I’m about to propose something to make Daniel Davies cry. Specifically, it’s a solution to a problem we currently deal with by a cash transfer through the tax and benefit system. But I think I’ve made a good case that trying to deal with high energy prices by paying the poor to burn more energy is not sensible, except perhaps as temporary relief of the symptoms. Instead, I suggested, why don’t we pay them to insulate, or to install £1,895 air-source heat pumps, and get rid of the problem; after all, we subsidise the rich to do these things to their property. And I suggested that, if we’re too stingy or the government is short of cash, we could use the money now paid out as winter fuel payments.
Terrifyingly, there’s a chance someone might pick up on the idea – because it turns out they’ve got one like it in exciting America. Surely it’s got to be good. The Californian municipality in question is offering loans to carry out energy-saving improvements, to be paid back through property tax. I’m not quite sure how it works, although here are more details; but it seems to be restricted to homeowners, and I’m far from sure if the repayments are additional to the property tax you’d already pay or not.
My brilliant scheme has the distinction that, rather than the user repaying it, it’s repaid from the benefits they would otherwise claim. In a sense, it capitalises the stream of WFP cheques over ten years. Government gets to save on the benefit payments over and above the amortisation period of the heat pumps or insulation; the recipient gets to save hugely on heating; and society saves three to four units of energy from gas for every unit of electricity the heat pump uses. (The technology is wonderful.) And it hits the cheapest way of saving bulk CO2.
Here are some numbers. The two main groups of WFP recipients get £200 and £300 respectively; this is currently planned to go up quite sharply. (Another reason for my brilliant scheme is that tying bits of the government budget to prices that might rise without apparent bounds is stupid.) To be conservative, and also because I could have tried harder, here are some data from 2006. £1.98bn was spent. Elsewhere, it looks like 11,407,000 individuals received money, but the relevant number is a number of buildings not people. It seems 8 million households received WFP, which is a fair enough proxy. That gives us an annual payout per premises of £247.50; with a full-heating ASHP at £1,895, that’s a bit over seven and a half years to pay it off.
We’ve already got a list of recipients, and we write to them every autumn. Obviously there are people who don’t want to be bothered, and probably they are right, so we’ll give them the choice of fuel payments or [whatever silly name our friendly local special advisor comes up with]. Given the usual take-up rate for optional benefits, I’d reckon the pressure every year should be manageable enough; but if we felt militant enough we could make it voluntary-but-automatic.
One question I’d raise against myself is why this pensioner obsession. Don’t a lot of them own their homes? What about children? Well, for some reason they are the only group in our society we find it necessary to give special help with their energy requirements. Minister, I am a mere technocrat. I don’t bother my head with these things…but you might want to look at the numbers for some of the in-work benefit schemes.