Government intervention on price for households to cost between £72 billion and £140 billion

[cakeorwine]

And that's just the household, not the business intervention.

It is great that we have certainty ..and we don't know the price of gas as it could easily go up (or down)

I don't understand why the Government doesn't take steps to encourage people (and businesses) to reduce their usage. There will be people who have no problem or who use energy on things that maybe aren't necessary. There are also people who can't afford energy at the price it is.

We need to ration our use. Rationing will hopefully have an effect on the overall cost of the intervention which we, and future generations, will pay for.

AIBU to think the Government should encourage people and businesses to reduce their usage so as to reduce the cost of the intervention and to ensure that there is enough gas to 'go around'?

Link

www.theguardian.com/business/2022/oct/05/uk-price-cap-on-household-energy-bills-expected-to-cost-89bn

I don't understand why there isn't focus on a tiered tariff system. There would be initial costs but they could be shared across providers and not by tax payer.

I think most people will, its clear that the interventions are still leaving prices markedly higher than they were. There are a small number though who as the prices get higher and higher think fuck it I am going to use what I want and not worry about paying (won't end well for them though). The more prudent thing would probably be to raise benefits and public sector wages (they can't control private) in line with inflation- including address real term pay cuts for public sector staff over the past decade or so, so people have a chance at being able to afford bills. This is a sticking plaster at best. I do like I think it's Germany who are charging x amount for units under y and then higher prices per unit beyond that to discourage high use

I do like I think it's Germany who are charging x amount for units under y and then higher prices per unit beyond that to discourage high use
I do too. The new price cap is just subsidising rich high people with high energy usage whole the poor with lower usage are still struggling to pay. Prices should encourage anyone who can afford to to improve the energy efficiency of their homes.

Who’s using massive excess amounts anyway? We’ve never been a put the heating on household and we’re not the only ones. My grandparents still have a peat fire and so do a lot of the oldies. I already make up my bottles in advance for the day and night so not boiling the kettle all the time, I’ve bought a heat pump tumble and I’m doing 2/3 loads a day compared to 4 or more before. I don’t watch telly unless there’s something I’m really interested in which isn’t often. Ok so the kids play computer games at night sometimes but our internets slow so not a lot the baby has a mains swing she goes in but fuck paying for 4 D batteries every few days and the rechargeable are more expensive and don’t last anywhere near as long and use lecky to charge them. We use lamps not big lights, we don’t leave them on, we have a bath not a shower what the fuck else will we cut down?

How about looking at these greedy bastards creaming it in while we are only washing once or twice a week? While we’re holding off making our baby a bottle till the next batch is done in the miltons so we can do them all together? I don’t know anyone swimming in lec tbh. Maybe because I grew up in a time when petrol and diesel gennis were used when we got power cuts for hours or longer but nobody here wastes lecky and never had done

I mean they'll still pay more if they use more won't they so people with excessive usage still will be paying for every unit they use, just each unit will be controlled at the capped price. I do agree though charging more for excessive is fairer but knowing how the government implement things here would probably somehow ended up costing us all more somehow!

Poor people are rationing their usage already. They're turning off fridges, cooking kettle meals, not having any heating on. What else do you expect them to do?

To be fair, OP clearly isn't talking about people who are already turning their fridges off. She means people who can afford energy at the capped rate and who could also bring their usage down.

I agree OP, especially with the stories in the past few days about potential shortages this winter.

Many people are reducing their usage. Because they can't afford the increased price.

I am talking about people who can

a) afford increased prices

AND

b) Don't worry too much about heating their swimming pool, their powerful gadgets, devices that use a lot of energy and aren't really needed.

There is a limited amount of gas.

Surely we should be ensuring that those who need it can afford it and that we ensure that there is enough to go around, as all we are doing is subsidising the prices whilst not rationing it out.

Think of it as petrol.

The price of petrol would be shooting up due to a low supply.
The Government is subsidising the cost of petrol .
People who are poor would struggle to pay at this increased price.
People who have lots of money could afford to pay and could afford to do long, unneeded journeys.
This reduces the availability of petrol, increases the cost to the taxpayer.

