Martin Lewis grills energy secretary over support for vulnerable people this winter

Chrysalis

I think the debate on if SC is right we will never get universal agreement. e.g. I think the poll tax was better than the current council tax for the same reason, yet the poll tax was unpopular.  However in this era of one putting themselves first I expect the majority who have a large household or have high energy use regardless of household are probably supportive of high zero usage costs.  Bear in mind you are not defending keeping the long standing existing system, you are defending keeping a tweaked system that was designed purposely to shift costs from one demographic to another, costs which increase based on the load on the grid.

Social tariff would clearly have a cost paid by those who dont get it whether its via taxpayers or SC, or unit rate bump, but that doesnt make it pointless unless of course you dont care for the poorest and only your own outgoings. I will take this a little further, as you calling it pointless is really going a lack of empathy to people who currently need food banks, have to beg to pay their bills etc.

Prices may have dropped but they are still significantly outside of normal expected market conditions and way above affordable levels for the poorest, you may be alright jack but not everyone is.  Of course the scheme if reintroduced doesnt need to be universal and given to everyone again.

As I said not everyone get's it.

QrizB

My issue with all of this (gestures generally upthread) is that we've already got a way of supporting those who are on the breadline. It's called the Welfare State.

Just as an example, if working-age people on Universal Credit, or the elderly on Pension Credit, can't afford a generally-agreed minimum acceptable standard of living, it suggests that UC and PC rates are too low and should be increased.

Applying sticking-plaster fixes like social tariffs and energy suppprt payments is a cynical political ploy to avoid raising benefits.

(And if anyone can understand why a 65-year-old on UC only needs £368 a month to live, while a 66-year-old on PC is considered to need £201 a week, you're doing better than me.)

MWT

Chrysalis said:

He continues to fight and I applaud him, Ofgems claim the SC is some kind of equal sharing is laughable as a per household for of revenue collection is very regressive and uneven on ability to pay, with no account of number of earners in a household and income levels. 

On that basis the price of a loaf of bread is also 'very regressive', would you like to have everyone else subsidise food prices as well perhaps?

Chrysalis said:

He proposed it is moved back to unit rate which is at least somewhat more reasonable as when more people are in a household they are more likely to use more and as such the contribution is more proportional.

The cost to provide a connection is not proportional to the use (within normal domestic limits) so how is it reasonable to pretend that it is?

Use the benefit system to support those most in need, don't try to shift the legitimate costs incurred by some onto the shoulders of others who are already struggling to meet the existing costs themselves.

MattMattMattUK

Chrysalis said:

Seen the clip of Martin challenging Shapps on all of the following points. Martin truly is a saint.

He has done great things for consumers, but he is far from a saint and often ignores the wider consequences and costs of his campaigns, it is a luxury politicians do not have, which Lewis regularly admits. 

Chrysalis said:

1 - Why hasnt Ofgem been spoken to about the changes they did voluntarily on moving costs from unit rate to SC, Shapps replied he spoke to Ofgem but didnt say the result of that discussion. Also briefly tried to justify the current expenses in defence of Ofgem.

The definition of "speaking to" in this instance means why has Ofgem not changed/abolished standing charges, where as the reality is that discussions will have been had with Ofgem and the standing charge was retained as it is the rational position. It is perfectly acceptable for Shapps to justify the current expenses, as they make sense.

Chrysalis said:

2 - What happened to the consultancy on a new social tariff, Shapps tried to fob off Martin saying the WHD is the help for the poor, Martin bounced it back saying thats not good enough, Shapps then replied saying there might still be a consultancy, one can be done with 2 weeks notice. (remember many of the poorest dont qualify for the WHD).

It is obvious that the social tariff has been dropped, but it was not Shapps place to announce that. That being said the social tariff is an awful idea and should not be implemented.

Chrysalis said:
3 - Is the £400 support coming back which as things stand means those who already tried very hard to reduce usage, and are still struggling will be paying more next winter.  Shapps said no more support as he thinks unit prices are now at an acceptable level, Martin reminded him we still at more than double normal prices, Shapps ignored it and repeated his previous reply.

This was a ridiculous comment from Lewis, everyone knows the £400 is not coming back, neither should it come back, indeed once the EPG was introduced the £400 should have never happened. 

Chrysalis said:

Shapps also justified his policies as a decision based on not offloading costs of new support on higher earning taxpayers, so was made clear those who are able to pay are being prioritised over those who are not now by the current government.

The government has to balance the whole financial system, it is not a simple as "tax the rich", as much as the economically illiterate elements of the left would like to try and have us believe. No country operates a successful economic system based on punitive taxes on higher earners, however many operate successful systems based on a wide, higher paying tax base, Scandinavia being a prime example, but also the likes of Germany, The Netherlands, even France. 

Chrysalis said:

He continues to fight and I applaud him, Ofgems claim the SC is some kind of equal sharing is laughable as a per household for of revenue collection is very regressive and uneven on ability to pay, with no account of number of earners in a household and income levels.  He proposed it is moved back to unit rate which is at least somewhat more reasonable as when more people are in a household they are more likely to use more and as such the contribution is more proportional.

His proposal is cross subsidy managed by the energy companies, because that is what abolishing/reducing the standing charge would mean, that is an awful idea. There are mechanisms in place outside of market distortions or cross subsidy and social tariffs to support people. Any support should be provided via the benefits system, not via convoluted and unfair systems. 

I like Lewis, he has done a lot of good, but he does jump on bandwagons and go after random things that seem to be opposed to his overall financial literacy.

