Quarterly cap change proposed

Section62

agentcain said:

Section62 said:

agentcain said:

Ultrasonic said:

BobT36 said:

Why not let them all go bust? 

Well personally I'd still like to have someone to buy electricity and gas from...

The state?
If no one's there to sell, the state claims everything for the common good and becomes the middleman, even if it means that ofgem and the administrators have to actually do something useful.

Claims what?  The debts, the pension liabilities, expensive forward contracts, and leases on rented offices?

agentcain said:

I thought that was what COVID taught us; common good above personal gain?
Or maybe we're not all in this together anymore?

False equivalence.

The 'common good' could be served by having a diverse range of energy suppliers that compete against each other for customers and offer different (and innovative) products that meet the diverse needs of consumers.  Admittedly it is going to take a while before we see anything like that again.

So basically you're saying that the private energy providers offer no benefit whatsoever.

I've checked, but I can't see where I've said that anywhere.

agentcain said:

They have zero assets, no investments, no real estate, no ownership. Their profits go to private pockets, never to be seen again 

And that's better than nationalisation how? Just because every cowboy can become an energy supplier?

You are trying to turn this into a debate about State vs Private.  It is an old debate, and one which is usually rather pointless because the truth is we need something like "a bit of both".

The point I was making is that your suggestion the "state claims everything" relies on there being something to claim. In modern UK that's not how things usually work.  Not just in the private sector, the public sector is pretty good at divesting assets and racking up liabilities too.  Check whether you local council's staff are sitting in offices the council still owns for example.

Also, take a long hard look at the case of Robin Hood Energy.  Then we can have a discussion about whether the state is the perfect solution to the problem (whatever this problem really is).

agentcain

MattMattMattUK said:

agentcain said:

Section62 said:

agentcain said:

Ultrasonic said:

BobT36 said:

Why not let them all go bust? 

Well personally I'd still like to have someone to buy electricity and gas from...

The state?
If no one's there to sell, the state claims everything for the common good and becomes the middleman, even if it means that ofgem and the administrators have to actually do something useful.

Claims what?  The debts, the pension liabilities, expensive forward contracts, and leases on rented offices?

agentcain said:

I thought that was what COVID taught us; common good above personal gain?
Or maybe we're not all in this together anymore?

False equivalence.

The 'common good' could be served by having a diverse range of energy suppliers that compete against each other for customers and offer different (and innovative) products that meet the diverse needs of consumers.  Admittedly it is going to take a while before we see anything like that again.

So basically you're saying that the private energy providers offer no benefit whatsoever. They have zero assets, no investments, no real estate, no ownership. Their profits go to private pockets, never to be seen again 

And that's better than nationalisation how? Just because every cowboy can become an energy supplier?

Their profits are taxed, with profits then distributed via dividend, with many of the shares in the larger providers held by pension schemes, money does not disappear. 

There is no need for nationalisation, if the government really wanted to set a ceiling the easiest way would be to create a state energy provider and then anyone who could undercut them could, any company that could not would go bust. Nationalisation is never an answer by default, it has benefits in some sectors, it has negatives in others. The cost of nationalising the energy infrastructure in the UK would be hundreds of billions of pounds, something which I very much doubt the taxpayer has the appetite to pay for. When there are ways to improve the system with little cost to the taxpayer those should be taken first, rather than some ideological drive for nationalisation. 

If money doesn't disappear, explain why a raise in standing charges was needed to honour credit with failed suppliers. Have they spent more than they had? In that case, seize all profits until the debt is repaid. Isn't that how private debts are recovered? 

As for the cost of nationalising energy, we can start with the "350m per week to the NHS", which brought this government into power. 

Gerry1

agentcain said:

MattMattMattUK said:

agentcain said:

Section62 said:

agentcain said:

Ultrasonic said:

BobT36 said:

Why not let them all go bust? 

Well personally I'd still like to have someone to buy electricity and gas from...

