Will Rishi’s “loan-not loan” scheme do more harm than good?

Martin Lewis’ followers are backing Martin Lewis by four to one in his call to scrap the Treasury intervention in how we pay our fuel bills over the next five years.

In around October 2022: EVERY ELECTRICITY BILL will be reduced by a flat £200. There is no choice – YOU CAN’T OPT OUT. Prepay users will get the money via their smart meter, voucher, cheque or similar.

For those with small bills, the flat £200 will have a big impact; for those with big bills, a little one.

  • From April 2023: EVERY ELECTRICITY BILL will have a £40/year levy added to it, and that will happen for five years to effectively repay the initial discount. And in a reverse to October, for those with small bills, the flat £40 will have a bigger impact than for those with big bills.”

Large households in 2022 which disperse in 2023 will find those dispersing on the hook for larger repayments and households that come together will find they do well out of the scheme. If the scheme is broadly fiscally neutral to Government, it’s worth wondering why Martin is making such a fuss.

Why Martin’s up in arms (1) – this is creating uncertainty.

People don’t know what will happen in the future but this move is creating random winners and losers which is an unwelcome uncertainty to ordinary people.

Why Martin’s up in arms (2) – this is a gamble

Things could get worse not better, especially if the Ukraine situation gets worse. People don’t like gambling with fuel bills.

So Martin did a poll

Most readers (75%) said they wouldn’t opt-in to the scheme and more than half said they’d opt-out if there was a chance to do so before October.

“Our poll plainly shows most people aren’t willing to take this gamble. They don’t want to be a part of it – yet it is unavoidable. The state forcing people to do something against their will that is potentially damaging to their finances isn’t a good outcome. So, as I doubt it is technically possible to set up an opt-out scheme by October, in truth the best route for most is likely to scrap this scheme and come up with an alternative solution.”

I’m not one of the people who is going to get bothered about this loan scheme – but it’s not for the affluent, it’s for those who are or could be in fuel poverty. Martin always advocates tough love to those on low incomes and they love him for it. This is a case where they are telling him they don’t want a fake hand out from a “loan-not loan” scheme.

Sunak may feel he is right, I may think he is right, but when it comes to understanding and perhaps creating the views of those for whom  Sunak’s scheme is intended, it is their views that matter most.

Do Martin’s viewers represent those of a wider public or are they a clique of debt-phobic agitators?

Perhaps its time that Sunak got Martin Lewis into his kitchen cabinet to find out!

About henry tapper

Founder of the Pension PlayPen,, partner of Stella, father of Olly . I am the Pension Plowman
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