*Just for reference I do not like Shapps in the slightest, I dislike his politics, I dislike him as a personality, but he was not "wrong" here and Lewis was not right. Part of being a grown up is recognising that even people you dislike can be right, and that people you like can be wrong. 

MattMattMattUK

Chrysalis said:

I think the debate on if SC is right we will never get universal agreement. e.g. I think the poll tax was better than the current council tax for the same reason, yet the poll tax was unpopular.  However in this era of one putting themselves first I expect the majority who have a large household or have high energy use regardless of household are probably supportive of high zero usage costs.  Bear in mind you are not defending keeping the long standing existing system, you are defending keeping a tweaked system that was designed purposely to shift costs from one demographic to another, costs which increase based on the load on the grid.

I agreed with the poll tax, a much fairer system, I agree with standing charges. We are not defending a system that moves costs from one demographic to another, we are defending a system that apportions costs to users based on the source of those costs. So fixed costs, created by a grid connection and maintenance are billed per connection, that is the standing charge, costs related to the provision and supply of energy on a per kWh basis are apportioned to the unit rate. That is the rational position.

Chrysalis said:

Social tariff would clearly have a cost paid by those who dont get it whether its via taxpayers or SC, or unit rate bump, but that doesnt make it pointless unless of course you dont care for the poorest and only your own outgoings. I will take this a little further, as you calling it pointless is really going a lack of empathy to people who currently need food banks, have to beg to pay their bills etc.

The issues with social tariffs are many, but the main ones are that they distort the market, that they create subsidy within billing systems an most importantly they create a cliff edge, one either qualifies and so gets the service much cheaper, or does not and so gets nothing. I know you love to claim that anyone who does not support throwing money in multiple different ways at people do not care, lack empathy etc. but that is blatantly untrue, we are not evil because we do not support social tariffs, we just see them as a very bad way of tackling poverty. I myself have many times on here said that benefits should rise, particularly those for the disabled, as have many of the others who I see on here against social tariffs. 

There is a system in place, the benefits system, rather than social tariffs, random energy payments etc. The benefits system how the financial pressures should be handled, not via random interventions.

Chrysalis said:

Prices may have dropped but they are still significantly outside of normal expected market conditions and way above affordable levels for the poorest, you may be alright jack but not everyone is.  Of course the scheme if reintroduced doesnt need to be universal and given to everyone again.

Prices have dropped, but realistically you need to stop banging on about "normal expected market conditions", they are well within that range, what you actually mean is "higher than historical averages" which is very different. And there you go again, personal attacks against anyone who does not agree with you and your chosen "solution". The £400 scheme should not be reintroduced, it was an awful scheme by just about any measure possible. If there is an issue with costs, then benefits should be raised, not adding a bunch of hair brained schemes scattered all over different products and services. 

Chrysalis said:

As I said not everyone get's it.

We all get it, we just do not agree with your solutions, because they are just about the worst way to tackle the issue. 

Scot_39

It's time any and all of these specials were ended.

Arguably many should never have been introduced in their current forms.

But the Cons have done nothing but actively encourage the handout culture over last 3 years - furlough ( at upto £2500+ pm = c7x UC basic, 3x new state pension), £10s bn in EBSS and uncapped units for EPG to rich and poor alike, extra - and tax free WFP to 12m pensioners, £100pm to c8m on UC etc)

 

It is patently obvious that energy bills haven't reduced - and remain far beyond the CPI inflation level.

That essential food items remain far above the CPI inflation level. (And recent minor improvements may soon be reversed by recent loss of grain corridor - making it worse yet).

And for many on UC with housing support - rent - private rental in particular - is now seeing significant inflation - so again - needs reflecting in rent allowances - which had been frozen at one stage iirc.

And that unless inflation on these items turns to matching deflation - anything remaining over recent CPI indexing - needs a degree of additional compensation - to basic long term support - UC, pension credit etc - for those spending a much higher share of income on those things.

Edit

And sadly - Shapps - and the 2 week review comment - fills me with horror - because it is exactly that sort of quick knee jerk - panic - short termism - that has in part created the current mess.

Politicians need to get their fingers out - and earn their income - the time for self obsessed WM centric nonsense is long gone. The poor don't care as much about partygate, by elections that make no meaningful difference to balance in WM etc as they do about feeding their kids, paying their rent or freezing to death next winter.

Spoonie_Turtle

Scot_39 said:

And for many on UC with housing support - rent - private rental in particular - is now seeing significant inflation - so again - needs reflecting in rent allowances - which had been frozen at one stage iirc.

Had been frozen for some years, rose in April 2020 to just 30th centile of area market rates, and has been frozen in cash terms since then.

sevenhills

If the Government did want to help poor people with their energy bills, they could tell the energy companies to discount by 20% a small specific kWh and charge the full amount on the rest.
Like income tax has an allowance, then 20% and then 40%
But we need to keep things simple and increase the cost of energy, because of climate change.

CSI_Yorkshire

sevenhills said:

If the Government did want to help poor people with their energy bills, they could tell the energy companies to discount by 20% a small specific kWh and charge the full amount on the rest.
Like income tax has an allowance, then 20% and then 40%
But we need to keep things simple and increase the cost of energy, because of climate change.

If the Government did want to help poor people with their energy bills, they could increase the size or scope of benefit payments.

That's a far better solution than tinkering with tariffs and things - plus your idea would give the biggest benefit to rich people with big solar and battery systems, probably not what you intended.