The state?
If no one's there to sell, the state claims everything for the common good and becomes the middleman, even if it means that ofgem and the administrators have to actually do something useful.

Claims what?  The debts, the pension liabilities, expensive forward contracts, and leases on rented offices?

agentcain said:

I thought that was what COVID taught us; common good above personal gain?
Or maybe we're not all in this together anymore?

False equivalence.

The 'common good' could be served by having a diverse range of energy suppliers that compete against each other for customers and offer different (and innovative) products that meet the diverse needs of consumers.  Admittedly it is going to take a while before we see anything like that again.

So basically you're saying that the private energy providers offer no benefit whatsoever. They have zero assets, no investments, no real estate, no ownership. Their profits go to private pockets, never to be seen again 

And that's better than nationalisation how? Just because every cowboy can become an energy supplier?

Their profits are taxed, with profits then distributed via dividend, with many of the shares in the larger providers held by pension schemes, money does not disappear. 

There is no need for nationalisation, if the government really wanted to set a ceiling the easiest way would be to create a state energy provider and then anyone who could undercut them could, any company that could not would go bust. Nationalisation is never an answer by default, it has benefits in some sectors, it has negatives in others. The cost of nationalising the energy infrastructure in the UK would be hundreds of billions of pounds, something which I very much doubt the taxpayer has the appetite to pay for. When there are ways to improve the system with little cost to the taxpayer those should be taken first, rather than some ideological drive for nationalisation. 

If money doesn't disappear, explain why a raise in standing charges was needed to honour credit with failed suppliers. Have they spent more than they had? In that case, seize all profits until the debt is repaid.

They spent more than they had, so they went bust.  There aren't any profits.  All that's left are a few assets and unsecured creditors will probably only get a few pennies in the pound.  The cupboard is bare.

Sea_Shell

What about all the "newer" suppliers that are still going?   How many are left now, ex "Big 6"?

They all take their "cut" from the industry to pay salaries and overheads, so they must all have an effect on the industry taken as a whole, over and above having either a nationalised supplier or just a handful of "big" suppliers?

Lots of smaller suppliers need more staff (CEOs) than fewer bigger ones.

That money has to come from somewhere??

agentcain

Gerry1 said:

agentcain said:

MattMattMattUK said:

agentcain said:

Section62 said:

agentcain said:

Ultrasonic said:

BobT36 said:

Why not let them all go bust? 

Well personally I'd still like to have someone to buy electricity and gas from...

The state?
If no one's there to sell, the state claims everything for the common good and becomes the middleman, even if it means that ofgem and the administrators have to actually do something useful.

Claims what?  The debts, the pension liabilities, expensive forward contracts, and leases on rented offices?

agentcain said:

I thought that was what COVID taught us; common good above personal gain?
Or maybe we're not all in this together anymore?

False equivalence.

The 'common good' could be served by having a diverse range of energy suppliers that compete against each other for customers and offer different (and innovative) products that meet the diverse needs of consumers.  Admittedly it is going to take a while before we see anything like that again.

So basically you're saying that the private energy providers offer no benefit whatsoever. They have zero assets, no investments, no real estate, no ownership. Their profits go to private pockets, never to be seen again 

And that's better than nationalisation how? Just because every cowboy can become an energy supplier?

Their profits are taxed, with profits then distributed via dividend, with many of the shares in the larger providers held by pension schemes, money does not disappear. 

There is no need for nationalisation, if the government really wanted to set a ceiling the easiest way would be to create a state energy provider and then anyone who could undercut them could, any company that could not would go bust. Nationalisation is never an answer by default, it has benefits in some sectors, it has negatives in others. The cost of nationalising the energy infrastructure in the UK would be hundreds of billions of pounds, something which I very much doubt the taxpayer has the appetite to pay for. When there are ways to improve the system with little cost to the taxpayer those should be taken first, rather than some ideological drive for nationalisation. 

