In a meeting of the core cabinet, Prime Minister Alexander De Croo presented a proposal for a basic gas package. This would see households pay a fixed price for basic gas consumption with anyone who consumes more paying more.
The intention is to keep the system simple so that it is ready for winter and can be granted as a discount on the advance bills for everyone who does not benefit from a social tariff. Some in the government feel that such a basic package should not be granted to the highest earners. The specifics of the proposal still need to be clarified.
De Croo expressed his desire to do everything possible so that families can continue to pay their rising advance bills and are not cut off from the gas network. He has previously insisted that any meaningful solution must be found at the EU level and that Belgium alone is unable to tackle the issue. This latest proposal seems to provide evidence to the contrary.
A basic package should provide immediate relief for the middle classes. The 1 million families that benefit from the social tariff, which was extended until the end of March 2023, will not be eligible for the basic package.
Saving this winter
Extending the social tariff to the middle class is still under consideration; yet, this would take much longer to put in place. Even if the government approves an extension week, it would take months before the measure can be applied – far too late for this winter. To this end, De Croo is aiming for a quick intervention to keep gas bills affordable.
Critics argue that only granting a discount to those who heat with gas threatens to anger those who heat with electricity or heating oil. In these cases, a concession would need to be worked out.
In addition, the measure would come at a considerable financial cost. A basic gas package alone is expected to cost at least €1 billion. This could easily rise to between €1.5 and €2 billion. After the economic blow of the pandemic, this would be a difficult burden to take on in addition.
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On Monday, the core cabinet outlined the plan to get through the winter. Apart from measures to boost household purchasing power, the government plans to support companies that are also suffering from high gas prices.
To this end, some of the flexibility with regard to temporary unemployment and bridging rights that were implemented during the pandemic might be reintroduced. A new moratorium on bankruptcies is also on the table alongside some leeway on paying social security contributions and other business taxes.
