Pensioners, Government + The Great British Energy Challenge
Cutting fuel allowances will happen but why are energy bills so expensive in the first place that subsidies are needed?
Do you ever get that feeling where you believe that you are the only one? Everyone else is looking at a challenge and you are the only one that is looking at it from a different angle.
This is what winter fuel allowances are doing to me at the moment.
On Tuesday 10th September 2024, the current Government voted 348 - 228 in favour of scrapping the Winter Fuel Allowance for pensioners.
This means that a £300 subsidy will not be granted to some pensioners. This £1.6bn subsidy is, of course, what is going to completely crush the UK economy and send us into complete oblivion.
Source + Thank you to Proper Memes because this made me laugh and is entirely appropriate for this post!
However, I am of firm belief that the REAL issue here is that the price of a unit of electricity, the price of a unit of gas and the standing charges are TOO HIGH in the first place.
Whilst not subsidising pensioners anymore might be a massive political faux pas, would this be an issue if our energy bills were not so expensive in the first place?
Would this be an issue if we were NOT spending a record £250m a MONTH on importing electricity?
Screwed up energy policy
All of this is part of a continually inept and screwed up energy policy.
(who will be appearing on the CC podcast soon) wrote a superb article about New Zealand and their energy troubles. The same article also highlights challenges that we will have on the shores of the UK very soon. I’d highly recommend reading the New Zealand preview.For those not overly familiar with what a winter fuel payment is, this screenshot will help.
Lets explore what a standing charge is and how they are calculated. This will help to shed some light on the energy issues that we currently have.
The average daily standing charge from 1st July through 30th September will be 60p per day for electricity and 31p per day for gas. That is 91p per day for the privilege of being connected to the network.
Read through the website and you will see that the standing charge is calculated to cover a multitude of expenses, some of which include:
1 - Grid maintenance
2 - Cost of installing meters
3 - Investments in renewable energy sources
4 - Government programmes aimed at helping vulnerable households
Points 1 + 2 are quite self explanatory, although there are issues with the meters and how good the new smart meters actually are. There are also challenges with how efficient the grid is at present and how efficient and effective potential upgrades will be too.
Afterall, government contracts normally involve a lot of people milking the same cow.
It is points 3 and 4 that we need to look at more carefully.
Investments in renewable energy sources
When the government ‘’invests’’ into renewable energy sources then this will get added to your standing charge bill.
This creates a big issue because what the government is currently investing in is absolute nonsense.
We are being made poorer because we are being dragged down the Eco Zealot route of Net Zero or nothing else. Wind and Solar energy do have their place at the energy table but they are not base load energies. In order to create an abundance of good, green and clean energy, the Government should really be looking at nuclear.
Oil, gas and coal can also be used as well. The more energy that we have then the better that will be for everyone else. More energy should mean more capacity to deal with more ‘greener’ methods of energy production i.e. Wind + Solar et al
Governments funding wind turbines and solar projects might sound ok on paper but when you learn that this waste of currency is quite literally being added to your bill every month, then your attitude might swiftly change.
You will also get situations where the National Grid is paying a wind farm to NOT use energy because there is nowhere for that energy to go to.
I’ve written an energy letter to Labour before about this very topic.
If you would like to read about a multitude of ways that we get screwed, then please yesterdays article.
Sending us down this Net Zero path and not focusing on our base load energy is making us poorer. Wind and Solar do not cut it. We need more oil. We need more gas. We need more coal. We need more nuclear.
Without them then we are looking at importing more energy. This will cost a lot more cash and this will undoubtedly get passed on to everyone’s standing charge/bills.
This is why the UK has one of the highest energy costs in the world. My wife moaned that her bi-monthly £7 electricity bill was TOO HIGH!!! Yes, you did read that correctly – A £7 BIMONTHLY ELECTRICITY BILL!!
We may pay that in a week in the UK and that is just the standing charge!!
This is just one of the many reasons that I am ditching the UK and moving to Mexico.
Government programmes aimed at helping vulnerable households
If Government programmes are cut then surely the standing charge should be reduced as well?
That would be more of a pill for people to swallow, but you and I both know that the Government will not do this.
The challenge is that energy bills should not be so high in the first place that we need to even think of subsidies. If the unit prices were not that high (because of bad energy policy etc) then we would not be in this situation.
The fact that more people are not highlighting that our energy policy is the issue here is beyond me.
Using the standing charge figures from earlier, let us do some simple mathematics.
The average daily standing charge from 1st July through 30th September will be 60p per day for electricity and 31p per day for gas. That is 91p per day for the privilege of being connected to the network.
365 x 0.91p = £332.15
Using those charges as an average, we can see that the average standing charge for the year is approximately £332.15
There are about 27,000,000 dwellings in England. Not everyone has an electricity AND gas connection (some have oil instead) but let us use this as a rough number.
£332.15 = 27,000,000 = £8,968,050,000
We can calculate roughly that energy companies/National Grid make £9 BILLION per annum alone in standing charges.
This amounts to daylight robbery, especially as we are NOT getting value for currency here.
That point aside, not giving pensioners a winter fuel allowance is not the end of the world, but only if the standing charge is scrapped!
Winter fuel allowance = £300
Average annual standing charge = £332.15
Scrap the standing charge and winter fuel allowance and pensioners will actually be £32.15 better off. Well……that is until inflation renders that £32.15 worthless.
Easier said than done but that to me seems like challenge solved and crisis averted.
Solutions
1 - We need to produce more base load energy and not less
2 - We need to scrap the standing charge as we are not getting value for cash from it
3 - If you have the ability to get as off grid as possible then this would be worth looking at
4 - Look at getting other insulation measurers installed in your home. Loft + Cavity Wall insulation can be quite cost effective.
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