Energy prices.... consumers need to get a grip.

antrobus

Cardew wrote: »

...
If the Government are so concerned, they could abolish the 5% VAT charge.

Sadly, they could not. EU regulations would not permit it.

Unreconstructed

It would be nice for once to have some clearly presented facts, as opposed to hysterical headlines from various parties merely intent on pursuing their own political agendas.

Cardew

antrobus wrote: »

Sadly, they could not. EU regulations would not permit it.

The lowest reduced rate of VAT is indeed 5%.

However this month the EU commission is launching a consultation on VAT. The current rules allow a Government to apply for a product or service to be zero rated as long as it doesn't 'distort competition' within the EU.

It is difficult to envisage how supplying UK customers with cheaper gas/electricity by zero rating VAT would 'distort competition'.

MillicentBystander

Cardew wrote: »

Not apologists, but simply trying to put profits into perspective.

Like you, I question the whole concept of energy and water privatisation, they are in a win/win situation - which reflects in the performance of their share price over many years.

However the 'hysteria' over greedy energy companies creates the impression that energy prices are hundreds of pounds too expensive.

If the Government are so concerned, they could abolish the 5% VAT charge.

I notice you didn't address the other points I raised in my post. Say you currently do your grocery shopping at Waitrose but decide to try Asda instead. Do you have to apply to Asda who then inform Waitrose you wish to switch allegiance? Do you then wait 8 weeks before you can step foot in Asda? In just about every respect it's a demonstrably awful comparison and I know you are intelligent to know this. Doesn't stop you trotting it out on a regular basis, though.

jimjames

C_Mababejive wrote: »

I agree with the OP. This country's energy markets are one of the most fiercely competitive in the world. People need to learn to put some clothes on when its cold instead of flouncing round the house in a t shirt.

I would also advocate fitting prepayment meters which would educate people and serve as a means of downwardly managing consumption.

And the first thing to ask anyone complaining about the cost of their energy bills is "Have you switched supplier?"

If you haven't made the massive saving from switching then it is pointless moaning about the price rises that are less than what you would save from changing supplier.

jimjames

Cardew wrote: »

If BG became a not for profit company(like Ebico) how much do you think prices would reduce?

And how would it affect millions of pensioners and pension funds that rely on the dividend income to pay pensions. It's easy to complain about profits but the vast majority of us have a stake in these companies one way or another and benefit from them doing well.

Cardew

jimjames wrote: »

And how would it affect millions of pensioners and pension funds that rely on the dividend income to pay pensions. It's easy to complain about profits but the vast majority of us have a stake in these companies one way or another and benefit from them doing well.

I am not advocating BG running at zero profit - I still have the few shares that 'Sid' sold me on privatisation - and we live in a Capitalist society.

I was merely pointing out that even with zero profits our utility bills wouldn't reduce by hundreds of pounds.

stevemcol

I'm quite annoyed at what the government are suggesting currently.
I enjoy the challenge of shopping around for the best energy deal. It also helps me keep tabs on how much energy I'm using and comparing to this time last year, etc. Forcing the lowest tarriff from the major suppliers will just push them to inflate the cheaper tarriffs and encourage unofficial price fixing.

I agree that there should be some protection for the poorest and perhaps there should be preferencial tarriffs for the old / infirm / those on income support etc.
The rest of us shouldn't have to pay a higher rate just to subsidise those who simply can't be ars3d checking out the comparison sites.

I wish Martin MSE would stop pushing his non scientific poll as an argument for single tariffs. 80% of those polled want one simple tariff. Well, funny old thing, but approximately 20% of consumers regularly switch. Let them enjoy their choice and let the rest take the first tariff they're offered.

It baffles me that people will make the effort to vote on a moneysaving internet poll but can't take another 2 minutes to tap some details into a comparison site that will actually save them some money!

There are easier ways to solve this problem: profit capping or windfall taxes based on profit.

I know, why not have a nationalised energy supply run not for profit. Now that would be revolutionary wouldn't it?

jimjames

Cardew wrote: »

I am not advocating BG running at zero profit - I still have the few shares that 'Sid' sold me on privatisation - and we live in a Capitalist society.

I was merely pointing out that even with zero profits our utility bills wouldn't reduce by hundreds of pounds.

Apologies if it appeared the reply was disagreeing with your post. I agree that it would make very little difference and it's frustrating that there seems to be a sector that assumes any profit is a bad thing.

grizzly1911

With vertical integration in the industry the return on the retail cannot be looked at in isolation of the wholesale arm where the bulk of the profits are generated.

The energy providers are always going to win with a captive constant demand. Any reductions we make are limited and will hit a floor at some point. As a PP has said the energy companies will increase unit price to balance to maintain margin.

On another thread differing taxation rates were cited as reasons for some countries appearing higher.

There are also many layered up costs that have nothing to do with supply such as switching commissions, account open and closing costs, marketing/tariff costs. Customer acquisition costs to hold market share.

If we look at the the profits top to bottom and strip out the environmental subsidies then I would expect my billl to fall by perhaps 15/20% minimum. PS I switch every 1 -2 years so cost all of us money.

A government minister on 5L on Thursday indicated that the price we pay for gas has increased 156% over the last 8 years. whilst the cost has increased by something like 100%.


http://www.bp.com/sectiongenericarticle800.do?categoryId=9037181&contentId=7068643

(Heren NBP Index)

I also accept that the utility companies aka as us get hit to subsidise those that cannot afford to pay - an indirect tax as the Government sidesteps it's responsibility.