Social Tariff's on Utility Bills

“Ministers want to see “social tariffs” based on ability to pay, as part of a broader drive to reduce utility bills.”

So, is everyone happy to effecively be put on a more expensive tariff than our neighbours just because we happen to earn more and/or have less outgoings each month ?

No.

So, is everyone happy to effecively be put on a more expensive tariff than our neighbours just because we happen to earn more and/or have less outgoings each month ?

Well I suppose it would reverse the ridiculous situation where the ‘poor’ are subsidising the power consumption of the ‘rich’ with feed in tariffs!

So, is everyone happy to effecively be put on a more expensive tariff than our neighbours just because we happen to earn more and/or have less outgoings each month ?

Your assuming that everyone reading that will be paying more for some reason.

How would this help reduce utility bills! The incentive for those who would benefit most from reduced consumption would be removed.

Certainly Not! It’ll never happen.

the ‘poor’ are subsidising the power consumption of the ‘rich’ with feed in tariffs!

+1. Stupid scheme.

Where does anything say bills will increase?

Poor people need water, heating and light just like well off people do but they often struggle to pay the bills so faced with having to prioritise spending when faced with threats from the utility companies, they stop buying decent food and school clothing (for example).

This particular debate has been sparked IIRC by OFWAT’s decision to allow water companies to charge their poorer customers less money, something OFWAT have denied them in the past. There’s no talk about water bills rising for the other customers to cover the cost because the whole income/profit/investment process is heavily controlled by the regulator.

Your assuming that everyone reading that will be paying more for some reason

Yes, they may not be paying more than they are now but their bills are not being reduced just because they’ve got more money …

Just seems unfair.

Would we be happy to go into Tesco’s and see two prices on each item – one for the rich and one for the poor?

or one price for NHS patients who pay NI and one price for those who can’t?

These are life essentials we’re talking about, without them people will die. These people need help, our help. Any society that doesn’t support their more vulnerable members deserves to be eradicated.

Poor people need water, heating and light just like well off people do but they often struggle to pay the bills so faced with having to prioritise spending when faced with threats from the utility companies, they stop buying decent food and school clothing (for example).

Absolutely. Lets start reducing their (and everyone elses) bills by cancelling all feed in tariffs.

Privatised water companies? What’s all that about then?

I’d prefer a tariff on usage

ie work out ‘average’ usage

if you use below average you pay less than average per unit
if you use higher then you pay above average per unit
if you stick in some ‘bands’ to allow tuning – ie really low user pay really low and really high users pay really high

so what exactly is wrong with feed in tariffs ?

perhaps they should just get big batterys and store the energy for themselves rather than selling it on

so what exactly is wrong with feed in tariffs ?

Everyone else has to pay for them.

perhaps they should just get big batterys and store the energy for themselves rather than selling it on

They do use it themselves where they can. They get paid for each unit they use on top of saving on the energy they would have purchased.

Your assuming that everyone reading that will be paying more for some reason

Yes, they may not be paying more than they are now but their bills are not being reduced just because they’ve got more money …
Just seems unfair.

You missed my point.

What i was saying was, why are you presuming that everyone reading this will be those not getting a cheaper rate ?

Would we be happy to go into Tesco’s and see two prices on each item – one for the rich and one for the poor?

Would we be happy with a system where some people work, and pay Tax into the pot, while other get handouts from the Government because they can’t find work ?

Seems pretty standard to me.

Does this not risk becoming an “incentive” to certain types to stay sat on their arse rather than increasing their income through hard graft?

British Gas used to do a reduced tariff for those on benefits. I couldn’t understand why someone (my mate)at home all the time on benefits could pay less for more energy usage when I wasn’t at home due to work then having to watch my energy usage due the cost.

Just seems unfair.

Seems fair to me. Since the services provided by the utilities are deemed as basic essentials to the population living in this country, what would you have the less well off do?

This is the stupidity of privatisation. They need to make a profit, but they are obligated to supply these services to those who my not be able to afford to pay the full cost, so then you get the more well off bleating about how unfair it is.

Well being one of those who is a bit more well off, I won’t bleat. I have a conscience.

