.co.uk 01 Dec 2011 ‘Fuel poverty affects a quarter of UK's households as bills soar and pay freezes’, http://www.guardian.co.uk/society/2011/dec/01/fuel-poverty-affects-quarter-households

(30) = guardian.co.uk 02 Dec 2011 ‘Big six energy firms face fresh accusations of profiteering’, http://www.guardian.co.uk/business/2011/dec/02/energy-firms-accusations-profiteering-electricity

(31) = See (30) above

A sense of entitlement doesn’t mean wanting a job and a pension , Sir Roger Carr, it means unlimited greed at the expense of others

Many of the same people who are paying themselves  salaries from several hundred thousands to millions every year, plus the same again in bonuses, are condemning public sector employees for their ‘sense of entitlement’ in wanting jobs and pensions; and the unemployed for wanting to have enough money to eat. One of them is Sir Roger Carr, the head of the CBI (Confederation of British Industry).

Last month the Independent reported Sir Roger telling a conference sponsored by Barclays bank’s corporate division that

 “Most of us... have grown up in the West with a sense of entitlement – to jobs, opportunity, wealth,” he said. “What's happening all around us is a cultural cold shower, a move from entitlement, a recognition that things have changed, nothing is by right: we have to earn our place in a vigorously competitive world as individuals and as nations.”

adding that  “We need to encourage all those in positions of authority – government, opposition, regulators and commentators – to stop the demonisation of industry: banking, energy or defence.” (1)

Because of course it’s “demonisation” to place the blame for the crisis on the people who actually caused it, who demanded deregulation, got it and used it to commit fraud on a massive scale – often by buying and selling worthless ‘assets’ like collateral debt obligations and demanding a commission on each sale.

In Carr’s world, if regulators so much as criticise these industries now, never mind actually regulate them (little sign of that) that’s ‘demonisation’.

Demonising energy industry executives’ sense of entitlement

Since 2004 Sir Roger has been chairman of Centrica, which owns British Gas, of which Scottish Gas is a subsidiary.

According to Centrica’s website, Carr’s salary in 2010 was £470,000, up from £450,000 in 2009,  while in 2011 there was an average fall of 4.5% for everyone employed in the UK(far more for those made unemployed). Carr earned an absolute amount 18 times higher than median earnings in the UK of around £26,000 for most people in 2010 and 2011(2) – (4).

That’s only the pay for one of his four paid jobs, which, according to the CBI website, also include ‘deputy chairman & senior independent director of the Court of the Bank of England... senior advisor to KKR - the world's largest private equity company’ and ‘visiting fellow of Said Business School, University of Oxford’.

The Bank of England jobs seem to pay at least £150,000 a year based on the bank’s annual report, bringing Carr’s annual income to a minimum of £620,000 in 2010, or 23 times median earnings, without including his pay from KKR or the University of Oxford (5) .

Sam Laidlaw, the Chief Executive of Centrica, had a basic salary of £2 million in 2010. He also had shares and pension payments worth between £2 millionand £8million. That makes Laidlaw’s pay somewhere between 76 and 380 times median earnings in the UK (6) – (7).

I’d be surprised at his lack of self-consciousness in accusing the majority of people of ‘a sense of entitlement’ in these circumstances, but as the late American economist J.K Galbraith often pointed out, people making huge amounts of money often convince themselves this must be due to their own genius rather than to any unfairness or fault in the system they work in – and that anyone who has far less must have less due to their moral failings.

British Gas is one of the ‘big six’ British energy companies found to have continually increased it’s prices above rises in it’s costs, to have maintained price increases permanently after short term increases in the price of buying gas wholesale and to have failed to pass on anything like the full reduction in wholesale costs when prices fell.

A study by Manchester University found that‘In the first six months of 2004, retail electricity prices were on average £1.93 per 100 kilowatt hour higher than the wholesale measure. By 2010 this gap had more than doubled, to over £4. It narrowed in 2011 as a result of well-publicised cost increases in the wholesale market, but averaged £2.73 in summer – even before the price rises passed on to householders by the big six this autumn….. around 80% of the winter price spike was passed to the consumer price, but when wholesale markets fell in summer, retail prices moved far less – only around 50% of the amount… The data also shows that when wholesale prices suddenly spike – as they did in 2009 – consumer prices rapidly follow suit. However, prices fall back more slowly and to a lesser degree after the wholesale price spike abates.’ (8)

In short, profiteering on gas prices when the majority are suffering pay cuts in real terms and the poorest and pensioners are having to choose whether to heat their homes or eat.

