Why will mansion owners get over £20k gift in energy bill reductions when typical households get around £1.5k?

[Malthus123]

I am sorry but I just don't understand,

I've done some maths on it (happy to share if anyone wants) and the 2-year govt. energy price guarantee could result in around £12bn going to the 2.8m UK households earning over £91k per year. £4bn will go to the top 1% of energy users, this will include mansions with heated pools!

My energy bill is going through the roof, over 2m people had to use foodbanks last year. But at the same time, the wealthiest in the UK are getting unnecessary government-funded energy bill subsidies to top up their bank accounts???

£12bn could give £4,200 to each of the poorest 2.8m households, feeding kids and heating homes.

Am I living in some sort of dystopian fantasy world? How do we stop this!!

I'm sure there are. Palaces for a start. Places with pools, saunas, outbuildings, floodlights. Seems very plausible

Thank you.

Sorry, was reply to this

I'm sure there are. Palaces for a start. Places with pools, saunas, outbuildings, floodlights. Seems very plausible

Define 'mansion'

Your 5 bed house costs that much to heat???

Do you have all the windows open all the time???

Nope sorry Ahbisto, I have worked in the energy and sustainability industry for 20 years in analytical roles to a national level, I can assure you my assumptions are quite accurate.

@MintJulia By mansion I mean one of the 30,000 UK homes that use over 56,000kWhs a year of gas (Top 0.13%) and the 38,000 UK homes that use over 23,000kWh of electricity (Top 0.16%)

From the govt's own data:
The top 1% of gas-using homes consume over 38,000kWh per yr (226k homes)
The top 1% of electricity-using homes consume over 15,000kWh per yr (257k Homes)

Bigger and luxurious house than most, on its own grounds. Like OP I'd assume many of the biggest users of gas and electricity inhabit such homes. Even if they didn't, her main point is absolutely right. The biggest spenders on power will receive the largest subsidies.

@ThatGirlInACountrySong See the above message to ahbisto

So you have no idea what kind of homes these are other than being domestic, how many people they house or what the electricity is used for.

I'd say you need some more information before you build the outrage.

Well assuming they are households, domestic - so not hospitals, old peoples' homes etc - what's more likely than that they are very wealthy people spending lots of money?

The OP's logic is bang on. We are obviously subsidising big spenders. You can quibble about thresholds and exceptions, but the system is designed to pay out most to those who spend most.

@StillNotWarm , @Mangledrake is right, there really are homes that use this much.
From the govt's own data:

30,000 UK homes use over 56,000kWhs a year of gas (Top 0.13%)
38,000 UK homes use over 23,000kWh of electricity (Top 0.16%)

1% of gas-using homes consume over 38,000kWh per yr (226k homes)
1% of electricity-using homes consume over 15,000kWh per yr (257k Homes)

At the original Oct 1st cap rates of 15p per unit gas and 52p per unit elec, each year the top 1% of homes would spend:
15p x 38,000kWh x 226,000 homes = £1.29bn on gas (over £5,700 per home)
52p x 15,000kWh x 257,000 homes = £2bn on elec (over £7,500 per home)

The new cap is for 2 years at 10.3p for gas and 34p for elec. Gas and elec prices were set to go higher than the Oct cap. These huge energy users are getting a massive handout.

The top 10% of households earn over £91k per year, and just do not need this sort of handout. They could save by buying solar panels and batteries. Over £4,000 per home could then be used to fund the poorest 10% to insulate their homes or buy solar. 2m people had to visit foodbanks last year!

Take these three examples from u-switch if you like - ultra wealthy's estimated bills from June 2021. And that's just one year's worth. If that would now cost far more without the cap, we are paying the difference.

www.uswitch.com/gas-electricity/news/2021/06/10/footballers-homes/

It's why I hate Lizzie's policy here there should be a standard rebate at best like the 400 one sunnak gave out. The highest users are getting the biggest subsidy and those that invest in energy efficiency are being penalised for doing so.

Agree.
Well done OP, amazing work. Would be great if the papers picked this up rather than combing the site for trashy gossip.

Yes @FreddyHG

Take example of Kyle Walker from that article. Estimate based on his mansion size and facilities. By my back of envelope calculations, based on cap and cost, we'll now pay him 40 000 in subsidies over the two years. He could earn that for himself in two days.

He's one of thirteen examples on that page. They'll pull in over half a million between them in subsidies over the two years, I think - does that seem correct to you @Malthus123 ? And they're not the only 13 rich men in the country ...

England defender Kyle Walker has the highest energy bills of his fellow Three Lions, paying about £16,200 per year [in 2021] to power his six-bedroom home. Hardly surprising when you consider the £3 million property includes a swimming pool with its own waterfall, as well as a football-themed games room, giant fish tank and large hot tub.

While the Manchester City star's energy bills are around 15 times more expensive than the average household's £1,125 annual energy costs, it's all in (just over) a day's work – which is how long it would take Walker to earn the cost of his bills on his £110,000 weekly salary.

Absolutely - brilliant work

These people have probably paid as much in deductions as I earn
they contribute massively so why shouldn’t they benefit from a system they pay into

They do benefit, all the time - same entitlement to goods and services as all of us. Nice little tax cut coming their way too. Nobody's trying to cheat them out of anything. They really don't need this large subsidy though, do they? Cap on subsidies would be sensible.

@MintJulia and thanks @Mangledrake , yes these are domestic homes not care homes, hospitals or any other sort of non-domestic property.

Look we all know there are tens of thousands of giant properties owned by very wealthy people, hundreds in every town and city in the county.

These will each get a lottery win sized gift from the govt. a subsidy that would be life changing to some one on minimum wage, but probably just add to Tarquins trust fund for those already well off.

I am sure there are exceptions too where wealthy people who dont need subsidies live in small efficient homes and some cases where a large extended family with a low combined household income lives in a single big house.

But these exceptions are just that. This untargeted cut will gift billions of cash to wealthy households, while poor households are still having to feed their kids from foodbanks.

Having done the maths, it is possible that the top 10% income households will actually get £8bn MORE over 2 years than the bottom 10%, because the rich tend to use more energy.

Taking 40% instead of 45% on the top chunk of there earnings there still paying a higher rate of tax than the majority of us

I've pulled this out of my spreadsheet :)

Thanks @napody and @Mangledrake :)) When I get angry I do maths to prove why I am so angry, but then that makes me angrier so I do more maths :)) Though seriously, I agree that this needs to be better published. It is shocking!

This was always the problem with this broad brush means of dealing with the energy price crisis: incurring huge amounts of government debt in order to subsidise Rishi Sunak running his swimming pool and Nadim Zahawi heating his stables.

I do think Labour missed a trick by calling for a simple cap with no limit to how much subsidy an individual can receive, because it limits their ability to attack the policy now. As a somewhat cynical political thinker, if I'd been in charge of Labour's planning I'd have called for a system with a (generous) upper subsidy limit per household safe in the knowledge that I wouldn't have to design and implement the details and then go hard on the "why are we paying to heat Rishi's swimming pool" factor.

Yes I know someone who was going to stop heating their pool because of the cost over the winter. They've kindly told me that they've changed their mind since the cap was announced. So the taxpayer is now subsidising their heated bloody pool. Great.

@newstart1234 perfect example of the madness. Not only giving money where it's not needed, but undermining most of the govs. climate change policy too. Failing in the energy, cost of living and climate crises in one go! Making life worse for this and future generations.