So how would you get those people who do 'long / unneeded' journeys to reduce their usage so people who need the petrol could get it and afford it?

I do like the tiered system. Obviously there are issues and it can be household dependant.

Just look at all the people on here who think you live in the dark ages if you don't have a tumble dryer and a dishwasher. The people who wash their towels after every use at 60c. The people who tumble dry everything. The people who leave their heating on the thermostat overnight to heat their house at 3am when everyone is tucked up warm in bed.

I don't think people are all sitting there in their vest and pants with the heating up to 30c every day. I just think most people are clueless about how much they actually use.

The current 2 year policy is total madness.

Putting the country into huge debt so the better off get subsidised energy, yet at the same time, the less well off, face a doubling in energy costs.

I've long argued for a tiered system and energy conservation after reading what Germany is doing to protect consumers and at 1/2 the cost of the UK scheme..... for the UK, part nationalising NS production is an obvious solution.

Even if the Ukrainians win and push Russia out, sanctions on Russia wont drop, Russia may even have an even harder line President and no gas into Europe, so prices stay super high.

What are we going to do? borrow another 100 billion?

Once again, no long term thinking.

Yes, the gov't has missed a trick on this. They should have introduced a tiered price system - massively subsidised for the first amount, actual prices for the second amount, with a penalty rate for high usage above that.

BUT obviously the energy providers can't tell the difference between someone heating their swimming pool and someone who has to keep the heating on to support a vulnerable person in the household. So I suspect it was filed under the "too difficult" pile.

OP its not just gas, it's electricity too (the prices are linked). And much as we may think the energy suppliers are raking it in, they're actually struggling (ha ha!). The people making a mint on the high prices are the speculative traders.

so the better off get subsidised energy, yet at the same time, the less well off, face a doubling in energy costs.

What do you mean by this? The cap isn't £2500 and no one will pay over that, it's the cost for an average household after units have been capped. People using less energy still benefit from the lower unit price.

The unit cost has more than doubled, the £400 payment runs out soon and no plans to have another one.

How is a doubling+ in the unit cost a "benefit"?

What that seems to be saying is the well off can continue to have nice warm homes but the only way the less well off can cope is to be cold, people struggling with a bill of 1200 last year will have already been economising, how much more can they be expected to cut back, whilst the taxes they pay also subsidise the bills of the well off.

...and again, what happens in Winter/Spring 2025?

Well yes but prices are spiralling globally, I agree it's unfair that some will struggle more than others as has always been the case, but without this intervention the prices would be astronomical. Doubling per unit price is actually pretty good going considering. Everyone is getting subsidised energy.

Also people on high wages also pay tax so not sure of the argument there really. I agree life is unfair, I agree the growing disparity in wages in unfair, I agree that those responsible for spiralling costs (along with the human lives lost of the war) are unfair, I agree that its crazy sad and unjust that in such a wealthy country we have people struggling to afford basics; but I don't think turning against eachother is helpful.

Well yes but prices are spiralling globally, I agree it's unfair that some will struggle more than others as has always been the case, but without this intervention the prices would be astronomical.

I agree an intervention was necessary but the wholesale gas trend is down significantly this last month, from a peak of 788p/therm at the end of August to 297p /therm today.

For people complaining about subsidising higher earners, what do think the tax system is??

Higher earners subsidise everyone else through the payment of taxes. Higher earners will be paying the bulk of the government debt related to the cost of the price cap. No one seems to think this is unfair, do they?

Why should higher earners pay more twice? Once at the point of use and again at the point that this all has to be paid for.

Higher earners subsidise everyone else through the payment of taxes. Higher earners will be paying the bulk of the government debt related to the cost of the price cap. No one seems to think this is unfair, do they?
Lower earners subsidise their employers as they are consistently underpaid for the important work they do. This enables others to be overpaid. The tax system is a way to try to make it a bit fairer.