Does this not risk becoming an “incentive” to certain types to stay sat on their arse rather than increasing their income through hard graft?

That is based on the sweeping generalization that all these people are a bunch of feckless wasters.

Personally i think we all should be on pay as you use/pre-pay meters BUT charged at the same price we would normally pay on our normal domestic direct debit terms. I really dont see why the difference is so great for meter users than normal tariffs.

Pay for what you use/need in my opinion makes sense, we would all monitor usage a lot more closely. I guess the only loser there would be the utility company.

Maybe they should be given a free allowance, based on average usage for the area, from the energy companies and anything above this is chargable. The free allowance would be taken from their benefits at cost. This way the energy provider has only lost the profit on the allowance, the government/tax payer isn’t paying for their profits either. Those that need help get it in an allowance but they are made responsible for not wasting energy above the allowance.

Trailrat – so what exactly is wrong with feed in tariffs ?

The first thing to note about feed in tariffs is that although ‘open to all’ they are only actually open to those who can afford £k’s on an installation; and even then really only to property owners. That means that the poorest people in society are excluded.

The next thing to note is that for every kW of energy you make you get paid ~45p (exact rates depend on when you installed, type of system etc) just for generating the power – even if you use it yourself. If you can’t use the power yourself it goes to the grid and you get another 3.something p per kW [that bit is of course OK].

Now if that isn’t stupid enough, we’ve guaranteed these rates, and index linked them for 25 years.

Now where does this money come from? Well it comes from the electricity supply companies, who pass it on to the customers buying electricity from them. The “affluent” people are of course buying much less electricity from them because they are generating their own, but the poorest end of society can’t so pay to subsidise the ‘rich’.

Next time you pass a house with ‘eco-bling’ solar panels on the roof, you might want to ask yourself if they are saving the planet or as morally deviant as any headline grabbing comedian!

That is based on the sweeping generalization that all these people are a bunch of feckless wasters.

I said “certain types” NOT “everyone this would help”

It really gets me the way people with PV panels often try to cut down protected trees with the excuse that they want to maximise income oops I mean output. You get some real pearls of hypocrisy like ‘I want to cut down the tree to conserve CO2’ or ‘I’m just trying to be green, the tree’s got to go’.

poly’s reply + 1

Plus the poor are often forced onto pre-pay meters which charge a huge premium for the energy – so they get completely screwed over to subsidise the rich.

Utterly wrong this, mixing private companies and welfare policy is going to end very badly. Everyone should pay exactly the same. If people on lower incomes need support with these essential services it should come through the welfare state. Profit making companies and social support in this context should kept completely seperate.

The dual pricing of stuff in Tescos is a good analogy, food is also an essential of life, we wouldn’t dream of going down this route.

All this does is get the government of the hook regarding it’s responsibilities regarding managing a fiar soceity where the basics are available to everyone and gives the utility companies a veneer of coporate responsibility while in reality they rake in the profits despite providing a somewhat dubious service.

The feed in tariff thing above is a complete red herring, especially about it only being available to the better off. Investments returns and interest on savings is only available to those with money to in the first place. It’s the way the world works. Besides which those people investing in small scale power generation are starting the country down the route of sustainable and more importantly distributed power generation. if the geovernment had any sense it would make it more widely available to people on lower incomes as well, e.g. loans for the installation paid back vis the feed in tariffs.

This:

If people on lower incomes need support with these essential services it should come through the welfare state.

And not that:

Maybe they should be given a free allowance, based on average usage for the area, from the energy companies and anything above this is chargable. The free allowance would be taken from their benefits at cost. This way the energy provider has only lost the profit on the allowance, the government/tax payer isn’t paying for their profits either. Those that need help get it in an allowance but they are made responsible for not wasting energy above the allowance.

That is a remarkably complex, fraud-inducing solution to a simple problem. If people are really too poor to buy essentials through no fault of their own, they should be given greater benefits.

Regardless of the actual cost of the services, at the moment everyone pays the same amount of tax on each unit of gas, electric and, yes, petrol – regardless of their income.