If money doesn't disappear, explain why a raise in standing charges was needed to honour credit with failed suppliers. Have they spent more than they had? In that case, seize all profits until the debt is repaid.

They spent more than they had, so they went bust.  There aren't any profits.  All that's left are a few assets and unsecured creditors will probably only get a few pennies in the pound.  The cupboard is bare.

So money did disappear. Most suppliers went bust in autumn, before the increased heating bills, when credit was high. And ofgem allowed this behaviour. 

And how exactly a quarterly cap review will help us on this issue I have no idea. Perhaps abandoning the idea of credit with suppliers is a better approach.

Mstty

If only we could believe that the quarterly cap will mean quickest cap reductions as well as increased caps.....but I fear the market will follow other fuels and be quick to increase and slow to decrease.

MattMattMattUK

agentcain said:

Gerry1 said:

agentcain said:

MattMattMattUK said:

agentcain said:

Section62 said:

agentcain said:

Ultrasonic said:

BobT36 said:

Why not let them all go bust? 

Well personally I'd still like to have someone to buy electricity and gas from...

The state?
If no one's there to sell, the state claims everything for the common good and becomes the middleman, even if it means that ofgem and the administrators have to actually do something useful.

Claims what?  The debts, the pension liabilities, expensive forward contracts, and leases on rented offices?

agentcain said:

I thought that was what COVID taught us; common good above personal gain?
Or maybe we're not all in this together anymore?

False equivalence.

The 'common good' could be served by having a diverse range of energy suppliers that compete against each other for customers and offer different (and innovative) products that meet the diverse needs of consumers.  Admittedly it is going to take a while before we see anything like that again.

So basically you're saying that the private energy providers offer no benefit whatsoever. They have zero assets, no investments, no real estate, no ownership. Their profits go to private pockets, never to be seen again 

And that's better than nationalisation how? Just because every cowboy can become an energy supplier?

Their profits are taxed, with profits then distributed via dividend, with many of the shares in the larger providers held by pension schemes, money does not disappear. 

There is no need for nationalisation, if the government really wanted to set a ceiling the easiest way would be to create a state energy provider and then anyone who could undercut them could, any company that could not would go bust. Nationalisation is never an answer by default, it has benefits in some sectors, it has negatives in others. The cost of nationalising the energy infrastructure in the UK would be hundreds of billions of pounds, something which I very much doubt the taxpayer has the appetite to pay for. When there are ways to improve the system with little cost to the taxpayer those should be taken first, rather than some ideological drive for nationalisation. 

If money doesn't disappear, explain why a raise in standing charges was needed to honour credit with failed suppliers. Have they spent more than they had? In that case, seize all profits until the debt is repaid.

They spent more than they had, so they went bust.  There aren't any profits.  All that's left are a few assets and unsecured creditors will probably only get a few pennies in the pound.  The cupboard is bare.

So money did disappear. Most suppliers went bust in autumn, before the increased heating bills, when credit was high. And ofgem allowed this behaviour. 

And how exactly a quarterly cap review will help us on this issue I have no idea. Perhaps abandoning the idea of credit with suppliers is a better approach.

No, the money did not "disappear", it was spent on operating costs. 

Most of the suppliers went bust before bills increased, but when the wholesale price of energy had increased dramatically, they were buying energy for more than they were selling it for, they burnt through reserves very quickly. I am not sure what you think Ofgem "allowed", but they have no power to stop a company going bust that is forced to sell it's product for less than it costs.

A quarterly cap will in theory mean prices should come down (as well as rise) quicker, as well as reduce the likelihood of suppliers going bust, reducing SoLR costs. In theory, within the concept of the cap it makes slightly more sense than the six month period, but the price cap itself does not make much sense. 

brewerdave

MattMattMattUK said:

agentcain said:

Gerry1 said:

agentcain said:

MattMattMattUK said:

agentcain said:

Section62 said:

agentcain said:

Ultrasonic said:

BobT36 said:

Why not let them all go bust? 

Well personally I'd still like to have someone to buy electricity and gas from...

