Liz Truss’ Energy Price Cap Will Benefit the Rich more than the Poor

State hand-outs for TNCs and more support for the rich – this is neoliberalism on steroids!

The New British Prime Minister, Liz Truss, recently announced her plans to help families and households through the current cost of living crisis.

The main policy to be introduced is an energy price cap which limits the average amount each household will pay capped at £2500.

NB this policy doesn’t mean that every household will pay a maximum of £2500 , that figure is the ‘easy to understand’ figure based on what the new price-per-unit of energy that OFGEM has to work with will be, which will mean an average house going forwards will be paying £2500 on energy until October 2023 (those calculations based on how much energy an average household has been using historically).

Of course if one ‘average household’ keeps the heating up at a toasty 25 degrees all winter they will still be paying more for energy than a similar household which keeps its thermostat at a more reasonable 18 degrees.

And so larger houses will be paying more than £2500, smaller houses and flats probably less than £2500.

HOWEVER, the cap on the unit-of-energy price still benefits the rich more than the poor, and. one simple chart from The Guardian shows how…

According to the figures above the following types of household save the following amounts per year with Truss’ new energy policy…

  • Detached houses save £1400
  • Semi-detached save £1150
  • Mid terraced save £950
  • Purpose built flats save £650

And as a general rule it is the wealthier and higher income earners who live in detached houses, while it’s the working and lower classes who live in mid terraced and flats.

So what we see here is that this Tory Policy saves the average wealthy household £750 a year more than the average poorer household.

This becomes clear when we see just HOW MUCH the richest households spend on energy, which was revealed in a recent 2022 report: A ‘Variable Energy Price Cap’ to Help Solve the Cost-of-Living Crisis by the National Institute of Economic and Social Research…

As you can see from the above the richest households spend almost twice as much on energy as the poorest households, which means any uniform energy price cap will benefit them proportionately more.

This is one of the reasons why the above report proposes a more nuanced policy approach of a variable cap and energy prices increasing the more households use, which would help the poor more compared to the rich and make the wealthier households contribute more to dealing with rising energy prices.

According to Bloomberg the current Tory policy could cost tax payers as much as £130 billion over two years, which is a CHOICE by a TORY to make the people pay rather than energy companies who are likely to make sufficient profit to be able to pay for the ENTIRE increase themselves and STILL make a decent profit on top!

The Tories allow the Corporations to Keep their Profits

According to UK Treasury figures Energy firms are expected to make an additional ‘unexpected’ £170 billion in profits over the next two years due to the increase in energy prices.

One policy the government could have pursued to tackle rising energy prices is thus to use a windfall tax on the two major UK energy corporations – Even just a 10% tax on £170 billion would raise £17 billion to help weather the storm.

However Liz Truss is part of the same Transnational Elite as the international energy companies. She used to work for Shell and she accepted a £100 000 donation from BP towards her leadership campaign.

And now she is repaying them by guaranteeing to allow them to keep ALL of their profits from this crisis, be effectively using tax payers money to pay them everything above the price cap for at least another year.

The most likely situation is that MOST of our

New Fracking and Oil Exploration Licenses

A more longer term policy (or lack of it) is to issue several new licences to allow firms to drill and frack for oil and natural gas in the North Sea and (probably) poorer parts of the United Kingdom.

Given Liz Truss’ pro-corporate and light regulation stance it’s unlikely these licenses will come with terms which see the profits from such resources go back to the people – far more likely is light regulation, low tax and profit extraction to distant lands.

Liz Truss’ Energy Policy – Relevance to A-level sociology

Probably the best fit for this material is within the Global Development module or the Theories part of Theory and Methods.

This policy is very much neoliberal – she is not taxing large corporations and giving out new licences for corporations to suck out our natural resources (NB we don’t have details, but I’m anticipating very lax regulation here).

We might even call this hyper neoliberalism – Truss is proposing a straight transfer of tax payer funds to Corporations – naked and visible and no effort to hide it, usually with pro-privatisation policies this is obscured, but not here.

Meanwhile her energy cap does little to help the poorest and more, proportionally to help the richest.

