The Institute for Fiscal Studies (IFS) has published a paper analysing whether the support packages implemented during the energy crisis of 2022–23 could have saved money if they were better designed.
The UK Government spent a sum equivalent to about 1.3% of the country’s annual GDP on its various packages to support households during the energy crisis. The report suggests that following a model like those implemented in Germany and Austria could have better de-incentivised the excessive consumption of energy by higher energy users and thereby reduced the huge cost of the scheme.
By subsidising energy costs, the paper concludes this was a reflection of the inability of government to direct payments more directly at households with less-adjustable energy needs, adding:
“In future crises, this challenge could be mitigated if the government were better able to integrate information from various sources to assess households’ vulnerability to shocks. Such an approach could also help address inequalities arising from policies such as raising energy taxes to meet carbon reduction targets.”
While energy prices have thankfully declined from the massive levels seen during the energy crisis, they remain considerably higher than pre-crisis levels and are likely to stay that way. This means that investing in insulation upgrades, thermostatic radiator valves and a modern boiler make even more sense than they did in pre-crisis times.
Xgas can provide heating engineers in Chester and other locations around Wrexham, so get in touch to learn about our services and financing plans.