Not only that, but an estimated 2,700 people in Britain will die this winter due to cold – due to being unable to afford to heat their homes(9).

That makes Sir Roger’s condemnation of the ‘sense of entitlement’ of others ring very hollow. In fact it makes it sound like the massive arrogance and smugness of someone who feels entitled to profit at everyone else’s expense – much like the hedge fund managers and the bank chief executives and government ministers.

It also makes his claim that the regulators are demonising the energy industry sound pretty far fetched ; and difficult to understand why a government which claims “we’re all in it together” thought he deserved to be given a knighthood in January this year.

Demonising the Defence Industry

Now I find myself itching at the fingertips to demonise the defence industry some, partly because it’s just so easy.

It has been arming murdering dictatorships like Saddam Hussein’s (in the 1970s and 1980s) and the Saudis (today).  If the dictators fail to pay then the Arms Export Credit Guaranteesystem means the taxpayer in the UK pays the bill, as they did after the 1991 war with Saddam.

Until well into the Arab Spring  British arms companies were also arming the dictatorships shooting protesters across the Arab world, with the approval of the Cameron government (10).

The defence industry gets government subsidies on a scale which most civilian manufacturing companies can only dream of – including the continuation of the construction of two of the largest aircraft carriers ever built by BAEsystems.

The excuse given by David Cameron is that the last government supposedly drafted the contracts in a way that would make cancellation more expensive than paying for both to be completed. Yet when the National Audit Office questioned this and requested documents on the cost and the terms of the contract, Cameron refused to let  them see any of them. When the NAO got hold of some documents, they found the cost has increased from £3.65 billion in 2007 to £6 billion today and probably £10 billion in the end. One will be ‘left in a state of “extended readiness”(i.e left to rust) when it’s finished in 2016, while the other won’t have any planes till 2020, when it’ll have just 6, then 12 in 2023(11) – (14).

That’s just one example of how the MoD subsidises arms companies for billions at taxpayers’ expense every year, using money that could provide services, fund research and development of new technologies and medicines, or provide loans to civilian industries that provide far more jobs.

Here are a couple of others.

The senior management of the banking, financial, energy and defence industries seem to think it’s clever to try to turn accusations of a ‘sense of entitlement’ back onto the majority. It lacks any credibility.

(1) = Independent 22 Nov 2011 ‘CBI president attacks 'sense of entitlement' ’, http://www.independent.co.uk/news/business/news/cbi-president-attacks-sense-of-entitlement-6265921.html

(2) = Centrica Annual Report and Accounts 2010 – Financials – Summary Reports -Directors' emoluments, pension benefits and interests in shares’ , http://www.centrica.com/files/reports/2010ar/index.asp?pageid=49

(3) = Guardian.co.uk 23 Nov 2011 ‘UK incomes fall 3.5% in real terms, ONS reveals’, http://www.guardian.co.uk/money/2011/nov/23/uk-household-earnings-fall?commentpage=last#end-of-comments(including people in part-time jobs, fall is 4.5% including inflation – a 0.5% rise minus 4.5% inflation)

(4) = Office for National Statistics ‘2011 Annual Survey of Hours and Earning -Median full-time gross annual earnings’, http://www.ons.gov.uk/ons/rel/ashe/annual-survey-of-hours-and-earnings/ashe-results-2011/ashe-statistical-bulletin-2011.html#tab-Annual-earnings

(5) = Bank of England Annual Report 2010 - Remuneration of Governors, Directors and MPC members, http://www.bankofengland.co.uk/publications/annualreport/2010/renumeration2010.pdf (page 40 under sub-heading ‘Other senior executives’)

(6) = See (2) above

(7) = Centrica – Governance - Aligning rewards with results  - Remuneration mix', http://www.centrica.com/files/reports/2010ar/index.asp?pageid=54 (shows salary makes up only about 20% of executives total annual payments)

(8) = guardian.co.uk 02 Dec 2011 ‘Big six energy firms face fresh accusations of profiteering’, http://www.guardian.co.uk/business/2011/dec/02/energy-firms-accusations-profiteering-electricity

