Thursday 17 November 2022

Today's Budget

I'm trying to get my head around today's budget.  If my understanding is correct, this will be calamitous for a significant proportion of the UK.

Let's just consider energy costs.

A typical energy bill will be £3000 come April. Compare that price to this financial year where a typical average energy bill is £2,250 (averaging the present cap with the cap from April to October 2022). So that's £3,000 minus £2,250 equals £750 extra we need to find there. But! It is much worse than this since in this financial year we all got £400 help + most of us got £150 help paid by the council. We are not getting this help the next financial year.

So £750 + £400 + £150 = £1,300 worse off per annum for energy alone!

Or am I not understanding something?

Also, I'm hearing a lot of people on social media state that those on means tested benefits have done well out of this budget. Well, they'll "only" be £1,050 worse off rather than £1,300. This financial year, they got the £400 + £150 like most other people.
And they also received an additional £650. That equals a total of £1,200 (£400 + £150 + £650). However, next year they're only getting £900. So £300 worse off there (£1200 - £900).

But also next financial year, the energy bill will be £3000 on average. The average energy for this year is £2,250. So that's another £750 they're worse off. £300 + £750 means they're £1,050 worse off. Everyone else are £1,300 worse off. (Edit:  No, it appears that those on benefits will only be getting £600 the next financial year of 2023-24.  So they will be £1,350 worse off.  See below).

And we haven't even begun to consider all the other factors making us poorer e.g. the fact that food appears to have increased by over 30% in the past year.

At the moment in the UK, the news is full of people using food banks, missing meals, not putting their central heating on and so on.  See here.  What do people imagine will happen if they receive a £1,000 less?  Indeed, perhaps £1,500 to £2,000 less once we factor in all the other spiralling costs? (the 6% wage rises or 10% benefit rises scarcely mitigate this calamity).  Significant social unrest is surely the inevitable outcome.
 

Clearly, many poor people (and definitely not just those receiving means tested benefits), simply will not be able to make ends meet. So the Government has to do something else.

Update 4/1/23   Re The help with those on means-tested benefits.

I said above:
"next year they're only getting £900. So £300 worse off there (£1200 - £900)".

It has now been revealed that they will only get £600 the next financial year rather than £900, with the final payment of £300, taking it to £900, being made in the Spring of 2024 which I believe will take that payment into the 2024-2025 financial year. Most likely the energy prices will have not gone down by the 2024-25 financial year, so my worry is that this final £300 will also be counted towards the help given in the 2024-25 financial year. In other words, it looks like the Government might try to double-count this £300 and be trying to give the impression that those on benefits are getting £300 more than they actually are.
 
 




 

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