MSE News: Energy price cap legislation to be revealed

in Energy
10 replies 2K views
Former_MSE_CallumFormer_MSE_Callum Former MSE
696 Posts
Third Anniversary 10 Posts I've been Money Tipped! Newshound!
✭✭
Draft legislation to bring in a price cap on standard variable energy tariffs will be revealed by the Government this morning....
Read the full story:
'Energy price cap legislation to be revealed'
OfficialStamp.gif
Click reply below to discuss. If you haven’t already, join the forum to reply.
Read the latest MSE News
Flag up a news story: [email protected]
Get the Free MoneySavingExpert Money Tips E-mail

Replies

  • donkdonk Forumite
    14 Posts
    does this include economy 10 tariff
  • SledgeheadSledgehead Forumite
    131 Posts
    Subject already covered in my post TOO RICH TO SWITCH
  • michaelsmichaels Forumite
    26.2K Posts
    Part of the Furniture 10,000 Posts Photogenic Name Dropper
    ✭✭✭✭✭
    MY tariff renewal is 27% higher this year, not because wholesale gas and electricity have gone up but because the govt is pandering to those who are too lazy to check the price of what they are buying so suppliers are covering themselves against having their ability to set prices constrained and are offering much less advantageous deals to those who can be bothered to shop around.

    On average company profits will not fall (unless they make a decent return they will not invest in the industry) so this just means less competition as prices end up all clustered very close together.
    I think....
  • SledgeheadSledgehead Forumite
    131 Posts
    michaels wrote: »
    MY tariff renewal is 27% higher this year, not because wholesale gas and electricity have gone up but because the govt is pandering to those who are too lazy to check the price of what they are buying so suppliers are covering themselves against having their ability to set prices constrained and are offering much less advantageous deals to those who can be bothered to shop around.

    And yet they will tell you the "market is broken".

    And these are so-called "conservatives" who are supposed to favour the free market and 'price discovery'. Shameful!

    Meanwhile they restrict land availability and pump credit and shared-ownership money into the property market, destroying price-discovery. their latest scheme aimed at distorting the property market will cost taxpayers a further £10bn. And as house prices rise so (necessarily) do rents.

    'Broken-market'. They haven't even an instinct for what it means.
  • Blackbeard_of_PerranporthBlackbeard_of_Perranporth Forumite
    7.6K Posts
    Eighth Anniversary 1,000 Posts Name Dropper Photogenic
    ✭✭✭✭
    So much for the free market, when the government impose its will. The consumer will lose in the end.
  • UKParliamentUKParliament Organisation Representatives - Private Messages may not be monitored
    749 Posts
    Seventh Anniversary 100 Posts Photogenic Combo Breaker
    ✭✭
    Today the Secretary of State for Business, Energy and Industrial Strategy, Greg Clark, made a statement in the Commons on retail energy.

    You can watch the statement on Parliament TV.
    logo-main.png

    A transcript of the statement will be available in Hansard at approximately 3pm today.
    Official Organisation Representative
    I’m the official organisation rep for the House of Commons. I do not work for or represent the government. I am politically impartial and cannot comment on government policy. Find out more in DOT's Mission Statement.

    MSE has given permission for me to post letting you know about relevant and useful info. You can see my name on the organisations with permission to post list. If you believe I've broken the Forum Rules please report it to [email protected]. This does NOT imply any form of approval of my organisation by MSE
  • Former_MSE_AndreaFormer_MSE_Andrea Former MSE
    9.6K Posts
    1,000 Posts Combo Breaker I've helped Parliament Rampant Recycler
    ✭✭✭✭
    Sledgehead wrote: »
    Subject already covered in my post TOO RICH TO SWITCH

    Thanks Sledgehead, that's really useful.

    We sometimes choose to start a new discussion as MSE Staff so people who don't know the forum very well understand the discussion is an official one dedicated to our news story on the subject. It can help them get used to the Forum.
    Could you do with a Money Makeover?


    Follow MSE on other Social Media:
    MSE Facebook, MSE Twitter, MSE Deals Twitter, Instagram
    Join the MSE Forum
    Get the Free MoneySavingExpert Money Tips E-mail
    Report inappropriate posts: click the report button
    Point out a rate/product change
    Flag a news story: [email protected]
  • ZTDZTD Forumite
    24.3K Posts
    ✭✭✭✭✭
    michaels wrote: »
    MY tariff renewal is 27% higher this year, not because wholesale gas and electricity have gone up but because the govt is pandering to those who are too lazy to check the price of what they are buying so suppliers are covering themselves against having their ability to set prices constrained and are offering much less advantageous deals to those who can be bothered to shop around.