(9) = guardian.co.uk 19 Oct 2011 ‘Fuel poverty 'will claim 2,700 victims this winter'’, http://www.guardian.co.uk/money/2011/oct/19/fuel-poverty-2700-victims-winter

(10) = guardian.co.uk 21 Jul 2011 ‘MP attacks Hague over review of arms sales to Arab regimes’, http://www.guardian.co.uk/politics/2011/jul/21/uk-arms-sales-middle-east , ‘Senior MPs have delivered a severe rebuke to the government over its approval of the sale of a wide range of arms, including sniper rifles, machine guns and "crowd control goods" to countries in the Middle East and north Africa……….Britain supplied the weapons despite official guidelines stating that exports of equipment that could be used for internal repression must be blocked. In a damning report earlier this year, the Commons arms export controls committees demanded an urgent review of exports to "authoritarian regimes worldwide"………..They referred specifically to the Mubarak and Gaddafi regimes in Egypt and Libya, to Bahrain, Syria, Yemen and Saudi Arabia. Observers said military trucks sent by the Saudis to help suppress demonstrations in Bahrain were British.’

(11) = Guardian 07 Jul 2011 ‘National Audit Office challenges £6bn project to build aircraft carriers’,http://www.guardian.co.uk/uk/2011/jul/07/nao-report-aircraft-carriers-navy

(12) = guardian.co.uk  11 Jul 2011 ‘David Cameron 'prevented independent watchdog seeing aircraft carrier papers'’,http://www.guardian.co.uk/uk/2011/jul/11/david-cameron-aircraft-carriers

(13) = Channel 4 News 07 Jul 2011 ‘Guardian 07 Jul 2011 ‘Full fact check : the real cost of cancelling aircraft carriers’http://blogs.channel4.com/factcheck/factcheck-the-real-cost-of-cancelling-aircraft-carriers/7210; ‘In 2007, the Labour government decided to build two 65,000-ton Queen Elizabeth-class aircraft carriers at an estimated cost of £3.65bn….But since then, costs have spiralled dramatically, with the projected outlay now thought to be £6.24bn for just one fully operational carrier, the Queen Elizabeth…..The second ship – the Prince of Wales – will be built, but left in a state of “extended readiness”, meaning that fighter planes won’t be able to launch from or land on its deck…..It gets worse: the NAOnow thinks the eventual bill for the programme “will significantly exceed £10 billion”.’

(14) = Guardian 29 Nov 2011 ‘MPs warn Royal Navy's carriers will be costly, late, and of limited use’, http://www.guardian.co.uk/uk/2011/nov/29/royal-navy-carriers-impaired-use-public-accounts-committee ; government admits one carrier to be mothballed on construction in 2016, one to have no planes on it till 2020, when it will have only 6, raised to 12 in 2023

Citigroup aren’t fit to give advice on banking never mind energy policy

One of the main critics of government investment in renewable energy in Scotland – the Citigroup investment bank – failed to predict the financial crisis, was one of the four banks most involved in and hardest hit by the sub-prime mortgage crisis – and invests heavily in tar sands, oil and coal (1). Given it’s inability to know what it should invest in itself in it’s own area of expertise – banking – why should anyone accept Citigroup as experts in an entirely separate area – energy policy?

The New York Times website reports that Citigroup required not one but three government bail-outs in the US, totalling $45 billion. The US Securities and Exchanges commission also charged Citigroup with telling investors it had invested only $13 billion in subprime mortgages, when the real figure was $50 billion (2).

This makes me less inclined to take their advice on anything. These are bankers who can’t run a bank and lie to investors, offering advice (with likely ulterior motives) on energy policy – something they have no expertise in.

Their other ulterior motive is likely to be their own heavy investment in coal, oil and tar sands compared to a relatively tiny stake in renewable. The Rainforest Action Network found that in 2010 Citigroup invested $34 billion in the former and less than 2% of that amount in renewables , including heavy investments in tar sand projects in Canada (3).

It could well be that some of the investment banks who are writing reports praising the Scottish government’s renewable energy targets also have ulterior motives (perhaps having invested in renewable themselves) and wanting to promote them as a result.

