Gov't support

savers_united

Dolor said:

The ‘interim’ Chancellor is correct in his assertion that families with incomes well above the present limits for State help will need to be supported. People are going to be hit with high energy bills; high mortgage costs and high food prices. You have to have lived through a period of very high inflation to now how bad it could get for the many not just the few.

My view is that you either support everyone or you limit it to the most vulnerable, I have said that an increase to £600 from the £400 would be my preferred and easiest to implement with the time available, with some groups getting addtional help.

But the biggest problem with all this is circumstances, you are right that many above the current benefit threshold will need support, but it's where you start and stop. A few limited examples here

A couple with no children in a small 2 up 2 down property earning let's say £40k between them before tax/ni. 2 cars, no benefits, decent size mortgage and student loan to pay back, food bill £200pm, They are out all day Mon - Fri. From Oct energy bill £180pm

Family of 4, both parents work, 3 bed semi, earn £60k between them before tax/ni, no benefits, 2 cars needed for work and school runs, need wraparound child care at £200 a month, have a mortgage and quite a bit of other credit on cards / loans totalling £500 a month, food bill £450pm and energy bill from Oct £300pm

A family of 5 living in a 4 bed large property with one parent earning £50k before tax/ni the other stays at home looking after 2 young children and 1 school age. Get no benefits but have a large mortgage and 2 cars on finanace they need to keep on the road, food bill £500pm. From Oct energy bill £400,

A retired couple in their 70s living in a bunglalow, both have private pensions, annual income £30k, no mortgage, no kids at home, lots of savings / investments, already get the non means tested benefits like winter fuel allowances etc,food bill £380pm. From Oct energy bill £350

Plus you have your obvious low income households and those who earn low and get credit top ups. Those should be fairly easy to target but it's those above where it gets more tricky and there would be thousands more examples, with those on higher / lower incomes. 

[Deleted User]

We come back to an absolute Cap with either a Government or commercial loan. Discounts do nothing for inflation whereas an absolute Cap will work through to a lower overall rate of inflation. If it is a commercial loan - underwritten by the Government - then those who use the most energy will pay back more.

High energy prices and high inflation will result in many small and medium businesses going bust, and a massive increase in unemployment. I can remember mortgage rates in excess of 10% and unemployment going up by a factor of 4 in the 70/80s.

Mstty

Looking at wholesale prices and future prices it is not realistic for the price cap to be subsidised back to the April 2021 cap level and we are of the opinion that is just a pipe dream. 

If anyone is seeing this as their saviour we fell they will be very disappointed and should crack on with a plan to get through winter.

sienew

[Deleted User] said:

We come back to an absolute Cap with either a Government or commercial loan. Discounts do nothing for inflation whereas an absolute Cap will work through to a lower overall rate of inflation. If it is a commercial loan - underwritten by the Government - then those who use the most energy will pay back more.

High energy prices and high inflation will result in many small and medium businesses going bust, and a massive increase in unemployment. I can remember mortgage rates in excess of 10% and unemployment going up by a factor of 4 in the 70/80s.

A price cap funded by debt is by far the worst of all options imo.

And the cap won't help businesses as the price cap freeze proposal (or price cap in general) doesn't apply to them.

Trynsave2

sienew said:

[Deleted User] said:

We come back to an absolute Cap with either a Government or commercial loan. Discounts do nothing for inflation whereas an absolute Cap will work through to a lower overall rate of inflation. If it is a commercial loan - underwritten by the Government - then those who use the most energy will pay back more.

High energy prices and high inflation will result in many small and medium businesses going bust, and a massive increase in unemployment. I can remember mortgage rates in excess of 10% and unemployment going up by a factor of 4 in the 70/80s.

A price cap funded by debt is by far the worst of all options imo.

And the cap won't help businesses as the price cap freeze proposal (or price cap in general) doesn't apply to them.

Bailing out of the banks, followed by COVID furlough has changed the public perception on how the Government should react in a crisis. The handing out of cash to temporarily buy our way out of trouble needs to stop for all but the most vulnerable. I'm not even talking about all those on state benefits, many of whom are fit and healthy enough to cope. It's definitely not nice, and I'm speaking as someone who remembers the cold of the winter of discontent with the power on only half the week, but everyone needs to lower expectations of help as well as their energy use. Yes, there are millions households up and down the land that are going to struggle, there are many who need to seriously examine how to raise income if they can't cut bills and there is a smaller, but significant minority who can afford the increase but understandably don't like paying over treble for the same stuff as last year. Personally I would rather see any support directed towards small businesses as they are not covered by the cap and are likely to lose income as customers tighten belts. We don't want to lose employees at the very time the wages they bring home are so needed.

Humans don't like change and the majority object strongly to any enforcement, whether it's good for them or not. The vast majority who say they can't cut consumption are actually saying they don't want to. The planet needs us all to use less energy, just look at recent events in Pakistan. The people affected by the floods really do have it tough and would swap to our homes without heating, tumble dryers and all things requiring chargers in a heartbeat. Like COVID grounded air traffic, this crisis will see a welcome drop in energy consumption and we need to all be mindful that sitting on the sofa under a duvet isn't the worst life to be living.