Weekend press round-up: Rising energy bills may bring ‘civil unrest’

Martin Lewis: ‘When people can’t afford food, they get angry – civil unrest isn’t far away’

Martin Lewis is worried. His entire career, since he became the self-proclaimed Money Saving Expert in 2003, founding the consumer website of the same name, has been framed around one simple, golden rule of financial happiness: get expenditure below income.

Click on the site, which made Lewis’s own fortune in 2012 when he sold it for £87 million (today he is thought to be worth more than £120 million) and there are hundreds of hints and hacks for squaring that vital equation – everything from refinancing your mortgage to bagging a cut-price MOT. In normal times, he reckons, he can save almost anyone hundreds of pounds a year, simply by ditching unwanted gym memberships, switching to cheaper credit cards, or snapping up a bargain SIM card. But these days are different. “The worst since I started,” he says. “The time I’m most scared for people.”

People come up to him in the street to ask his advice, he says, especially now, in the midst of a cost-of-living crisis that has put rocket boosters under his reach and influence and seen him adopted as a people’s financial champion. The head of one think tank even called for him to be appointed Chancellor.

That household finances are uniquely parlous today is saying something, given that exactly two years ago Covid put the nation’s workers on the edge of a financial precipice. But then came the furlough scheme which, for all its many failings and loopholes (about which Lewis campaigned ferociously), kept the show on the road in households up and down the country.

Not this time. This time there is no such dramatic bail out to ease the cost of living crisis and for Lewis, 49, the consequences are clear. “I get all these messages from people tearing their hair out. They don’t know how to make things add up.” Today, he says, rampant inflation affecting food and heating is far outstripping the ability of many people to pay. Expenditure is shooting uncontrollably past income. “For people towards the bottom end, there’s nothing to cut back on. It is not an exaggeration to say that there are people we have to prevent freezing or starving.”

He describes a new feature on the MoneySavingExpert site called “Heat The Human” for those whose homes are now too expensive to warm. “I feel slightly sick about doing it. We are talking hot water bottles in sleeping bags territory,” he says. “This is one of the richest countries in the world. It’s pretty desperate, isn’t it?”

Real inflation, he thinks, will hit 10-12 per cent by October. But for those on lower incomes more affected by rises in fuel and food prices, it will be “nearer 20 per cent”. Because of that impact, the energy price rise is “on a different scale to everything else. It’s a poll tax.”

And like that most notorious levy of 1989, which proved so toxic to a previous Conservative administration, there will be a political price to pay this time too. “The answer is quite simple. You need to get more cash to people to pay their energy bills.” He’s not just talking about the poorest, either. “You have to take it to middle income Britain – people earning £30,000 a year.”

Chancellor Rishi Sunak should, Lewis says, plug all loopholes to ensure that for all such earners half the energy price rise this April is covered, and offer an advance guarantee to do the same ahead of the energy cap being fixed again in October. It would be another vast state intervention, like furlough, “but we just have to get people through this. There is such anxiety and desperation.”

For those who cry “balance the books” he shoots back, “we never balance the books”. States are not like households, he notes, and have far more tools to get round his golden rule of income and expenditure. “We need to keep people fed. We need to keep them warm. If we get this wrong right now, then we get to the point where we start to risk civil unrest. When breadwinners cannot provide, anger brews and civil unrest brews – and I do not think we are very far off.”

His “cover half” advice is therefore no more than a radical solution to defuse a radical situation. He actually wants the Treasury to go further. “I would like to see more. But this is a Conservative government.”

It sounds like a party political intervention. He insists it’s not. “I think a Labour government probably would give more because it’s a different philosophy … it’s for other people to decide which would make a better government.”

Not that he hasn’t, he says, always been political, a campaigner. But to take sides would be a career-ending mistake. “You lose all credibility. And I like that I am free to criticise the Government and the Opposition, to judge them on issues.” That’s why he says, “there’s absolutely no future party political career” (though he does rather fancy the idea of being a Crossbench peer). The confrontational nature of day-to-day politics is also a turn-off, particularly to an entrepreneur for whom learning from mistakes is central to future success.

No doubt that’s why he is happy that it is Rishi Sunak who has to deal with Westminster’s absurdities. Nonetheless, Lewis’s fans (the website has 16 million monthly visitors) say they would love to see him in No 11. Lewis has mixed views on the Chancellor. “I gave him an A for the furlough scheme” – but that was downgraded to a C as the scheme’s kinks emerged. Yet “better than other people in this Government” – he smiles knowingly – “ has a cohesive view”.

That is not the same as not making mistakes. The £200 energy bill deferment, announced in February, is “hideously unpopular” Lewis says. The 5p off fuel duty was “a misjudgment”. “People needed something to cling on to and 5p on fuel is not it.”

The Telegraph

Electric vehicle targets ‘impossible’ without changes to lithium pipeline

Battery manufacturers are confronting a severe lithium shortage, highlighting the need to challenge China’s dominance of raw material supply chains, an Australian lithium producer has warned.