    You're making the mistake of believing what the government says.

    Retail prices are indeed going up while wholesale energy hasn't. But if the energy companies were charging more, their profits would be higher - right? That extra money has to go somewhere. If their profits were higher, more companies would enter the market (barriers to entry are not high) and companies already in the market would be rolling in clover and not go bust http://www.mirror.co.uk/money/gb-energy-bust-wont-last-9351205 but quite obviously that's not happening.

    So what is happening? First, wholesale energy is not the only cost of retail energy. There are others which are important - the biggest of those being Government regulation. Some examples:
    1. Smart meters. FREE smart meters. FREE FREE FREE. Do you believe they're really free and a "Free Smart Meter" fairy is dropping them throughout the land? Or do you believe the actuality that its cost gets divvied up and dropped onto your bill?
    2. Green Levy. BG gave the game away on this one: http://www.dailymail.co.uk/news/article-4752948/British-Gas-blames-green-taxes-12-5-price-hike.html - but remember to not believe it until it has been officially denied.
    3. Schemes to improve the reliability of the Grid since intermittent renewables appeared on the scene. Schemes to produce electricity at short notice and whatever the cost https://www.theguardian.com/business/2016/dec/06/diesel-farms-national-grid-tax-breaks and schemes to use lots of electricity at short notice - http://www2.nationalgrid.com/UK/Services/Balancing-services/Reserve-services/Demand-Turn-Up/

    So, if all these Government Policies are being dropped onto people's bills and aren't being as invisible as the consultants and lobbists said they would be - what's a Government to do?

    Simple, blame the one of the usual suspects:
    • Greedy Fat Cats
    • Gnomes of Zurich
    • Unions
    • The Hun
    • White Slave Traders

    *delete as applicable/the ones that won't fly

    then enact legislation to "punish" the ones left. If people were thinking the Government would identify the root cause and fix the problem at its source - well... :rotfl::rotfl::rotfl::rotfl::rotfl::rotfl::rotfl::rotfl::rotfl::rotfl::rotfl:

    You can't deny politicians their opportunity to virtue signal with your money!

    So what's left? It's merely the age old tactic of "We've screwed up? And you've realised? Ermm...panic...erm. OH LOOK PUPPIES!!!"

    187144066.jpg?w=748&h=498&crop=1

    Or in this case "Oh look it's greedy energy companies - don't look at us trying to buy the green vote with your money."
    michaels wrote: »
    On average company profits will not fall (unless they make a decent return they will not invest in the industry) so this just means less competition as prices end up all clustered very close together.

    No, what will happen will those tariffs which are not protected will suffer for those which are. Initially, assuming there are going to be real cuts to the costs, that will mean fixed tariffs will rise when they're up for renewal, and more energy companies going bust if too many people have fixed terms.

    People over the medium term will just move to protected variable tariffs. There are however a group of customers who can't do that - commercial customers. If the cap is going to make a real difference, then expect to see a rise of unemployment
    "Follow the money!" - Deepthroat (AKA William Mark Felt Sr - Associate Director of the FBI)
    "We were born and raised in a summer haze." Adele 'Someone like you.'
    "Blowing your mind, 'cause you know what you'll find, when you're looking for things in the sky." OMD 'Julia's Song'
  • nic_cnic_c Forumite
    2.6K Posts
    Part of the Furniture 1,000 Posts Name Dropper
    ✭✭✭✭
    michaels wrote: »
    MY tariff renewal is 27% higher this year, not because wholesale gas and electricity have gone up but because the govt is pandering to those who are too lazy to check the price of what they are buying so suppliers are covering themselves against having their ability to set prices constrained and are offering much less advantageous deals to those who can be bothered to shop around.

    On average company profits will not fall (unless they make a decent return they will not invest in the industry) so this just means less competition as prices end up all clustered very close together.
    Do you mean its gone up because the BG collective has ended? Hmm nothing to do with the govt. BG clearly had the idea of a loss-leading or low profit collective to get them showing up on top of searches - it was extremely well subscribed, and unlikely to be able to be repeated. There was nothing close to it from other suppliers at the time.

    There is more than one way to cap a tariff - I fully expect there will be fudge that allows the companies to retain profits but be seen as some sort of limiting to be able to show that they are "helping" to reduce bills.
  • robin58robin58 Forumite
    2.8K Posts
    By the time it becomes law and Ofgem get thier hands on it, it will be as weak as American beer.;)
    The more I live, the more I learn.
    The more I learn, the more I grow.
    The more I grow, the more I see.
    The more I see, the more I know.
    The more I know, the more I see,
    How little I know.!! ;)
This discussion has been closed.
Latest MSE News and Guides