Gas price brake, electricity price brake, housing benefit increase: Economics Minister Habeck recognizes a “fire wall”. But the responsible authorities are apparently not sufficiently equipped to pay out the billions in aid in the new year. There is even talk of a possible “collapse”.
The traffic light turned green on Friday. The Federal Cabinet approved both gas and electricity price brakes, which still have to be decided by the Bundestag and Bundesrat in December. The leading Economics Minister Robert Habeck (Greens) celebrated the planned relief as a “fire wall against high price increases”. They are to be implemented by March 2023, but will also be credited retrospectively for January and February.
Of course, the best relief is only of use if it really goes down well with citizens and companies. There are doubts as to whether this will actually be the case in the spring. “Everyone will eventually get their money, but it will take time and mistakes will happen,” said Lutz Goebel, head of the Regulatory Control Council, of the “Welt am Sonntag”. The Regulatory Control Council is the federal government’s independent advisory body for reducing bureaucracy and making legislation.
Now, Goebel goes on to say, the fact that the digitization of the administration “simply messed up” is taking its revenge. In addition, the government often only gives those who have to implement the projects on the ground a few hours to comment on the draft laws. “This is definitely at the expense of quality,” criticized Goebel.
The system is too complex to be able to pay out easily and quickly. There are too many different payment methods from too many different offices. Everyone was talking about reducing bureaucracy. “But when it comes to the nitty-gritty, the federal, state and local governments stand in each other’s way.”
With the gas price brake, households and small and medium-sized companies are to be guaranteed a gross gas price of 12 cents per kilowatt hour for 80 percent of their previous consumption. For heat customers, the price should be 9.5 cents up to the 80 percent limit. The contract price should apply to the remaining 20 percent of consumption.
For industrial customers, the price per kilowatt hour is capped at 7 cents net. When it is warm, it is 7.5 cents net. In industry, however, the statutory prices only apply to 70 percent of annual consumption in 2021. The federal government estimates costs of around 56 billion euros for the gas and heat price brake, as the draft law shows.
The electricity price brake envisages that households and smaller companies receive 80 percent of their previous consumption at a guaranteed gross price of 40 cents per kilowatt hour. For industrial customers, the limit is 13 cents for 70 percent of previous consumption.
The electricity price brake is to be partly financed by skimming off so-called random profits. This also applies to producers of green electricity from wind and sun, who have recently benefited from high prices on the stock exchange. The energy industry is still critical of this skimming.
If you know which devices at home use how much electricity, you can make targeted savings. Our e-paper shows which devices consume how much electricity for all common household appliances, from ovens and hobs to refrigerators and washing machines to TVs and WLAN routers. There are also a number of instant power-saving tips.
It is also still unclear whether energy companies could possibly rip off the state if they increased their prices more than is economically necessary. Udo Sieverding, an energy expert at the North Rhine-Westphalia consumer advice centre, emphasizes that there is a ban on abuse in the draft law. “But who’s supposed to check that seriously? And besides, the providers were able to raise the price in January before the law came into force.”
On Friday, the Federal Council approved a far-reaching housing benefit reform. From January, households with low incomes will receive a rent subsidy of EUR 370 per month instead of EUR 180. According to Gerd Landsberg, general manager of the German Association of Towns and Municipalities, there is a risk of “a collapse of the housing benefit system well into the coming year,” as he told the “Welt am Sonntag”. Households that do not receive social benefits but still have little money can apply for housing benefit.
In the new year, significantly more people will be entitled to this government rent subsidy: two million instead of the previous 600,000. “We expect that there will be delays in the processing of housing benefit and thus also in the payment until mid-2023,” Landsberg told the newspaper.
North Rhine-Westphalia’s Building Minister Ina Scharrenbach (CDU) also expects massive delays and problems with implementation. Scharrenbach told the German Press Agency: “Right from the start, the federal government had the goal of pushing through the housing benefit reform with all its might. She will get a black eye herself.” There is a lack of staff to process the applications, and new employees can only be trained from mid-December.
“We assume that under the new law, housing benefit applications can only be approved from April 2023 and then retrospectively,” said the NRW Minister. A rush to the housing benefit offices is already noticeable.
With an electricity price brake the federal government wants to cushion the consequences of higher prices. In order to help finance this, surplus proceeds “due to the war and the crisis” are to be skimmed off. But a new report now suggests that this plan could be illegal.
For months, Germany discussed the continued operation of the remaining three nuclear power plants. Much more serious, however: Germany has delayed the expansion of the power grid – this could now take revenge. A view along the lines to the southeast of the republic.
The price spiral keeps turning. More and more municipal utilities will raise prices in the coming year. Rising energy costs are increasingly becoming an additional burden for households and companies. FOCUS online says which public utilities are affected and what you can do about it.
Also interesting for you:
The end of the weekend for the Black Friday campaign and Cyber Monday is already in sight: quickly stock up on the products you want from our selection that are still available. One or the other Christmas present is sure to be included!