Massive transfer of tax payers money.

[scotview]

I was going to title this post as Massive transfer of wealth but change it to above.

During the pandemic there was a huge transfer of taxpayers money to various schemes, some of which were valid but a lot, in the cold light of day, seemed to be fraudulent and dishonest on a huge scale.

We now see more largess towards the public sector in the way of gold plated pensions, doctors on 2 day weeks, CPI pay rise demands.

Now we are seeing, potentially, monetary payments going straight to the public/businesses, hence into the coffers of energy companies as a result of electricity generation prices based on gas wholesale price, why ?

Seems to me the UK taxpayer is being absolutely hammered and I am not sure all this movement of dosh, in one direction is ethical, moral or honest.

Has our society lost something ?

I Found it difficult to put this into into a sensible, fair question but hope you get my drift.

[scrumpyjack]

We haven't yet seen the details but it seems what will happen is that the energy companies will borrow money to cover the difference between the market cost of energy (gas and electricity) and the current price cap level. These borrowings will then be repaid over 10 or 20 years from energy revenue after the current spike has subsided. HMG will guarantee the borrowings. So the spike in prices is being spread over many years, (assuming it is a temporary spike!)

It could be argued this is not a huge splurge of taxpayers money and by bringing the rate of inflation down sharply it will save HMG vast sums on government index linked debt and interest, apart from the other massive benefits of curtailing the current inflation spike.

[NotSure]

We haven't yet seen the details but it seems what will happen is that the energy companies will borrow money to cover the difference between the market cost of energy (gas and electricity) and the current price cap level. These borrowings will then be repaid over 10 or 20 years from energy revenue after the current spike has subsided. HMG will guarantee the borrowings. So the spike in prices is being spread over many years, (assuming it is a temporary spike!)

It could be argued this is not a huge splurge of taxpayers money and by bringing the rate of inflation down sharply it will save HMG vast sums on government index linked debt and interest, apart from the other massive benefits of curtailing the current inflation spike.

From what I read, it will be funded by government borrowing (deferred taxation....) rather than by handing the energy companies a blank cheque, but who knows?!