Warm Home Discount Costs To Be Shifted From SC To U/R

bristolleedsfan

https://forums.moneysavingexpert.com/discussion/comment/81882844#Comment_81882844

Whilst I did not quote specifically, I was referring to -

"if so - surely time he and others stopped trying yo impose their choice on those who dont - even if they too may save a few p a day per fuel"

Suppliers launch fixed tariffs with higher SC/lower unit rates to appeal to higher users and are able to continue to do so. the problem is lack of lower SC tariffs with no exit fees and the main reason SC became so high on most tariffs due to OFGEM moving costs from U/R to SC a few years ago.

Scot_39

They moved cost recovery - the costs themselves were there before and by their experts analysis "fixed".

The recovery moved because low users were not in Ofgems view contributing their share of those fixed network costs.

michaels

Of course, the main question might be why we are paying for a benefit payment, the WHD, from energy bills (ironically also from those who get the benefit) rather than from general taxation which in theory at least should be based on ability to pay.

matt_drummer

https://forums.moneysavingexpert.com/discussion/comment/81883938#Comment_81883938

Why does it make any difference?

At the moment the WHD is £150 and £40 is added to all bills to cover it.

If the £40 goes from bills to general taxation then the WHD becomes £110 as the recipients bills have already reduced by £40.

Nobody can surely be thinking that £40 will go from bills and the WHD would remain at £150?

QrizB

Nobody can surely be thinking that £40 will go from bills and the WHD would remain at £150?

That would be my expectation, yes.

£40 goes from ~25M domestic bills and ~£1B is collected from the population via eg income tax and VAT. WHD remains at £150.

Why exactly do you think it wouldn't?

matt_drummer

https://forums.moneysavingexpert.com/discussion/comment/81884175#Comment_81884175

It would be an effective 36% increase in the WHD.

I am not in favour of increasing handouts at this moment in time.

MattMattMattUK

https://forums.moneysavingexpert.com/discussion/comment/81883938#Comment_81883938

The WHD should be abolished, it should have never existed in the first place. The welfare state is there to support those who cannot support themselves, if benefits are not enough then they should rise, meddling with various utilities and services via random subsidies or social tariffs is choosing to break a different system rather than fixing the one already in place.

QrizB

It would be an effective 36% increase in the WHD.

It really wouldn't. Not unless you're counting the £40 that non-WHD recipients are also seeing as a discount as "WHD for all".

I am not in favour of increasing handouts at this moment in time.

It wouldn't be an increase.

matt_drummer

https://forums.moneysavingexpert.com/discussion/comment/81884290#Comment_81884290

I disagree.

WHD is £150 at the moment but £40 is added to all bills to pay for it.

If the WHD recipient is a non tax payer and the WHD is now funded by tax payers and the WHD recipient continues to receive £150 they see an increase of £40 in their income.

:@Scot39 keeps telling us that the WHD is really only £110 as £40 comes via the recipients energy costs.

It must be an increase if the WHD recipient ends up with an extra £40.

tfhnota

But the £40 goes on unit rates so is revenue neutral for government expenditure, some on WHD who are below average users will have a small bonus, high users will be slightly worse off but always have the option to use less energy, mostly it will not be noticed as there is also the £150 cut to unit rates, in the round and on average, coming in at the same time. Energy price fluctuations will always leave high users worse and that variation is much greater than these minor changes. A good case could be made for benefits or WHD reductions if free solar has been fitted to their property, though, and it would be a real innovation if the debt racked up by those on benefits was reflected in benefit cuts rather than putting them on the energy bill, although a better case could be made for tightening up the generous retail margins that Ofgem allow.