There are other more reputable groups criticising the Scottish government’s renewable energy target of 100% by 2020 as being unrealistic and likely to increase fuel poverty – like the Institution of Mechanical Engineers - but I still wouldn’t trust a company with a record like Citigroup’s to advise me on picking my nose never mind on energy policy.

(1) = CNN 15 Oct 2007 ‘Citi profits tumble as execs scramble’, http://money.cnn.com/2007/10/15/news/companies/citigroup_earnings/index.htm , ‘Citigroup is among a handful of banks that have been hard hit by this summer's subprime mortgage crisis. Three other banks - JPMorgan Chase (Charts, Fortune 500), Washington Mutual (Charts, Fortune 500) and Bank of America (Charts, Fortune 500) - are scheduled to report quarterly results this week.’

(2) = NYT.com Business 19 Oct 2011 > Companies > Citigroup Inc, http://topics.nytimes.com/top/news/business/companies/citigroup_inc/index.html

(3) = Dirty Oil Sands blog 11 Mar 2011 ‘Citi needs an intervention’ By Brant Olson | Rainforest Action Network, http://dirtyoilsands.org/blog/article/citi_needs_an_intervention

(4) = Institution of Mechanical Engineers ‘Scottish Energy 2020? A target too far?’,http://www.imeche.org/Scottish-Energy-2020?WT.mc_id=HP_110661

Any third round of quantitative easing money should by-pass the banks and go straight to businesses and people to restore employment and growth

then we have to deal with our energy and waste crises

The Bank of England’s Monetary Policy Committee have said there may be a third round of Quantitative Easing, after the first two failing to provide any benefit except increasing the banks’ reserves (1).

They failed because the banks are not passing the money on in loans at an interest rate that businesses can afford, partly because they’re afraid of not having big enough reserves to meet another crisis; and partly because their top managers have decided they can get off with that because politicians aren’t willing to risk any bank going under in case it sets off others like a string of dominoes and they take the rest of the economy with them.

Quantitative easing has been much derided because it’s a euphemism for printing money, but printing money is not always a bad idea – it depends on the circumstances and who the money is going to.

Printing money when inflation is low, deflation is a serious risk and the economy is on the edge of another recession and banks are refusing to loan is not unreasonable. Since banks across Europe are private creditors of the Greek government, which may be forced to default on it’s debts unless it’s creditors forgive the majority of them (with either option involving losses for the banks), quantitative easing is also seen as a way of ‘recapitalising’ the banks (i.e boosting their reserves) to avoid runs on them in the event of a default.

However if we’re going to print more money it should go in loans directly from the government to small and medium sized businesses at reasonable interest rates to boost employment; and in payments to the unemployed, the disabled and people on low and middle incomes. That way it can keep viable existing businesses going, start new ones and increase demand in the economy, rather than just padding out banks’ reserves. It would also involve a modest redistribution of some of the wealth spent on bank bail-outs back to the majority.

This could restore growth and employment levels in the short term, but we also need to re-regulate the banks, undoing decades of de-regulation from the 1980s on, or else another financial crisis could happen at any time.

That could restore at least some of the economic stability of the early post-1945 period. However we also face problems now that we didn’t face then.

Avoiding an Energy Crisis

There is the coming crisis of energy as remaining oil reserves becoming increasingly costly in money and energy to extract, along with increasing demand from China and Asia. To meet this we need increased taxes on oil and energy use to reduce waste of energy. We also need government subsidies and tax breaks for research and development of new energy sources.

Basically, long before oil reserves run out, we will hit ‘Peak Energy’ running short of energy due to the increasing energy costs of extracting oil. In the 1930s when we were extracting mostly the easiest to get at and easiest to refine oil reserves there was a return of 100 barrels of oil for every barrel of oil used to extract it (in fuel for vehicles, drilling, setting up pipelines, oil tankers etc). Today that has fallen to about 11 to 18 barrels for every 1 barrel used. (For more on ‘Peak Energy’ and ‘Net Energy’ see Mandy Meikle’s blog post here and Chris Martenson’s here, as well as this one).

That’s before you even take into account the climate change and other pollution caused.

