Meanwhile....energy bills and the cost of living crisis

[cakeorwine]

Announced yesterday - a freezing of the unit price of energy (for 2 years) for households and 4 months for businesses. Paid for by borrowing.

Unit price to be announced soon

4 months for business is not a long time. And the price of gas is not going down

There is also high inflation affecting fuel and food prices.

I hope the Queen's passing does not distract people from this real issue - which is only a few weeks away

It'd be really challenging though to target those who need adidtional help beyond how they have already (those receiving additional payments will rightfully still get them to help). Some people on fairly decent wages will have cut their cloth accordingly but now be struggling, those who are super wealthy and won't be feeling the pinch will be in the minority.

Its not the OP, its the Government and the regulator... If someone says "i will cap the the price of the 4 tyres i'll fit to your car to £400" .. what would most people think?
£400 is the max i will pay for 4 new tyres.

Its deliberate use of language to confuse and allow folk to think the Govt/regulator is on their side... whilst also giving the authorities a way out to charge far more.

Just set the cost per unit at x for average consumption, that unit cost could be lower than the price freeze cap with the money saved - then market rate above that.
Caveats for exceptional cases, disabled & other genuine hi users.

It would also encourage lower use, its not my idea, its Germany's, they are having to borrow less too.

Agree, higher earners often have higher outgoings, esp mortgage costs.

This is the modus operandi of recent conservative governments. They faff about ineffectually with minor issues such as a few dozen vibrant, energetic young people crossing the English Channel, returning to imperial units of measurement, covering up their corruption and lies and having endless photos taken while economists, scientists, mayors, charitable organisations etc desperately cry for help and suggest sensible, workable measures. Finally at the eleventh hour, when thousands and thousands of people are sick with worry they slap out a crude, eye-wateringly expensive plaster on the problem.

Their response to covid was the same. Having previously ignored pandemic planning they downgraded covid as a threat and reduced testing in February 2020, didn't update their models, which were clearly two weeks out of date, frittered away a ton of taxpayers money on illegally awarded contracts for expensive and ineffective PPE and Nightingale hospitals. Then hastily set up the blanket furlough scheme with little scope to guard against fraud, and nothing for freelancers who didn't have enough years of tax returns. The. The east out to help out scheme....

And Brexit. Remember how the negotiators were met with incredulity at their lack of detail and organisation? Queues at Dover, unworkable endless paperwork for businesses: these were predicted.

They could have capped only the first percentage of household energy costs and left excess use at the current rate to discourage excessive energy consumption even by more well off households (obviously use of medical equipment in homes and extra heating for vulnerable people would be exempt). They could have levvied an extra windfall tax to cover some of the cost and used it to help fund energy efficiency measures such as insulation, triple glazing, solar panels, heat pumps etc.

But no. They chose to keep big businesses and their shareholders happy at the expense of taxpayers in the most expensive possible way with no plan for paying it back that they'll admit to while they gad about in private planes and petrol cars while they impose more and more authoritarian laws that reduce the independence of the electoral commission, reduce the right to protest, make it harder for journalists to criticise the government and allow privatised water companies to pump sewage onto our beaches. Next on their list is reducing workers rights.

@ancientgran the problem with this solution is that many poorer people will have greater energy needs than wealthier people as richer people can afford to insulate their homes, buy double/triple glazing, buy energy efficient appliances, buy solar panels and batteries and generally do things that reduce their energy consumption.
I have solar panels and a battery, have made my formerly leaky Victorian house much more energy efficient, have a super insulated extension but I'm under no illusions that my lower consumption is because I could afford to pay up front and save over time.

The main driver of your energy costs is how big your house is and how many people live in it.

High costs could therefore apply to the rich and poor equally.

I'm a high earner but my one wage supports 8 people and out bills are high. There's no fair way to account for that so the help will have to be a blunt tool

It is still twice the cost of last year - unless you received cash payment which bridges the gap for an average user.

Usage will fall due to this.

Yes they will! It will still be bloody expensive just not as ridiculously high as expected. No one is going to look at their energy bill this winter and think ooh look that's really affordable, not unless they reduce their energy consumption.

The energy companies aren't benefiting. If they weren't being given taxpayer money, they'd be getting consumers money. They aren't getting money for nothing, they're getting money for energy.

The winners in this scheme are people on below average incomes, who will receive more subsidy than they pay back through tax. The losers are people who pay more than an average amount of tax.

Yes it’s odd how people are framing this

The benefit is to us as we get lower bills. We’re not paying the real rate but getting a subsidy

People won't be encouraged to reduce their use of gas - which is a problem when there is a limited supply of gas.

This was my objection to this type of scheme. I wanted them to pay a flat amount of cash into each electricity account, and still have electricity and gas at market prices, so people had a big incentive to economise. But in fairness, prices are still going to be historically high, so people do still have a higher than ever incentive to economise. And I suppose this scheme does also help business, and help keep down the general level of inflation.

(Actually I'm not sure about business, I forgot their rates could be different.)

It's only a few weeks to go to the new price cap.

I hope that stuff is being fleshed out on this. The Bank of England delayed announcing interest rate changes.

Inflation is still high. Food is getting expensive. Petrol is high.

But we have paused this discussion

Thats not really true.

With no help, the well off would easily afford a 3 or 4k increase, meanwhile at the bottom end (around 8m households) people wouldn't be able to pay, the energy companies wouldn't be getting their money, the courts would be overwhelmed & hardly anyone forced to have a key meter.

So, the price cap is of huge benefit to the energy companies.

Also, whilst the low paid (thats anyone under 30k) pay less income tax, they still pay a host of other taxes, far more than the wealthy in proportion to income & we'll all be paying for this stupid catch all policy for decades to come.