Stuart Crow, chair of Lake Resources, said western companies and governments had failed to build adequate supply chains for lithium, making the sudden boom in electric vehicle manufacturing unsustainable.

“There simply isn’t going to be enough lithium on the face of the planet, regardless of who expands and who delivers, it just won’t be there,” he said. “The carmakers are starting to sense that maybe the battery makers aren’t going to be able to deliver.”

Lithium-ion batteries play a critical role for governments hoping to decarbonise their economies, and the west is working to loosen China’s grip on the lithium supply chain and processing capacity in particular. Disruption from the war in Ukraine and subsequent sanctions imposed on Russia have also underlined the importance of supply security.

Lake Resources’ share price more than doubled in March, giving it a market capitalisation of A$2.5bn (US$1.9bn), after it signed a memorandum of understanding with the Japanese import-export group Hanwa to deliver 25,000 tonnes of lithium carbonate a year. On Monday, the company announced it had signed another non-binding offtake deal with US carmaker Ford.

“Right now China owns basically 70-80 per cent of the entire supply chain for electric vehicles and lithium-ion batteries, and therefore energy storage,” Crow said. “The west has been remarkably slow to adopt a strategy to try and assist and secure a supply chain.”

Daniel Morgan, a mining analyst at investment bank Barrenjoey, said it was “impossible for the targets being made by either carmakers or governments to be met”. He added: “There’s a great love of throwing out lofty targets, but where the rubber hits the road it’s not going to happen.”

Lake Resources, which is listed on the Australian Securities Exchange, is developing a lithium production plant in Argentina. There it will use technology developed by US company Lilac Solutions, backed by Bill Gates, to extract lithium directly from brine, rather than via the more common evaporation method.

It plans to produce 50,000 tonnes of lithium carbonate a year by 2025 and is focused on building supply chains that bypass China. Lake Resources’ plant in Argentina has by itself yet to produce any lithium carbonate, despite having been set up in 2015. Crow said that was a result of the time it takes to develop lithium projects, which carmakers had not adequately factored in when setting their EV production targets.

“The forecasts for the deficit this year vary from 50,000 tonnes per annum out to 400,000 tonnes, on a market that looks potentially to produce 450,000 tonnes a year,” he said. “Anecdotally, we’re hearing stories of two very large battery makers in the market trying to source 150,000 tonnes of lithium hydroxide this year. And with 450,000 tonnes of supply, it’s not going to happen.”

Financial Times

Three-quarters of Britons back expansion of wind power, poll reveals

More than three-quarters of the public are in favour of windfarms being built in the UK. That is the key result of an Opinium poll carried out for the Observer in the wake of publication of the government’s controversial energy security plans last week.

Ministers backed nuclear power but shunned new onshore wind plants as the main means for protecting the UK against future energy crises. But the new poll indicates Tory voters’ backing for wind turbines almost matches that of Labour and Lib Dem supporters – suggesting the move against onshore wind, a result of backbench Conservative pressure, runs counter to the views of the party’s own voters.

In the Opinium poll, 79% of Tory voters said they were strongly or somewhat in favour of windfarms being installed in the UK, compared with 83% of Labour voters and 88% of Lib Dems. Two-thirds of all voters said they would be happy for a windfarm to be built near them.

By contrast, only 46% of all voters favoured new nuclear power stations in principle, while a mere 32% favoured gas power plants. Less than a third of voters would be happy with a nuclear power station being built near them, while less than a quarter would approve of having a gas power station in their neighbourhood.

These findings suggest that government thinking is at some distance from the public’s perception of the need to ensure energy security while still working to achieve net zero emissions. It is also at odds with warnings from experts who say reliance on atomic power raises key concerns for the nation. They point out that the country’s next nuclear plant, Hinkley Point C, currently under construction in Somerset, was supposed to start generating electricity in 2017 but will not do so until 2026 because of delays that have raised the station’s cost from £16bn to £23bn.

“Instead of this wasteful nuclear plan, the government should invest in onshore wind to help lower people’s bills now,” said the Liberal Democrat leader, Ed Davey. “Safely storing nuclear waste is also expensive, complicated and controversial.”

However, former Tory energy minister Charles Hendry – who now advises the energy industry – said he was pleased the government had committed to more nuclear but doubted whether the funding model for building new plants would attract enough private sector interest. The government needed to address whether it should take on the entire funding of the building of the plants, he said. “That happens in almost every other country in the world. Then if it chooses to, when they are built, it can sell them off to the private sector. That is the most assured way of getting the investment which is necessary and the partnerships which are necessary.”

The Observer

Eon rules out German nuclear power plant extension

Eon has ruled out extending the life of its nuclear power plant in Germany, even as Europe’s largest economy prepares for the rationing of energy supplies and to wean itself off Russian hydrocarbons.