Surely the left should be arguing for a progressive approach to the taxation applied to these services, rather than a structured price for the services themselves.

I’ll agree when I stop seeing the so called hard up smoking, watching 42″ tellys and hanging around bookies.
Its a cheap way of attracting attention thats all.

Regardless of the actual cost of the services, at the moment everyone pays the same amount of tax on each unit of gas, electric and, yes, petrol – regardless of their income…

…once they’ve paid income tax.

The simple fact that utilities should not be in the hands of private companies. Profit from people’s basic life’s needs.

You could use the Tescos anology. But you do have freedom of choice. Tescos Value or Tescos Finest? I have no choice who supplies my water. I either have water or I do not. And I pay the quoted rate. I don’t get to choose.

And it was quote by the faceless Gov spokesman that those who could afford to pay more will. The increase is coming to subsidise the lower tariffs.

I have no choice who supplies my water. I either have water or I do not. And I pay the quoted rate. I don’t get to choose

Oxfam were advertising that they could supply a family with water for £2 a month. Maybe you could try them. 🙂

The simple fact that utilities should not be in the hands of private companies. Profit from people’s basic life’s needs.

That’s not a fact, that’s an assertion, though. There’s another assertion that says the state is inherently rubbish at running industries.

You could use the Tescos anology. But you do have freedom of choice. Tescos Value or Tescos Finest? I have no choice who supplies my water. I either have water or I do not. And I pay the quoted rate. I don’t get to choose.

That’s why – unlike food prices – water prices are heavily regulated in the UK: http://www.ofwat.gov.uk/consumerissues/chargesbills/householdcharges/metered

So, is everyone happy to effecively be put on a more expensive tariff than our neighbours just because we happen to earn more and/or have less outgoings each month ?

from each according to his ability, to each according to his need

…once if they’ve paid income tax.

FTFY

Maybe they should be given a free allowance, based on average usage for the area, from the energy companies and anything above this is chargable.

This isn’t a bad idea. Follow that with a reasonable rate for so many units of consumption. Then punitive rates for people who want to light up their gardens like effing Blackpool.

utilities should not be in the hands of private companies

Couldn’t agree more. English water owned by a French company. How did that happen?

The simple fact that utilities should not be in the hands of private companies. Profit from people’s basic life’s needs.

You could use the Tescos analogy………..

While we’re talking about utilities….. given that the vast majority of our food supply is in the hands of just a handful of companies, who control supply from the farm, through distribution to the shelf – at what point do Tescos and Wallmart cease to be grocers and start to effectively be become utility companies? Is the Government braced to bail them out now that they’re to big to fail?

Using the supermarket analogy – the cheapest goods are sold as loss-leaders to attract high spenders to the biggest supermarkets on the outer peripheries of towns. Supermarkets use those loss leaders to pull the spending power of the well off towards the cheapest ground rent and away from high street competitors, encouraging them to spend all their money in one shop, rather than in one street. The poorest consumers don’t have cars to drive there, and the goods available to them locally are much poorer value, and become increasingly poorer value as the high street and the distribution networks are striped of their viability.

So in the same way as with utilities – the best tariffs currently are reserved for the credit-worthy. Electricity and gas is much more expensive if you don’t have a credit meter or the stability of income to sign up for direct debits. Most people on low incomes are not jobless but in and out of work – low paid, insecure and short term jobs and variable shifts. They suffer interruptions in their income when they move from benefits to work, then they suffer those interruptions again when they are bumped back off onto benefits. The incentive offered by power companies target people in a much more stable condition, who won’t miss a direct debit leaving their account every month, and apart from having a shrug and a grumble about it sometimes can cope perfectly well if it turns out they are being over-charged for months on end.

The poor pay more for pretty much everything.

The poor pay more for pretty much everything

Yes but, on the plus side, they die younger so the suffering is shorter.

🙂

Great post though, MacC. I love it when people think exactly what I think – saves me all that typing!

A name from the Third Policeman, and a pic of Steve Buscemi (I think!) on your profile. Are you actually me?

MacC so are you in favour of letting the poor pay a little less for energy?