Energy related budget stuff...

EssexHebridean

Scrapping of gas SC already announced.

From Martin's live tweets on the budget:(copy/pasted so excuse variable formatting!)

ENERGY
1. He is planning to take policy costs off energy bills, and scrap new levies. So paid via general taxation.
2. Only fund new energy projects if they lower bills and can connect to networks
3. Move more of our renewables to fixed contracts.
4. Elec VAT scrap now to last to July (was April)
5. Gas standing charge to be scrapped via Ofgem 2027 (as noted earlier)
6. Similar standing charge reforms to follow for electricity bills.

• NEWS ENERGY PAYMENT: £100 payment to all households in Council Tax bands A to D for England (and funding for same in other nations). That's 20m homes.

Translation: This is the support for the huge rise due in January price cap. Its expected to be 27% up. Which equates to roughly £100

PS this is similar to the Rishi Sunak measure during the Ukraine energy crisis, that was the precedent. They use council tax as it is a pretty decent proxy for household income. Like it, they will need more money in the Crisis & Resilience Fund for the vulnerable homes not in those bands as a mop up.

Brie

I was wondering why just the gas standing charge would be removed and not the electricity but I see that it's supposedly going to follow. It certainly will make price comparisons easier!

Swipe

https://forums.moneysavingexpert.com/discussion/comment/82184113#Comment_82184113

That won't be great for high users with storage heaters or heat pumps

Brie

https://forums.moneysavingexpert.com/discussion/comment/82184119#Comment_82184119

I don't see why. I presume the cost covered currently by the SC will be lumped into the per unit price so potentially everyone with low use will win by not paying a set price simply to have service.

Swipe

https://forums.moneysavingexpert.com/discussion/comment/82184130#Comment_82184130

Just like the gas, low users will benefit but high users will lose out

molerat

My daughter will find the £100 a nice bonus. They're on around £100K between them.

bob2302

Are gas SCs going? I thought this just applied to the price capped SVR.

Scot_39

https://forums.moneysavingexpert.com/discussion/6688373/energy-related-budget-stuff

Except Sunaks £150 CT rebate was iirc Apr 22 - long before Ukraine peak energy bills.

And the real comparison needed is with winter 22/23 - and EPG and EBSS £400 aid on top.

The MSE 3 are already at £2200 for Jan - with BG still to give an update on 15/10 figures reflecting more recent significant price rises since their 15/10 figures - and even the 26th dates for two EDF and EOn - who are pushing £2350-2400 for Apr.

Scale up from current pre Oct 23 - for last two TDCV cuts - from 2900 to 2500 (16%) and from 12000 to 9500 (26%) gas - for dual fuel - and your looking at gas and likely electric rates higher than say Jan23-Mar 23 regional averages of 34.02p / kWh SR Electric and 10.33p /kWh gas under EPG.

And then you need to lower those by subtracting the impact of the £66/£67pm off for those of us who also got the £400 EBSS.

Even the OBR forecasts now completely out on household energy costs and inflation it will cause - their charts - centred on around 150p/therm peak at end of year - their worst case not too far over 200p - maybe 215p (I'll have to download report and see details - just going on OBR slide 7 on bbc at 14:35 today - and certainly nowhere near the 230+ in last two weeks - and the even more sobering 249.6p earlier today on TE chart.

https://tradingeconomics.com/commodity/uk-natural-gas

At todays sort of prices and those Apr forecasts we could well be needing £100pm - not £67 - and more than £100 total + £30 vat ??.

Scot_39

https://forums.moneysavingexpert.com/discussion/6688373/energy-related-budget-stuff

Healey has apparently confirmed in a Times front page article today that No 2 on your list - or is it MLs list - only if can be connected etc - will be "carried into" the next renewables auction round.

At least that is for new Offshore farms. The article seems to limit to offshore in one place, but reverts to generic renewables in others.

Shame we have had to wait 12 years since AR1 - and before that for non CfD rrnewables contracts - for basic common sense to be applied.

For far too long auctions focussed only on capacity and wholesale pricing - not delivererable capacity and critically for our bills the actual delivered price.

We might not each be facing such high costs on our bills for the disjointed planning we have pursued for far far too long.

Like the £7m it quotes as paid to renewables operators - and any premium on the rates used for tfe £40m paid to alternative generators - that snapshot taken on Tuesday, the day before the budget.

Lets see how "lower our bills" interpreted - as suspect it wont mean not paying premiums - like the £91/MWh at 24 indexing for Offshore - even without 1 yr inflation - 15-20% above 2025 wholesale pricing - itself ironically added to by c15-20% by past high CfD pricing of upto £120/MWh.

As I fear it will be more of the same "than they would have been" based on high predictiins of future alternative generation prices that just havent materialised for most of the last 10-20+ years,.and of course greens imposing further major costs like CCUS on fossil generation.

Alnat1

https://forums.moneysavingexpert.com/discussion/comment/82184164#Comment_82184164

Similar to all the better off pensioners getting the Winter Fuel Payment?

Scot_39

Better off pensioners pay taxes.

They have likely also paid far higher wage taxes at far higher rates than current - throughout their potentially longer working lives.

Like 33% basic rate upto c1979. Cons lowered to 23%, New Lab to 20% and Cons-Lib // Cons doubled it pa, matched ni thresh and dropped ni rate down to 8% in last 6m - worth over a further £200 net pm take home at median uk wage.

My dad and uncles all left school and started work at 14, normal until ealier law change finally applied years later - delayed to after end WW2 - in 1947 iirc - and that only increased the age to 15.

Few especially in poorer working class homes allowed to stay on.

Likely the vast majority on todays lower - and remember its a max of c£9600 pa - old basic state pension, likely started working early too.

Oops edited - For 50 years of taxes (14→65) - sub c£200pa back - less than 1m of UC or 1m PIP being handed out for free

14 leaving age, means many started full time work a full 4 years earlier vs todays 18 school or tra min target - or upto 7 years earlier vs the 50% at uni today to 21.

Edit : And for many their younger years involved far lower state costs - bearing in mind the likes of NHS was only formed in 1948, no state paid nursery provision, no school breakfast clubs etc etc And secondary education - IFS puts that at £7.8k pa pp - so 4 years another £31.2k debt to society before start working.

And just why is it fair that a pensioner on c£35k (below median wage) is too rich for a £100 benefit on a knife edge 100% claw back - but a couple on upto £120k - 3x median wage - can keep 100% of multiples of child benefit worth upto c£1300pa per child - and keep some of it over a £20k tappered claw back - so upto a joint £160k pa - 4x the median wage.

And no I am not a state pensioner- but hope to survive to be one one day - and get a pension back for all of my contributions that started when I was 16.