Gov't support

savers_united

MattMattMattUK said:

KxMx said:

I'm not pretending to have the answers,  but the situation is running out of control now,  we've gone from a situation where the poorest can't afford the increases,  to where most households will struggle with the costs, even when making cutbacks elsewhere.

Small businesses are being particularly impacted.

It might sound callous, but the economic consequences of more than £100 billion a year being sucked out of the economy by energy bills are actually going to be far worse than people being cold over the winter. The majority, perhaps the vast majority of households will be able to pay the increased costs, but they will do so by reducing spending elsewhere, which will likely deepen and extend the already predicted (and likely already in the start of) recession, that will further reduce employment and tax revenues, which will increase borrowing and reduce the ability of the state to help people. 

If you look at the amounts of money that are already in the process of, or are scheduled to be distributed there is no reason for people to freeze to death this winter, though there are plenty who will have a cold and uncomfortable winter. There is no easy way out of this situation, if there was it would have already been taken, a drop in living standards for most is certain, a reduction in indoor temperature for most is certain, however it is not the end of the world.

Thing with rising energy costs there are no escaping them, everyone gets hit. 
There are those who will ride this out, but even those will cut back somewhere.

Its different when your having a one off holiday, or buying a new car, but with energy you have nothing really to show for the extra thousands you are spending, but it's unavoidable.and no one knows where it will all end. 

So people will need to cut back, if that for some is no more takeaways, for others no more meals out, no more visits to the cinema, local pub, less spend at Christmas. Whatever people do to save money will have an economic impact. 

Small businesses are particularly vulnerable due to their own rising costs coupled with a fall in consumer spending. 
It will be your coffee shops, cookie sellers, doughnuts stores the types of places that have done well during Covid when people wanted a bit of a lift, had a bit of spare cash and have been working from home. 

I have been guilty of it, spending £10 on 4 doughnuts at lunch time and there have been queues out the door, I just don't see that being case this winter. 

Trynsave2

The 'go on, treat yourself, you're worth it' type businesses are going to be really suffering soon. However, wasn't it not that long ago that we were being told that millions of pounds savings had been accrued in UK bank accounts thanks to COVID? Whilst I'm not so ignorant to believe that the poorest in society have wads of £20 notes stuffed under the bed, how can we have moved from lots have managed to save to no-one can afford to turn the heating on? Either all that money has been squandered in a relatively short space of time or more people have more resilience to cope with these rising costs than the media and charity voices would lead us to believe.

CKhalvashi

Trynsave2 said:

The 'go on, treat yourself, you're worth it' type businesses are going to be really suffering soon. However, wasn't it not that long ago that we were being told that millions of pounds savings had been accrued in UK bank accounts thanks to COVID? Whilst I'm not so ignorant to believe that the poorest in society have wads of £20 notes stuffed under the bed, how can we have moved from lots have managed to save to no-one can afford to turn the heating on? Either all that money has been squandered in a relatively short space of time or more people have more resilience to cope with these rising costs than the media and charity voices would lead us to believe.

Probably because they will be people at completely opposite ends of the scale.

We suffered a huge loss in income due to the pandemic (OH works in aviation, I own a business focused on leisure but not quite 'oh go on, treat yourself' in terms of customer base).

OH can't legally work as much as the company would like the last months, I have suffered several major setbacks but currently am getting back to pre-pandemic levels of business although that income is structured very differently and we are likely at best to make less than half the profit of 2019 on around 80% of the revenue. This would have been around 95% of revenue and 110%-ish of the profit if it wasn't for the actions of one man so the problems haven't yet gone away and we still don't know how much we will salvage next year.

The_Green_Hornet

As the government based their cost of living support on the original Ofgem prediction of £2800 back in May should we expect a further £749 now that the actual figure is £3,549?

I know it a simplistic calculation but then politicians don't tend to do sophisticated.

Sea_Shell

The_Green_Hornet said:

As the government based their cost of living support on the original Ofgem prediction of £2800 back in May should we expect a further £749 now that the actual figure is £3,549?

I know it a simplistic calculation but then politicians don't tend to do sophisticated.

What would they have announced then, if they knew then, that the cap was going to be this high?

The_Green_Hornet

Sea_Shell said:

The_Green_Hornet said:

As the government based their cost of living support on the original Ofgem prediction of £2800 back in May should we expect a further £749 now that the actual figure is £3,549?

I know it a simplistic calculation but then politicians don't tend to do sophisticated.

What would they have announced then, if they knew then, that the cap was going to be this high?

That is indeed the question. I suppose we will have to wait until Ms Truss is crowned the new PM to see what the government is going to do.

sienew

The_Green_Hornet said:

As the government based their cost of living support on the original Ofgem prediction of £2800 back in May should we expect a further £749 now that the actual figure is £3,549?

I know it a simplistic calculation but then politicians don't tend to do sophisticated.

I'd imagine both candidates would want to "share" the cost of the increase with us. So if the increase is £750 maybe they'd want us to find half ourselves. If I had to guess the £66/month will be increased to £100 a month with further support for those on specific benefits/pensioners.

[Deleted User]

The_Green_Hornet said:

As the government based their cost of living support on the original Ofgem prediction of £2800 back in May should we expect a further £749 now that the actual figure is £3,549?

I know it a simplistic calculation but then politicians don't tend to do sophisticated.

No, we really shouldn't expect anything like that at all.

You might hope for it, or wish for it, but expecting it seems like a very silly idea given what we know of the government.

The_Green_Hornet

[Deleted User] said:

The_Green_Hornet said:

As the government based their cost of living support on the original Ofgem prediction of £2800 back in May should we expect a further £749 now that the actual figure is £3,549?

I know it a simplistic calculation but then politicians don't tend to do sophisticated.

No, we really shouldn't expect anything like that at all.

You might hope for it, or wish for it, but expecting it seems like a very silly idea given what we know of the government.

Personally, I am not hoping or wishing for anything but I do expect that this government will splash some more cash.

[Deleted User]

With respect, people are looking at this problem in isolation. There is a cascade effect: higher energy prices lead to higher inflation; higher food prices; business failures, and high unemployment. The cost of Government goes up and unless taxes are increased, there is less money for public services.

Trust me, it will not just be the old and vulnerable that will suffer if the Government fails to get inflation under control. For example, you will see millions of young working couples with children struggling to pay their bills. Homeowners ending up in negative equity and so on.

Handouts to help people pay bills will do nothing for inflation. This is why other countries are electing to cap prices: albeit, at considerable cost. If the Cap is at ‘£X’ today and ‘£X’ in 12 months time, a great chunk of inflation goes away. Trust me, the pain of high inflation is not something you want to live through. My family and I have been there and I was in a relatively well paid and secure job. Like many we ended up in negative equity for over 5 years with mortgages at times in excess of 10%. A large number of people lost their homes when they were re-possessed.