If you think petrol prices are already high you’re right. However we can’t afford to reduce them if we want to make alternatives to oil based transport and electricity economically viable to develop soon enough to avoid a Peak Energy crisis – and if we don’t do that we’re going to be looking at rationing electricity and being unable to get anywhere by car, train or bus at all except at insane prices at best - and societal collapse into some kind of former Yugoslavia or Mad Max Beyond Thunderdome at worst. Either will make expensive petrol look like a picnic.

Having said that, far more of the taxes on petrol should be going to improving public transport and reducing thecost of using it. It’s no use telling people to use public transport more while making it more and more unaffordable and over-crowded and without more railway stations opened and more trains running.

The Rubbish and pollution Crises

On top of this there is a waste management crisis as we run out of space for landfill of rubbish (which in any case can pollute groundwater and release methane and other gases harmful to people living nearby). Government responses so far have focused on either shipping waste to developing countries which don't have the same regulations, causing illnesses and deaths there, or else incinerators as the cheapest option in the short term and a quick fix, ignoring the waste of energy and resources (especially oil based plastics)  involved and the toxic emissions. These emmisions are likely to increase the incidence of cancers, especially among children and may pollute farmland and so food and water supplies.

Instead we should have a recycling tax on all companies in Scotland or the UK, with companies producing the least waste and the most easily recyclable products and packaging paying a lower rate – plus an import tax on foreign imports that don’t meet the same standards. Recyclable or re-useable products can then be given back to firms for re-use at no further charge, their recycling and delivery funded by the tax.

Taxing the businesses that produce products and packaging which can't be cheaply and safely recycled is the only way to impose a financial cost linked to the cost in terms of peoples' health, lives and environment which will force the worst companies to change their behaviour and allow the better ones, who were already making an effort, to avoid being put out of business by firms who only look at their own costs and profit

We have to act to prevent all the crises - we can't pick and choose which to deal with as if the others don't matter

To get a political climate in which we can deal with the energy and waste crises we first have to avert a second longer and deeper recession in which hunger, poverty and mass unemployment would lead to lots of suffering themselves and could lead to 1930s style politics with the extreme right and/or extreme left gaining support. People who are left scared about whether they can feed themselves and their children and avoid losing their homes will ignore everything else to get those and will be vulnerable to propaganda.

Providing them with some security in the short term has to be the number one priority, but as soon as that’s done we have to start dealing with the energy and waste crises before they lead to disasters just as bad.

(1) = Guardian.co.uk 09 Oct 2011 ‘Third round of quantitative easing possible, says MPC member’,http://www.guardian.co.uk/business/2011/oct/09/third-round-quanititative-easing-possible

Incinerators recycle nothing, cause cancers and birth defects, lose more energy than they produce and waste valuable resources

The Scotgen company claim their planned incinerator at Dovesdale farm in South Lanarkshire will create “green energy” by “recycling” waste (1) – (2). This is part of a UK and worldwide attempt at rebranding incinerators. In fact incinerators recycle nothing, produce less energy than will be required to replace the products they incinerate instead of recycling – and emit many toxins which cause cancers (especially in children) and birth defects in babies.

They incinerate plastics in household waste. Plastics are petroleum products – i.e made from oil  - a finite resource which while run out (and become hugely expensive long before then). So it’s madness to burn them rather than recycle what we won’t be able to replace in the long run. Any energy generated is much less than that required to produce new plastic containers to replace those incinerated – a net energy loss  (3) – (4).

Incinerating plastics also releases carcinogenic toxins such as dioxins, heavy metal particulates and nitrogen oxide for at least 14 miles on the wind. These can be inhaled, causing cancers , especially in children - and birth defects in babies; and can contaminate farmland and water, going into the food chain. Scotgen also incinerate industrial toxic waste, which is even more hazardous. While some of the emissions are caught by filters in incinerator chimney stacks or flues, significant amounts are not – and these are the biggest hazard (5) – (12).

One of many babies born with birth defects in Fallujah, Iraq, thought to be linked to depleted uranium shells, white phosphorus and other chemical weapons employed by Coalition Forces there in the assaults on the city in 2004. Toxins emitted by incinerators can cause similar deformities in babies

Scotgen made the same claims it’s making for Dovesdale for their existing plant at Dumfries which has never generated a single watt of electricity over a year after it opened;  and exceeded it’s emissions limits (including on dioxins and nitrogen oxide) at least 52 times in it’s first 7 months (13) – (15).

