MSE News: Government 'wants big six energy firms to hold prices'

in Energy
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  • MillicentBystanderMillicentBystander Forumite
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    adonis wrote: »
    If the politicians are so worried about how much energy is costing us, why are they not removing VAT from it?


    Then your income tax would increase and I'm suspecting that wouldn't go down too well? Increasingly looking like your income tax is going up anyway due to the imminent removal of green levies on utility bills. It's not like the Govt can simply stop taxing one commodity/service and not put it onto another is it?
  • magyarmagyar Forumite
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    Then your income tax would increase and I'm suspecting that wouldn't go down too well? Increasingly looking like your income tax is going up anyway due to the imminent removal of green levies on utility bills. It's not like the Govt can simply stop taxing one commodity/service and not put it onto another is it?

    No but at least income tax is progressive, as opposed to basically taxing the poor and rich equally.
    Says James, in my opinion, there's nothing in this world
    Beats a '52 Vincent and a red headed girl
  • SwipeSwipe Forumite
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    adonis wrote: »
    If the politicians are so worried about how much energy is costing us, why are they not removing VAT from it?

    I read that they'd get grief from the EU if they tried to
  • thorthor Forumite
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    I'm curious. When Ken clarke increased VAT on energy from 0% to 5% in the 90s was he pushed by Europe or did he give them the idea to foist it on everyone else? I remember him doing it but genuinely have no idea behind the motive as I don't class gas and electricity as luxuries anymore.
  • I_have_spokenI_have_spoken
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    Npower promises price freeze to 2015

    UK energy firm Npower says it will not raise prices any more until spring 2015 unless wholesale costs go up.

    The company introduced a planned price rise of 10.4% over the weekend, but it says that will be reduced, once it has worked out how much changes to government policy will save it.
  • magyarmagyar Forumite
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    undaunted wrote: »
    I think you've just answered your own query maygar - I can't see them doing anything that they don't have to / can justify not doing. It's no different to what would happen if wholesale / general prices had dropped really ie you got what you had asked for, a fixed price & would have had no grounds for complaint

    Now that we have seen the detail, it's clear to me that they SHOULD reduce everyone's energy bills (whether on fixed rate or not).

    What the govt have done is remove ECO but *add* an amount onto general taxation to compensate. So, in other words, if they don't reduce the bills of anyone who is on a fixed tariff, they'll be paying more.
    Says James, in my opinion, there's nothing in this world
    Beats a '52 Vincent and a red headed girl
  • According to the BBC news British Gas is to cut dual fuel energy bills by an average of £53 from 1st January.
  • MillicentBystanderMillicentBystander Forumite
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    I'm assuming this move will impact the competitiveness of the smaller suppliers who have no obligation to charge the green levies in the first place? Even the 8th largest supplier, first:utility have 'only' 190,000 customers and IIRC green levies only kick in at 250,000 customers. This doesn't sit well with Ofgem and the Govt's supposed aim to make the market more competitive I guess (as I'm sure the original plan to not charge small suppliers green levies WAS designed to increase competition). This is a minefield of an industry..
  • reeacreeac Forumite
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    The interest argument baffles me.

    With the 12 month DD cycle, the consumer owes the energy company as often as vice versa. However, the consumer is getting 6% off their bill, you'll be lucky to get 1% in a bank.

    If we want to avoid the situation where people are holding each others money why not whack everyone on a PPM. Consumption would plummet I'd imagine....

    The energy firms like to foist excessive DD charges onto their customers, leading to permanent credit [company owing consumer]. If you object then they'll usually climb down but they rely on customer passivity just like insurance firms quoting excessive premioms at renewal time.
  • magyarmagyar Forumite
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    reeac wrote: »
    The energy firms like to foist excessive DD charges onto their customers, leading to permanent credit [company owing consumer]. If you object then they'll usually climb down but they rely on customer passivity just like insurance firms quoting excessive premioms at renewal time.

    But as the previous poster said, people need to be careful what they wish for. In practice this is just like having money in the bank at 0% interest (much like... Erm... Having money in the bank).

    However to a utility this is pseudo-equity which it would otherwise have to borrow at about 6%, if we remove this from their sources of cash then their cost of borrowing may increase and this just pushes bills up - all so we can have money sat in banks doing nothing.
    Says James, in my opinion, there's nothing in this world
    Beats a '52 Vincent and a red headed girl
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