“There is no future for nuclear in Germany, period,” said chief executive Leo Birnbaum. “It is too emotional. There will be no change in legislation and opinion.”

Eon, which is Germany’s biggest energy company, runs one of the three remaining nuclear sites in the country, near Munich. The Isar 2 plant is due to go offline by the end of the year as part of the country’s longstanding phaseout of nuclear power production put in place after the 2011 Fukushima disaster in Japan.

Russia’s invasion of Ukraine in February seemed initially to prompt a rethink in Berlin, with Green economics minister Robert Habeck saying he would not stand in the way on ideological grounds of any decision to keep nuclear power plants running for longer.

But this option was soon ruled out, a decision Birnbaum said Eon was happy to accept. While Isar 2 could “technically” be kept operational beyond this year, “the judgment which was really done is we have a gas emergency situation and the little relief we might be getting on the electricity side is just not really a game changer”, he said.

“There was a really serious discussion with the government,” he added. “They made a decent trade-off decision, which we can understand, and therefore the story for us is over.”

The German government has been rushing to secure alternative energy supplies as part of its long-term goal to reduce its dependence on Russian fuel. Habeck recently signed deals with Qatar for the supply of natural gas and with the UAE for green hydrogen.

Berlin last week activated the first step of an emergency plan that in the event of a gas shortage would eventually lead to gas supplies to large corporations being curtailed.

Financial Times

Extinction Rebellion protests block Vauxhall and Lambeth bridges

Extinction Rebellion climate change activists have staged protests in the centre of London for a second day, blocking Vauxhall and Lambeth bridges.

Hundreds of protesters prevented cars and buses crossing but ambulances were let through.

The Met Police said 38 arrests were made on Sunday and officers had now moved protesters from the bridges.

Green Party MP Caroline Lucas earlier told the BBC the group’s protests could sometimes be counterproductive.

But for some people, the rallies were the only way they felt heard, she said. The government has yet to comment.

During the earlier protests, campaigners sat in the road, waving flags and placards.

They were told by police officers there was evidence they were causing “serious disruption” to the public, warning them to leave or face arrest.

The Met said it imposed conditions under section 14 of the Public Order Act 1986 to clear protesters from around Vauxhall Bridge and officers physically removed the last of the activists – with a number being taken away in police vans.

Health professionals were among protesters blocking Lambeth Bridge

Doctors and nurses from a small group of medical workers who refused to leave Lambeth Bridge were among those arrested, Extinction Rebellion tweeted.

Earlier, one of the protesters – Kiri Ley, 21, a student from Birmingham – said the aim was to occupy the capital peacefully to try to force policy changes.

She said: “We tried all the other methods – we’ve written letters, we’ve marched, we’ve spoken to our MPs, we’ve done literally everything we can and time and time again we see them doing completely the opposite of what the scientific evidence says and this is what is left to us, really, we do it because we know it works.”

BBC News

SNP’s energy-efficiency pilot ‘left households out of pocket’

A scheme to help people cut energy bills by upgrading their homes has been marred by delays and branded overly complicated by homeowners.

The Scottish government piloted loaning homeowners up to £40,000 against the value of their property to install insulation, heat pumps, double glazing, new doors and low-energy lighting to ease the cost-of-living crisis.

An assessment of the programme found lawyers baffled by confusing contracts and people having to pay out of their own pocket to make sure work could be completed.

More than half of the 38 homeowners who were interviewed said the process took too long while there were also complaints about the government’s externally contracted lawyers, poor communication and lengthy waits for action. One person said they would be guaranteed additional money through the loan for “a wee bit extra work” but were then left having to pay themselves.

The homeowner, who received the loan in March 2019, said: “We had to then go and find that money to pay more lawyer fees, which we didn’t know about . . . it was extra lawyers’ fees . . . and the Scottish government only paid for the initial paperwork. And I tried to contact that guy umpteen times, and he just stopped calling me back.”

Another householder, who obtained the money in October 2020, added: “We had to get a solicitor to read over the paperwork. And we had to shell out quite a bit of money as well because she had to spend hours on the paperwork.

“She said she’d never seen an agreement like it in all her working days. She said it’s more akin to a multimillion-pound loan or something when the loan was actually for like £5,000 . . . So it was incredibly complex and I couldn’t understand a lot of it, to be honest.”

Under the scheme, the loan, which is available for properties in the council tax bands A to C, or where the owner receives qualifying benefits, must be repaid in full when the home is sold or ownership is transferred. The pilot scheme operated in Argyll & Bute, Dundee, Glasgow, Inverclyde, Perth & Kinross, Renfrewshire, Stirling and Western Isles. As of November 1 last year, 136 loans had been offered, with an average loan value of £18,382.

The report concluded that a “small” unspecified number of households were hit by delays that meant work had to be completed in poorer weather conditions, pushing up costs and causing stress. One participant said they paid the additional costs of building materials out of their own pocket after the price increased because of the time lapse between being given a quote and work being able to start.

The Times