The ‘waste to energy’ claims are just a rebranding of incinerators to make them sound green. In fact they are a dangerous, expensive, short-sighted, quick fix for the landfill problem; which may lead to many deaths. Any short term savings compared to recycling are massively offset by the long term costs in overall energy loss to the country, destruction of plastics which won’t be able to be replaced when oil runs out – and will become increasingly expensive long before it runs out entirely – and in illnesses and deaths caused.

Experts on incineration and waste management like Dr Dick Van Steenis, Dr. Paul Connett, Greenpeace and the US Environmental Protection Agency say superior alternatives exist – recycling, legal limits on the amount and type of materials used in making products and packaging; and making producers of products pay for recycling them and their packaging; plus anaerobic digestion of organic waste (16) – (23).

Dr. Dick Van Steenis - an expert on air pollution's effects on health, one of many to condemn incinerators as unsafe and unnecessary

Recycling would also reduce CO2 emissions massively compared to incineration, reducing the climate change problem posed by incinerators (24) – (25). Existing incinerator projects also show taxpayers’ money spent on incinerators is taken out of councils’ recycling budget.

Any politician or company telling you incineration is a better solution for the landfill (or waste managagement) problem than recycling is selling you a short-term quick fix, on the calculation that they’ll have retired by the time all the longer term costs have to be paid; and that they can attribute cancers, birth defects and other illnesses to other or unknown causes.

South Lanarkshire Council’s planning committee ignored around 20,000 objections against Scotgen’s planned Dovesdale Incinerator to approve it by 14 votes to 9. Every Labour councillor on the committee voted for the incinerator. Every SNP councillor on it voted against. (See below for list of councillors voting for and against, their party affiliations and links to contact details for them).

SEPA (the Scottish Environmental Protection Agency) still has to grant Scotgen a licence to run the plant before Scotgen can begin operations. If you want to find out more about the Incinerator and the campaign against it see the Action Group against Dovesdale Incinerator’s website here. There’s a facebook group against the incinerator here

Councillors voting for the incinerator

Jackie Burns (Labour);Pam Clearie (Labour); James Docherty (Labour) ; Edward Mcavoy (Labour) ;Alex Mcinnes (Labour)  Dennis Mckenna (Labour) ;  Mary Mcneil (Labour) ; Graham Scott (Labour) ; Hamish Stewart (Conservative) ; Chris Thompson (Labour) ; Jim Handibode (Labour) ; Hugh Dunsmuir (Labour) ;  Eileen Baxendale (Liberal Democrat) ;  Alex Allison (Conservative)

Councillors voting against the incinerator

Archie Buchanan (SNP) against. Tommy Gilligan (Independent – no party) against.   Ian Gray (SNP) against. Bill Holman (SNP) against. Jim Wardhaugh (SNP) ; Archie Manson (SNP) ; Claire Mcoll (SNP) ; Lesley Mcdonald (SNP)

Councillors on the planning committee but not present on the day of the vote

Patrick Ross-Taylor (Conservative)   Gerry Convery (Labour)

Source notes

 (1) = Carluke Gazette 10 Feb 2011 ‘No peace at Dovesdale’

(2) = Hamilton Advertiser 29 Jul 2010 ‘Scotgen state case for ‘green energy’ waste plant at Dovesdale Farm’,http://www.hamiltonadvertiser.co.uk/news/local-news/lanark-and-carluke-news/2010/07/29/scotgen-state-case-for-green-energy-waste-plant-at-dovesdale-farm-51525-26948218/

(3) = Friends of the Earth September 2007 ‘ Up in Smoke – Why FoE opposes Incineration’,http://www.foe.co.uk/resource/media_briefing/up_in_smoke.pdf (see pages 6 - 7 under sub-heading ‘Recycling saves energy’)

(4) = Friends of the Earth October 2009 ‘Gone to waste – the valuable resources that European Countries bury and burn’, http://www.foe.co.uk/resource/reports/gone_to_waste.pdf

(5) = Parliamentary Office of Science and Technology Post Note 149 December 2000 ‘Incineration of Household Waste’, http://www.parliament.uk/documents/post/pn149.pdf (see especially ‘Pollutants from incineration’ pages 1 – 2 )

