Energy Price Guarantee No Longer 2 years just 6 months at current level

[Deleted User]

Max68 said:

Hence my point on the fuel poverty line of whatever it is, 10% or 20% of your income spent on energy, being a possible guide for April.  Whatever is suggested though it's going to be difficult to find a balance.

So, household just above the line, gets no help, needs to use some more energy so they spend more and then end up below the line.  Not sure that's the idea we're going for here.

With some sort of system for tracking, allocating and comparing the combined income and expenditure for every member of every household in the country (in real time? monthly? weekly?).

Anything targeted needs to rely on a single, already available, comprehensive dataset that is an acceptable analogue for "need".  No other way will work, and even that way will be poor.

murphyslaw2020

wittynamegoeshere said:

Obviously bigger houses are always going to be worth more than smaller ones, even if neglected and sold for less than competing similar houses.  I didn't think I needed to explain this.

Most would end up with money in the bank at the end of the process, not in debt.  In a shinier, better maintained and more suitable house that costs less to run - just with fewer empty bedrooms.

There's no social engineering required.  All that's needed is to remove the market distortions that the benefits and subsidies are currently creating.  Perhaps some kind of assistance could speed up the process, but there's nothing stopping most from doing this for themselves.

As I stated above, what's your solution?  I'm suggesting action that individuals are empowered to take for themselves, I'm getting the impression that the tone from most arguing with me is just to complain and wait for money to arrive from the magic money tree.  My point is that this supply of perpetually borrowed money has run out, so things are going to change massively now, reality is dawning.  Best to get ahead and plan during the year ahead rather than crashing into the wall then complaining about it when it happens.

Hello

I agree where you are coming from, I don’t think people realise, and until conditions worsen only then, will they make the decisions to help themselves. 

Sometimes in life we have to make harsh unpalatable changes to our ways of living to survive and be comfortable.

ariarnia

murphyslaw2020 said:

wittynamegoeshere said:

Obviously bigger houses are always going to be worth more than smaller ones, even if neglected and sold for less than competing similar houses.  I didn't think I needed to explain this.

Most would end up with money in the bank at the end of the process, not in debt.  In a shinier, better maintained and more suitable house that costs less to run - just with fewer empty bedrooms.

There's no social engineering required.  All that's needed is to remove the market distortions that the benefits and subsidies are currently creating.  Perhaps some kind of assistance could speed up the process, but there's nothing stopping most from doing this for themselves.

As I stated above, what's your solution?  I'm suggesting action that individuals are empowered to take for themselves, I'm getting the impression that the tone from most arguing with me is just to complain and wait for money to arrive from the magic money tree.  My point is that this supply of perpetually borrowed money has run out, so things are going to change massively now, reality is dawning.  Best to get ahead and plan during the year ahead rather than crashing into the wall then complaining about it when it happens.

Hello

I agree where you are coming from, I don’t think people realise, and until conditions worsen only then, will they make the decisions to help themselves. 

Sometimes in life we have to make harsh unpalatable changes to our ways of living to survive and be comfortable.

and when youve made all the cuts you reasonably can what do you then do? 

or do you not think there are people who were struggling before all of this started who have been in worse and worse conditions over the last 6 months and made harsh and unpalatable changes and are now facing bills the prospect of bills doubling again next winter? 

theres only so deep you can cut before you hit bone. 

Chrysalis

AcerBen said:

Apols if this has already been answered.

Why is the price cap currently predicted to go up substantially in April, when as shown by Martin on TV last night, the wholesale price has come down considerably, and we haven't even entered the calculation period yet?

Ofgem cap and summer dailies got screwed by Germany and co filling their storage as those months contributed to their calculations, now thats been done, those on dallies seem to be benefiting from it, but by the time the SVR next gets reviewed I expect costs will be going upwards again.

Chrysalis

Spoonie_Turtle said:

ariarnia said:

Spoonie_Turtle said:

ariarnia said:

Sterlingtimes said:

The policy is directed at safeguarding the most vulnerable. But what happens to the vulnerable who are not the most vulnerable?

thats the situation i worry about. people who dont qualify or dont apply for the right benifits and maybe are on just enough  to manage most of the time but can't just 'efficiency' there way to finding £5k for annual energy when a year ago they might have shopped around for a good fix so only been paying 1k. i think the limit for a lot of benifits is something like 16k. no way can someone no matter how efficient on less than at least 25k just reduce expenditure to cope with bills at that level. thats not even thinking about the way food and fuel has gone up. people need to eat to get to work and to keep there homes damp free at a minimum. the level of support should reflect that and realise theres a much bigger cliff edge than normal between those who have always been seen as 'most vulnerable' and those who might well be quite a bit worse off without any support. 

Just for the sake of accuracy, the £16k limit for means-tested benefits is for savings, not income.  The actual income threshold varies by individual circumstance - single/couple, children, disability, rent/no rent, any savings above £6k, etc.

thank you. we are lucky enough that our experience of the benifit system is more than a decade out of date and in the cobwebby bits of the brain. i think someone recently said there were schemes available to help with things like insulation and bills but it was qualifying benifits OR under 16k income and i mixed the two up. that would be a sensible way to look at it though. but i still think the cut off would need to be a lot higher than 16k once you add in the increases to housing cost and food and transport. 

