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Loan Or Discount?

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sp1814 | 16:21 Sun 10th Apr 2022 | News
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On Thursday’s Question Time, Tory MP Greg Hands called the £200 loan to offset fuel increases 'a discount', but we have to pay it back over (I think) four years...which makes it a loan surely?

Hands went onto justify it because it was “put on the price point, not the individual”.

He seemed adamant, so I wonder - perhaps he's right?

Or is it like when Johnson said that crime figures had fallen by 14% - just a statement that's the opposite of the truth?


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Sounds like a compulsory loan to me.
It is to be paid back over 5 years and we can't opt out. Some people will never pay it back because they die, move in to residential care or move in with somebody else and don't have their name on the bill; others who never had the loan will pay it back such as people moving in to their own home for the first time.
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Thanks Barry - but what about the rest of us - the ones who don't move within the five years of the l̶o̶a̶n̶ discount.
£40 a year will be added to our fuel bills
it's both, interest free loan, £200 today has a future value less than that. That's what's known as Rithmetic.
The thinking is that the £200 loan will help us while the cost of fuel is so high, and the £40 a year won't be noticed because the price of fuel have (hopefully) dropped.
We shall see.
Are there complexities? Is the 200 given to the individual bill payer to be repaid by them or is it per property. If I move into a property & haven't had the 200 will I find myself paying an extra 40 over the next 5 years. Will it apply across all providers - if I get the 200 with provider X then change to Y will I pay it back to Y? Just musing.
If it was a loan, and you were to die, the money would have to be repaid from your estate. That doesn't apply though.

Similarly, if it were a loan and you were to move into a care home, you'd still have to repay it. You won't though.

If it were a loan, someone who starts paying fuel bills after such loans were made (e.g. a young person who moves out of their parents' house and into their own home at the end of this year) wouldn't have the 'repayments' added to their own bills. They will though.

It's a grant but one where the Government will get their money back through a levy on fuel bills later on (irrespective of whether the people paying those bills were actually those in receipt of the grants).
It's what's known in the real world as 'a complete shambles'.

Tell the plebs something, anything, to get them off our backs then worry about the detail later, if ever.

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So that means a person may be paying back via the levy without actually seeing the discount in the first place (ie. the youngster who moves into their first flat a year after the £200 has been applied?)
is this the money back in april they mentioned on my council tax bill? that was 150 i thought/.
If you look at Chris's link @17.47 bednobs you will see it's £200.
I also thought it was £150.
so i looked online, and its 2 seperate things. one thing i dont get is this;
nergy suppliers will apply the discount to domestic electricity customers from October, with the Government meeting the costs. The discount will then be automatically recovered from people’s bills in equal £40 instalments over the next five years. This will begin from 2023, when global wholesale gas prices are expected to come down.
why give it to electricity users solely then pay it back when gas prices go down?
The guidance states that, "The scheme will be based on electricity meter points" and "It is a grant now with a levy on future bill payers."

I understand that to mean that if two adults move to two different addresses after their parents received the £200, they could end up paying £600 in levies between the three of them.

I have just e-mailed our Tory MP to see if my understanding is correct and if so, how he justifies it.
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If that’s the case, then this is actually *worse* than a loan, as potentially you could be paying back a grant you never took advantage of.
What a pointless exercise, that will no doubt be expensive to administer.
Exactly and the Government could, in theory, recover more than they paid out.
Folk cannot opt out because the reason given is it would be too complicated and expensive to administer such a scheme.

If my understanding about the levies is correct, it would be interesting to see if it is challenged in court.
Just stick the £200 in a jam jar and then pay it back out of it if you don't want to take advantage of it. Can't see why its such a big problem.
Folk can make a £200 payment to their fuel account if they want and then forget about it.

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