Rishi's £200 loan is really a sneaky tax

[GreenLunchBox]

So you are not allowed to refuse this 'loan' and from April 2023 everybody's bill will go up by £40 a year regardless of if you received the £200 or not.

twitter.com/MartinSLewis/status/1489584984235065344?t=joBqwQ20p5VPx3EKYUT2tQ&s=19

Some scenarios:

1. A married couple receive the £200 now then split up. In their new houses they each pay back the £200 over the next five years. So it's actually COST the couple £200

2. 5 students in a house share receive the £200 between them (so receive £40 each). They all move out and then each get charged £200 separately over the next five years. Government gets £1000 when they were only given £200.

3. A young person living at home about to move out. They didn't receive the £200 as it went to their parents, but they have to pay an extra £200 on their bill over the next five years

When you scale this up the government are going to make an absolute bloody fortune from this - doubling or quadrupling their money in some cases whilst pretending to be the good guy.
What a racket they're running.

AIBU to say we need to stop this racket?

Jesus, this sounds bonkers. The Tories are positively unhinged.

Interested to hear from the 11% saying I'm being unreasonable. Reveal yourselves please

The scheme does sound bonkers.

How will it be applied if people are on different gas and electricity tariffs? Extra £40 on each? Especially if they're not eligible for the reduction in the first place, that seems particularly unfair.

I might be eligible for it on my electricity bill, as I can choose my supplier, but my gas is via a central supplier for the building and I have no choice, which probably means I won't get the £200 for that. Or is it supposed to be £100 for each gas and electricity and companies divvy it up separately depending if customers are dual-fuel with them or not? Then how is it decided who pays to £40 extra later, as they won't know who got what at the time. I bet it will end up being on all bills so double for electricity and gas.

It sounds so unworkable.

@CaraMocha as I understand it it just applies to electricity

Like furlough and the self employment grants and loans through covid, it's a blunt tool with zero thought as to the detail.

oh I see. Well I suppose that's slightly good news for me at least, if not for other people, as at least I might get it then. But it sounds like my gas bills could rise hugely, with the sort of system we have in the flats, so that bit is less good.

@CorrBlimeyGG

Like furlough and the self employment grants and loans through covid, it's a blunt tool with zero thought as to the detail.

I'm thinking they've thought about it a lot and are rubbing their hands together at the amount of money they will make for them and their mates.

They're basically forcing people to take out a loan with payday type interest rates in some cases

It's nuts and it sounds illegal.
I don't want it so I should be able to opt out.

I think it’s just hideous and I can’t believe we are being forced to accept it.

I hope everyone is writing to their MP telling them how unhappy they are.

How can anyone see this as good news? It's kicking the can down the road. You will still need to pay it back, it does nothing to address the problem.

As usual it's going to be young people coming off worse from this one

The government will only "make a bloody fortune" from it if the number of households increases significantly over the next five years. If the number of households remains the same (and if young people stay living with their parents for cost reasons that may be the case) then it'll be break even.

I grant you it's unfair on people who move to smaller households in the next year - they'll pay for the savings of people who start cohabiting or die.

Yeah its another shit show from our government, i actually dont want the 'loan' either

Poorly thought through like every other thing the government does.

It's clever really. Frightening how easily it's been pushed through.

I absolutely agree with you.

There will be times that the government doesn’t get it back though ie because it’s not really a debt attributed to a specific person, my understanding is if someone dies, it’s not collected?
Also two people currently living alone who move in together would only pay back £200, not £400.

It’s basically £200 to every household, and then £200 from every household even if those households don’t have the same people. So I guess the only extra money paid back will be from new houses. Definitely some individuals will lose out though. I imagine anyone who currently rents where bills are included (maybe students in uni accommodation next academic year, or those in an HMO) won’t see any of the £200 but it will be added to their bills if they move out (ie the students moving into private accommodation in their second year).

I don’t want the loan either. But it appears we have no choice.

Also annoyed as my electric is all ‘renewable’ allegedly.

I’m also wondering why we can’t turn back on/increase our domestic production (I understand if we do we lose green points, but surely that’s better than people choosing between eating and heating).

It should be balanced out by singles coupling up (so only paying once between them) and people who die or emigrate in the 5 years after receiving the money.

@InMySpareTime

It should be balanced out by singles coupling up (so only paying once between them) and people who die or emigrate in the 5 years after receiving the money.

That’s not a lot of use to the individuals who will end up paying more though.

It works both ways though, couple living seperately each get £200 each but only pay back one. People that die or move into a nursing home won’t pay back. As someone said ahead I think it’s just a blunt tool for working it out rather than active way to make money. My fear is that with the £40 being added to hohe standing charge the standing charge will prob never go back now which will be the energy companies getting the money

And having gone up by £40 I doubt it will ever go down by £40.

Basically, it should never have been phrased as a loan.
It should have been described as what it is, spreading the cost of electricity at a population level over the next 5 years, in the hope bills don’t continue to massively increase. It isn’t a loan and it’s ridiculous of them to describe it as such.
Maybe it’s a loan to the energy companies, that they then collect through us ie the government says to them “let every household off £200 this year and we’ll cover it - then charge every household an extra £40 for the next 5 years to pay us back” but it’s definitely not a loan to us.

It'll be interesting how Scotland allocates the money it gets to help with energy bills in Scottish homes.

OFGEM do place restrictions on the standard rates that can be charged for energy, so the energy companies can't just say "oh they're used to paying an extra forty quid, let's just bundle it into the rates".

OFGEM could in theory have ordered the energy companies to have continued to charge the same amount as last year, but that would demonstrably have resulted in companies going bust or leaving the market.