Completely agree.  A huge fundamental flaw in the system is the people who decide the minimum needed to survive have absolutely zero experience of living in the real world, they assume all people struggling have brought it on themselves (because let's face it, they've not actually had to do all that much work to earn their own grossly inflated salary, so they think it must be easy for everyone else to do the same and refuse to comprehend just how hard lower paid people actually work) and really have no clue how much anything actually costs.  There are plenty of people who've worked out what's actually needed (e.g. the Joseph Rowntree Foundation) but they're ignored by the people in power.  So yes, actual decent thresholds would need to be used, not on or below the poverty line!

@wittynamegoeshere I think one of the problems with your suggestion that people should move is just that, logically, if people can't afford the increase in energy bills, they probably also can't afford the upfront costs of moving even if it woukd otherwise be an option for them.  Some sort of Help to Move scheme could work well if they were interest-free loans, paid back from the proceeds of the sale or something, but that would also assume that everyone moving would make a profit on their house which in reality may very well not happen.  Either that or paid back through wages or benefits, at a level that doesn't cause hardship like the increased bills were going to.  Moving can't even necessarily be thought of as reducing energy bills, more likely simply preventing an unaffordable increase, so not exactly freeing money up.

Even less drastic but effective measures such as replacing appliances with more energy-efficient ones require an up front cost higher than the bill increase, so again the same problem that a lot of people really can't afford it.

Indeed, people involved in the decisions tend to have financial backgrounds but no experience in living in the conditions, IDS tried to at least emulate been poor, but activated some cheat modes.

Sunak a wealthy person, has somehow managed to grasp a little understanding of it as can see from his budget announcements, interviews etc, he has some understanding of whats going on, little touches like forcing LHA to be uprated,  and the targeting of CoL payments been very well targeted as well.  He as a result is been labelled as a socialist by some Tory MPs.  

It would be very nice if someone from a poor background was involved in this stuff but then they would likely be considered not qualified to be managing government financing decisions.  Its very easy to cut things from people when you think the source of their problems is themselves.

Renting privately the flaws of it is really been shown up in this energy crisis, most LLs will do whats the minimal capital expenditure to comply with law, so solid plate hobs, storage heaters, wooden framed single glazed windows, no insulation and so forth.  Luckily though induction hobs can be purchased in portable form, air fryers are small and dont require you to fit them in a oven fitting, but its difficult as a tenant with a very short term tenancy to do anything about lack of insulation, lack of a modern boiler and lack of double glazed PVC windows.  The pub industry where it seems its common to rent the premises has also been highlighted to suffer from similar issues where the investment decisions of the owner affect the day to day costs of the sitting tenant.

Chrysalis

Deleted_User said:

Max68 said:

Hence my point on the fuel poverty line of whatever it is, 10% or 20% of your income spent on energy, being a possible guide for April.  Whatever is suggested though it's going to be difficult to find a balance.

So, household just above the line, gets no help, needs to use some more energy so they spend more and then end up below the line.  Not sure that's the idea we're going for here.

With some sort of system for tracking, allocating and comparing the combined income and expenditure for every member of every household in the country (in real time? monthly? weekly?).

Anything targeted needs to rely on a single, already available, comprehensive dataset that is an acceptable analogue for "need".  No other way will work, and even that way will be poor.

There is a number of easy options, but I think a lot of the problems are political rather than technical.

There is a number of issues.

1 - There is people who "need" the money, people in this category are people I think who cant pay cost of living bills without intervention and they dont have a high standard of living.
2 - There is people who would like the money so they can maintain their lifestyle but dont need it.
3 - There is people who wont even have an effect on their lifestyle but they still want it because its "unfair" to only give to the poor, damn those handouts.
4 - There is the question of energy cost impact on the bill payer.  As a rule of thumb multi adult households have an easier time, evidence supplied by the energy companies and research.  However its politically negative to support singletons over families.
5 - No matter what you do, there will be unhappy people.
6 - There is a clamour to keep things as simple as possible which will typically lead to a not wide enough net or a much too big one.

Now in terms of household income, for everyone on PAYE, income based benefits, registered voter, council tax lists, this information is already known, the unknown's is those who are off the radar.  Household bills are also known. Many properties have an energy certificate.

A more simplified approach is what Sunak did, I liked it, quite simple, if the existing system has identified you need an income top up, then you will get CoL help, however it wasnt perfect.  The obvious losers from this are the people "just on the wrong side of the line".  A better solution would have been to taper it.  Which is normally how means tested benefits work, they tapered.

