To think tiered electricity prices might work ?

[secrethedgehog]

I saw a suggestion today that a way forward with rising energy prices might be to give every household an allowance ( based on number occupants ?) of x units of energy at a subsidised price. Any units used over that price would then be more expensive, a little more than predicted now, to help finance the reduced price units.
This way the least well off can have at least a minimal amount of heating and power to cook etc without worrying about horrendous bills.
Anyone wanting to use more, and can afford to do so, is then helping to subsidise the price for those less able to pay .
Seems to allow an element of choice whilst encouraging less energy use and therefore having green credentials
Sure there are flaws but seem to be some advantages too ?

How would this work with people who pay rent and bills combined to their landlord?

There's always going to be nuances to a plan like this.
The landlord may have to unfortunately split the bill evenly I guess. It wouldn't be a foolproof plan, just better than others.
Though someone much smarter than me could perhaps offer a solution.

Same way it does now, so long as you're renting legally. You'd have an allowance. Whether you're on your own meter or a shared meter, x units could be paid at basic rate. Your landlord must be paying an agreed rate at the moment. You just may not know what it is.

I think anyone at home all day should be subsidised first. Pensioners, those who can’t work due to disabilities. people with pre school kids etc. if you are choosing to work at home when you could go into work then that’s a no from me. Your work should pay if they want you to work from home or you pay yourself.

I don't see how it changes anything. If LL knows your individual energy consumption, it's straightforward. If he's splitting the bill among a few of you, you may already be paying for other people's higher usage. Or they may be paying for yours. That would keep happening.

What about people living in the far north of England where it is colder than the south coast?

Never mind the 'far north' of England, what about those in Scotland???

I can see several issues. Imagine two equivalent houses. One is privately owned and the owners earn a good salary and have put in double glazing, cavity wall insulation, underfloor insulation, roof insulation, and have installed solar panels and an air source heat pump. Their gas boiler is a modern energy efficient model. The owners regularly move energy suppliers to get a good deal. The house next door is a rental property that has had no energy efficiency improvements and has an old inefficient gas boiler. The tenants are on a prepayment meter. Guess who has the highest bills and yet still has the coldest home? Should they subsidise their better off neighbour's lower energy costs?

There needs to be money spent on improving our old housing stock so that we use less electricity and gas and the cost of green electricity may need to be decoupled from the price of gas. And the government need to think about how they tax property as well as wages.

@Mangledrake I suppose my immediate thought was HMO's where the LL doesn't know whos using what.

If the house/flat etc has a separate meter then the LLwill just pass it on as usual

What we should be doing is heavily subsidising ways for people to make long term savings on their bills.

Free insulation. Significant discounts on new efficient heating systems/ solar panels/double glassing/ energy efficient applicances and lighting and things like e-bikes as alternatives to cars for commuting.

You can either give someone £500 to just spend on power in the short term, or fund the means to save that money through long term reduced bills.

These are more problems that exist already and regardless of this suggestion - but I agree home insulation should be a priority for this government.

Scotland / North England could have a different basic allowance if necessary.

Agree with this, definitely, but I think both schemes would be needed

Wouldnt that be the choice of the person to use less though and therefore not pay the higher price

Nothings perfect but I like this idea

Oh doubtless we need to help people in the short term.

So much more the government can and should do to move people into energy efficiency though, and long term that is the best way to mitigate rising prices.

Why would the energy companies do this?

A standard allowance of cheap rate energy per household could work.
Per household only as it would be far too complicated to increase the cheap rate allowance per person. The admin costs would be horrendous.
There needs to be an incentive to cut usage, I would not be happy to subsidise those people who wash towels after one use or who heat their houses to tropical temperatures

It would have to be imposed (like the price cap) or subsidised (like the rebate) - I doubt they'd do it without government intervention.

But the government should be intervening.

@Christmasiscominghohoho as someone that can sustain this horrendous situation, I think the OP's suggestion is quite a compassionate one, one which could stop people from freezing to death, starving to death or ending their own life.

Why should those that are more healthy financially help those that aren't? It's called kindness, compassion and actually being a fucking human being.

Hope you enjoy your coming Christmas ho ho ho, it's probably one that you need to be really extravagant with, because this country is fucked! We'll be losing businesses galore, the economy is fucked, people aren't going to be able to afford to continue their small independent businesses, house prices will reduce drastically, and hopefully our money will become worthless. It's a fair thing when millions of people are being screwed over and can't even afford to heat their homes. Merry fucking Xmas.

I think you could have more than two tiers without major complicates - look at all the different rates on offer at the moment. But even if this didn't solve everything, it would be an excellent starting point. You could keep mechanisms like warm home payments etc alongside it.

Agree that it's hard to see why we should all suffer consequences of higher demand from people who won't consider reducing exorbitant usage. Give everyone a basic rate to cover essential usage, tweak with rebates and additional payments for those with higher needs, charge the rest at a higher rate

I reckon:
Scrap standing charges at a flat rate.
Instead, standing charges are based on a percentage of usage costs, say 10%

So people using as little as they can, say £100 a month, will pay £10 standing charge.
People using more pay more.

Then, have a means tested energy cost reduction scheme that anyone can claim.
Someone earning 45k whose essential outgoings mean they can't afford energy, they get help just like someone on Universal Credit will.
But, the essentials would have to be quite strict. If someone's ringing up thinking their holiday to Vegas at £3000 counts as an essential, it won't be..
But..
Mortgage / rent, childcare, commute, council tax, insurance, water, food, internet. They'd be counted.
The reduction would be a percentage of their average bill for the last 12 months.

That's what I reckon would work.

A phone line would be needed to administer it, maybe 3. South, Midlands and Scotland. Creating jobs on their local areas.

#voteformoistbandana
#leaderofthetitheadparty

🤪

we earn £50k between us and are in our 40’s. We always seem to be subsiding someone but in reality although that sounds like a good amount of money it only really stretches so far and we will be subsiding more people but never getting any help ourselves.

It’s not this though is it? Those who can afford would also have the same allowance. If they choose to run hot tubs, use the tumble dryer daily etc etc they can but no one is forcing others to do this. We would all benefit from the lower rate if we limited our use.

Even before the money came into it I was always trying to reduce our energy use for environmental reasons. Until fossil fuels are gone lower use should always be encouraged.

100% agree with you.

Unemployed on UC get little more than £70 a week. They will probably be at home a lot more (and using more energy) compared to someone who is out at work all day. How will that work?

And remember - when you put cash back in poorer people's pockets, they spend it - because they need to. That boosts the economy. Low to middle earners will help keep hairdressers and hospitality going locally in the same way. People paying six figures in income tax? They're more likely than the others to stash any gain overseas or tie it up to avoid tax. So if you want a functional society for purely selfish reasons, help the poor

This would help you yourselves - you'd be entitled to basic rate too

It absolutely should not be means tested though. That adds complexity to it that makes the whole thing non viable. You simply can’t look at each household on a case by case basis.

Just have incremental higher rates for energy as we do things like stamp duty.

Those who need extra energy due to medical needs eg needing dialysis or a CPAP machine could get a code that gives them a higher allowance at the lower rate. That would be my only exception to the rule.