(6) =  Allsop et al (2001) ‘Incineration and Human Health’, Greenpeace Research Laboratories & University of Essex, 2001, http://www.cank.org.uk/GreenpeaceHealthReport401.pdf

(7) = Greenpeace background on incineration 30 Nov 2004, http://www.greenpeace.org/international/en/campaigns/toxics/incineration/the-problem/

(8) = Michela et al (2004) ‘Health effects of exposure to-waste incinerator emissions: a review of epidemiological studies’, http://cat.inist.fr/?aModele=afficheN&cpsidt=16117736

(9) = British Medical Journal 22 Jun 2009 ‘Long term exposure to air pollution decreases life expectancy, UK report finds’, http://www.bmj.com/cgi/content/extract/338/jun22_2/b2532

(10) = World Health Organisation 2006 ‘Principles for evaluating health risks in children associated with exposure to chemicals’ http://whqlibdoc.who.int/publications/2006/924157237X_eng.pdf (says in summary (pages 1 -4)  that children are at increased risk from chemicals produced by “unsafe waste disposal”(page 3) at certain stages in their development – and on page 18 that it has been shown that “air pollutants”, “heavy metals” and “POPs” (persistant organic pollutants – which include dioxins) have been shown to lead to an increased incidence of diseases in children.)

(11) = Health Protection Scotland (2009) ‘Incineration of Waste and Reported Human Health Effects’,http://www.documents.hps.scot.nhs.uk/environmental/incineration-and-health/incineration-of-waste-and-reported-human-health-effects.pdf

(12) = Evening Times 28 Jul 2010 ‘Waste incinerator company in emission safety breaches’,http://www.eveningtimes.co.uk/news/waste-incinerator-company-in-emission-safety-breaches-1.1044212 ; ‘The firm wants to spend £50 million on an incinerator that would burn household and industrial waste …It would also handle “hazardous” materials’

(13) = http://www.scotgenltd.co.uk/

(14) =  Hamilton Advertiser 14 Oct 2010 ‘Scotgen facility at Dumfries still to produce electricity – more than a year after opening’ http://www.hamiltonadvertiser.co.uk/news/local-news/hamilton-news/2010/10/14/scotgen-facility-at-dumfries-still-to-produce-electricity-more-than-a-year-after-opening-51525-27465423/

(15) = Evening Times 28 Jul 2010 ‘Waste incinerator company in emission safety breaches’,http://www.eveningtimes.co.uk/news/waste-incinerator-company-in-emission-safety-breaches-1.1044212 ; article says emission breaches included above acceptable levels of nitrogen oxide

(16) = ‘Zero Waste : A Key Move towards an industrial society’ by Paul Connett PhD,http://www.americanhealthstudies.org/zerowaste.pdf

(17) = Yorkshire Post 13 Oct 2010 ‘Incinerator rapped as 19th century’,http://www.yorkshirepost.co.uk/news/around-yorkshire/local-stories/incinerator_rapped_as_19th_century_1_2596265

(18) = This is Gloucestershire 19 May 2010 ‘Professor Paul Connett wades into the Gloucestershire incinerator debate’, http://www.thisisgloucestershire.co.uk/news/Big-Issue-Professor-Paul-Connett-incineration/article-2173050-detail/article.html

(19) = Greenpeace (2001) ‘How to comply with the landfill directive without incineration’,http://www.greenpeace.org.uk/files/pdfs/migrated/MultimediaFiles/Live/FullReport/4478.pdf

(20) = Greenpeace ‘Getting to Zero Waste’, http://www.greenpeace.org.uk/files/pdfs/migrated/MultimediaFiles/Live/FullReport/4383.pdf

(21) = US Environmental Protection Agency 2009 ‘Opportunities to reduce greenhouse gas emissions through materials and land management practices’, http://www.epa.gov/oswer/docs/ghg_land_and_materials_management.pdf

(22) = Global Alliance for Incinerator Alternatives ‘Solutions’, http://www.no-burn.org/article.php?list=type&type=68

(23) = ' Incinerator Deaths ' by Dr. Dick Van Steenis, http://www.countrydoctor.co.uk/precis/precis%20-%20Incinerator%20deaths%20and%20morbidity.htm

(24) = See (3) above

(25) = See (4) above