It’s also worth going back and reading Naomi Klein’s The Shock Doctrine – that seems to apply here – we have a crisis and the right wing use it to pass even more wealth to the rich…

So this evidence also suggests support for the Marxist view that the government, ultimately (or at least in its current form) works in the interests of the elites and Transnational Corporations.

Social Exclusion in British Tennis

So we’ve got a new Wimbledon Champion in waiting in the form of Emma Radacanu – but don’t get too excited, she doesn’t break the trend of the English Middle Class Norm. .

For a start, Radacanu grew up and started playing tennis in Canada, where social class is much less entrenched, and in any case her mother (Chinese) and farther (Romanian), neither of whom are from Britain originally, and both of whom work in Finance, are firmly part of the global middle class, who just happen to be resident in Britain ATM.

So she just carries on the middle-class tradition in British Tennis…. all the way back as far as I can remember until Tim Henman who was quintissentially middle class – home counties, dad a solicitor, privately educated, own tennis court in his back garden.

No, it seems that elite tennis just isn’t for the working classes.

There’s an interesting study from 2008 that explored why this is: Social Exclusion in British Tennis: A History of Privilege and Prejudice.

It explores the history using a literature review and ethnography in one local tennis club, and it’s the later I find the most interesting.

The author found that members of the club would enforce a set of social norms beyond playing the game that worked to exclude non established members – for example it was frowned upon to not have a drink after a game, but in the bar established members rarely spoke to newer members.

Appropriate etiquette was also a big deal, meaning appropriate middle class norms of behaviour.

It’s noted that the grass courts were kept open for any member and their children to be able to play on during the summer, but these were heavily policed by senior middle class women, and children had the lowest status in the club, they were hardly encouraged to play.

The ethnography doesn’t extend to professional tennis, which may well be class-neutral, but the point is, tennis clubs are one of the few means whereby people without their own tennis courts at home are going to be able to get into tennis, and this local tennis club blocked ordinary children from being able to do this.

The primary function of this club seemed to be for middle class women to exercise their power and status over others, through ignoring and excluding those they deemed to be inferior, which was pretty much anyone not like them.

Relevance to A-level sociology

This is quite useful for illustrating aspects of cultural capital theory and yet another reminder of how social class permeates so many aspects of British life.

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Contemporary Sociology of Education 2019-2020

Links to some contemporary sociology which students can use in their A-level sociology exams!

Links to some of the contemporary news items, documentaries and research studies which I’ve blogged about in 2019-2020, which are relevant to the sociology of education.

According to the AQA sociology specification, students are expected to be able to use contemporary examples to illustrate the points they make in their sociology exams.

Links to relevant blog posts….

If you want to know more about how to use contemporary sociology…. why not attend my revision webinar series…

Using contemporary examples to evaluate for theory and methods

A level sociology students should be looking to using contemporary examples and case studies to illustrate points and evaluate theories whenever possible. In the exams, the use of contemporary evidence is something examiners look for and reward.

Below are a few examples of some recent events in the news which are relevant to the theory and methods aspects of sociology

All of the above took place in either 2019 or 2018! 

Using contemporary examples to evaluate within the sociology of families and households

A level sociology students should be looking to using contemporary examples and case studies to illustrate points and evaluate theories whenever possible. In the exams, the use of contemporary evidence is something examiners look for and reward.

Below are a few examples of some recent events in the news which are relevant to the sociology of families and households. You’ll need to read the items for more depth on how to apply them.

All of the above took place in either 2019 or 2018! 

Using contemporary examples to evaluate the sociology of crime and deviance

A level sociology students should be looking to using contemporary examples and case studies to illustrate points and evaluate theories whenever possible. In the exams, the use of contemporary evidence is something examiners look for and reward.

Below are a few examples of some recent events in the news which are relevant to the sociology of crime and deviance. You’ll need to read the items for more depth on how to apply them.

All of the above took place in either 2019 or 2018! 

Using contemporary examples to evaluate within the sociology of education

A level sociology students should be looking to using contemporary examples and case studies to illustrate points and evaluate theories whenever possible. In the exams, the use of contemporary evidence is something examiners look for and reward.

Below are a few examples of some recent events in the news which are relevant to the sociology of education, you’ll need to read the items for more depth on how to apply them.

All of the above took place in either 2019 or 2018! 

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