A different approach is the new WHD, I think this one is really controversial and I dont like it.  There is a chance they will adopt similar criteria to the new WHD on the targeted help next year.  A lot of the existing cabinet do not like what Sunak did which was unconditional help given to anyone who fell in the low income bracket.  A summery of the WHD system, is they do a low income check for the household, its not as simple as "do you get a means tested benefit" there is some modifiers involved, then if you are deemed low income they then do a energy cost calculation.  This energy cost calculation is nothing do with your actual bill, it also ignores the energy certificate on the property, instead they use a "balance of probability" system, they look at the floor space, and the age of the property, and then using a formula devise a "probable" cost.  If your property is deemed "high cost" and you are deemed "low income" you get the WHD, its not tapered its another all or nothing.  It is very controversial so e.g. on the low income they treat someone who just about scraped income top up support as poor as someone who is considered fully means tested poor, it favours larger properties, it favours multi adult households, but it does fit Tory ideology more than doing what Sunak did.

Whatever they come up with I think there will be a political reasoning for the decision its not going to be a simple ok lets see who needs it the most, it will need to be as compatible with ideology as possible.  For that reason anyone who got the £650 this year, I wouldnt assume you in the net in 2023.

Personally what I would do is CoL based on household income, taper it instead of a all or nothing, keep the £400 or something similar as well, and possibly if there is any money for it offer a XX amount of units subsidy, but this cant be very high both to keep costs low and also to encourage people to save usage, this subsidy would only be offered to legal occupiers (registered voting address, one address per person).  Of course a lot of money needs to be invested in state owned energy sources for a longer term solution to reduce our vulnerability to market conditions and reliance on imports.  I wouldnt bother with any nonsensical "energy use" criteria they just too controversial.

Max68

[Deleted User] said:

Max68 said:

Hence my point on the fuel poverty line of whatever it is, 10% or 20% of your income spent on energy, being a possible guide for April.  Whatever is suggested though it's going to be difficult to find a balance.

So, household just above the line, gets no help, needs to use some more energy so they spend more and then end up below the line.  Not sure that's the idea we're going for here.

With some sort of system for tracking, allocating and comparing the combined income and expenditure for every member of every household in the country (in real time? monthly? weekly?).

Anything targeted needs to rely on a single, already available, comprehensive dataset that is an acceptable analogue for "need".  No other way will work, and even that way will be poor.

Of course, you are right I was just trying to show how ridiculously difficult it would be to "draw a line".  There is a sort of database but doubt it would be much help.  I was on UC for a few months during the pandemic but when I found work again, I was told that there was no reason to close the claim because it would safeguard me if something happened negatively job wise, eg redundancy or similar.  It means you don't have to fully reclaim again. I haven't received any UC for quite some time because I earn more than the ceiling, but they still send me a NIL statement each months noting what earnings they have been notified of.  Not sure how long it goes on for before they totally close it, but I suspect they have notification of earnings from millions of ex claimants as well as current ones.

Spoonie_Turtle

Chrysalis said:

A summery of the WHD system, is they do a low income check for the household, its not as simple as "do you get a means tested benefit" there is some modifiers involved, then if you are deemed low income they then do a energy cost calculation.  This energy cost calculation is nothing do with your actual bill, it also ignores the energy certificate on the property, instead they use a "balance of probability" system, they look at the floor space, and the age of the property, and then using a formula devise a "probable" cost.  If your property is deemed "high cost" and you are deemed "low income" you get the WHD, its not tapered its another all or nothing.

Not quite.  It IS as simple as 'do you get a means-tested benefit' except for Tax Credits, where the modifier is that they have to earn below a certain threshold.  Every qualifying benefit is means-tested, a proxy for being deemed to have low income.

The household energy requirement calculation ignores occupancy and actual need, so if they were to do something similar going forward they would need to refine it to actually include everyone they intend to target.  The philosophy is very much 'we'll make sure nobody gets it who doesn't need it, and if that means some people who need it miss out, oh well'.  As is always the case with targeted benefits (and I don't mean only means-tested benefits).

Spoonie_Turtle

Max68 said:
 I was on UC for a few months during the pandemic but when I found work again, I was told that there was no reason to close the claim because it would safeguard me if something happened negatively job wise, eg redundancy or similar.  It means you don't have to fully reclaim again. I haven't received any UC for quite some time because I earn more than the ceiling, but they still send me a NIL statement each months noting what earnings they have been notified of.  Not sure how long it goes on for before they totally close it, but I suspect they have notification of earnings from millions of ex claimants as well as current ones.

6 months of consecutive nil payments.

The earnings information UC receives is from HMRC, the PAYE data from their payslips (which can create its own problems for claimants if it's reported at a different time from when it's actually paid, or certain deductions / contributions reported slightly wrong).

Max68

Spoonie_Turtle said:

Max68 said:
 I was on UC for a few months during the pandemic but when I found work again, I was told that there was no reason to close the claim because it would safeguard me if something happened negatively job wise, eg redundancy or similar.  It means you don't have to fully reclaim again. I haven't received any UC for quite some time because I earn more than the ceiling, but they still send me a NIL statement each months noting what earnings they have been notified of.  Not sure how long it goes on for before they totally close it, but I suspect they have notification of earnings from millions of ex claimants as well as current ones.

6 months of consecutive nil payments.

The earnings information UC receives is from HMRC, the PAYE data from their payslips (which can create its own problems for claimants if it's reported at a different time from when it's actually paid, or certain deductions / contributions reported slightly wrong).

That's interesting I've had 9 months of nil points!!  ;-)