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Alex Clegg
@alexclegg.bsky.social
Economist at the Resolution Foundation, focusing on social security, poverty and living standards
114 followers269 following46 posts
ACalexclegg.bsky.social

And, as mentioned above, the long-term solution to the need to implement this kind of quick-fix help for high energy costs is a social tariff. The Government should start planning now to have one in place for next winter.

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ACalexclegg.bsky.social

The flipside of the financial uncertainty for the state is economic security for families, who would know that if temperatures plunged they would be offered some extra resources to pay for it

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ACalexclegg.bsky.social

Costs of the scheme are dependent on the weather, and so difficult to predict, but would be significantly less than the cost of universal Winter Fuel Payments as payments are only made in specific areas during a cold snap

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ACalexclegg.bsky.social

And this universalism could be extended to families with children or a disability, by widening eligibility to recipients of child benefit or disability benefits. This would go a long way to ensure that most poor families would be covered for some kind of support

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ACalexclegg.bsky.social

Eligibility could be extended to all households in receipt of a means-tested benefit or the State Pension, which would mirror the universalism for pensioners lost in the Winter Fuel Payment cut while covering more poor working-age families

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ACalexclegg.bsky.social

Expanding Cold Weather Payments is perhaps the most promising avenue for boosting support this winter, as it can target based on reasonable proxies for income and energy need, and could replicate a cut-price version of the universalism lost in the Winter Fuel Payment cut

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ACalexclegg.bsky.social

No option is perfect, but there are options, and we explore 4: 1: reducing energy bills directly 2: cut costs on pre-payment meters 3: expand Warm Home Discount 4: expand Cold Weather Payments (read the spotlight for detail on the merits and limitations of each)

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ACalexclegg.bsky.social

Designing a solution that meets all these criteria is tricky. The most obvious tool is the benefit system, but that confronts take-up issues and lacks info on energy needs. The alternative, acting directly on energy bills, can pick out high costs but can’t pinpoint low-incomes

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ACalexclegg.bsky.social

In practice, there are obvious constraints both from the Government’s desire to hold on to the bulk of the Winter Fuel Payment saving, and from the need to ensure any mitigation is done through readily available tools that can provide support quickly.

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ACalexclegg.bsky.social

So, while the immediate political pressure is about mitigating losses for pensioners, a fairer and more efficient way to provide support for energy bills would be to target all poorer families with high energy costs, regardless of age.

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Alex Clegg
@alexclegg.bsky.social
Economist at the Resolution Foundation, focusing on social security, poverty and living standards
114 followers269 following46 posts