The state?
If no one's there to sell, the state claims everything for the common good and becomes the middleman, even if it means that ofgem and the administrators have to actually do something useful.

Claims what?  The debts, the pension liabilities, expensive forward contracts, and leases on rented offices?

agentcain said:

I thought that was what COVID taught us; common good above personal gain?
Or maybe we're not all in this together anymore?

False equivalence.

The 'common good' could be served by having a diverse range of energy suppliers that compete against each other for customers and offer different (and innovative) products that meet the diverse needs of consumers.  Admittedly it is going to take a while before we see anything like that again.

So basically you're saying that the private energy providers offer no benefit whatsoever. They have zero assets, no investments, no real estate, no ownership. Their profits go to private pockets, never to be seen again 

And that's better than nationalisation how? Just because every cowboy can become an energy supplier?

Their profits are taxed, with profits then distributed via dividend, with many of the shares in the larger providers held by pension schemes, money does not disappear. 

There is no need for nationalisation, if the government really wanted to set a ceiling the easiest way would be to create a state energy provider and then anyone who could undercut them could, any company that could not would go bust. Nationalisation is never an answer by default, it has benefits in some sectors, it has negatives in others. The cost of nationalising the energy infrastructure in the UK would be hundreds of billions of pounds, something which I very much doubt the taxpayer has the appetite to pay for. When there are ways to improve the system with little cost to the taxpayer those should be taken first, rather than some ideological drive for nationalisation. 

If money doesn't disappear, explain why a raise in standing charges was needed to honour credit with failed suppliers. Have they spent more than they had? In that case, seize all profits until the debt is repaid.

They spent more than they had, so they went bust.  There aren't any profits.  All that's left are a few assets and unsecured creditors will probably only get a few pennies in the pound.  The cupboard is bare.

So money did disappear. Most suppliers went bust in autumn, before the increased heating bills, when credit was high. And ofgem allowed this behaviour. 

And how exactly a quarterly cap review will help us on this issue I have no idea. Perhaps abandoning the idea of credit with suppliers is a better approach.

No, the money did not "disappear", it was spent on operating costs. 

Most of the suppliers went bust before bills increased, but when the wholesale price of energy had increased dramatically, they were buying energy for more than they were selling it for, they burnt through reserves very quickly. I am not sure what you think Ofgem "allowed", but they have no power to stop a company going bust that is forced to sell it's product for less than it costs.

A quarterly cap will in theory mean prices should come down (as well as rise) quicker, as well as reduce the likelihood of suppliers going bust, reducing SoLR costs. In theory, within the concept of the cap it makes slightly more sense than the six month period, but the price cap itself does not make much sense. 

As in various loans to other Companies owned by the Directors ,you mean ??

MattMattMattUK

brewerdave said:

MattMattMattUK said:

agentcain said:

Gerry1 said:

agentcain said:

MattMattMattUK said:

agentcain said:

Section62 said:

agentcain said:

Ultrasonic said:

BobT36 said:

Why not let them all go bust? 

Well personally I'd still like to have someone to buy electricity and gas from...

The state?
If no one's there to sell, the state claims everything for the common good and becomes the middleman, even if it means that ofgem and the administrators have to actually do something useful.

Claims what?  The debts, the pension liabilities, expensive forward contracts, and leases on rented offices?

agentcain said:

I thought that was what COVID taught us; common good above personal gain?
Or maybe we're not all in this together anymore?

False equivalence.

The 'common good' could be served by having a diverse range of energy suppliers that compete against each other for customers and offer different (and innovative) products that meet the diverse needs of consumers.  Admittedly it is going to take a while before we see anything like that again.

So basically you're saying that the private energy providers offer no benefit whatsoever. They have zero assets, no investments, no real estate, no ownership. Their profits go to private pockets, never to be seen again 

And that's better than nationalisation how? Just because every cowboy can become an energy supplier?

Their profits are taxed, with profits then distributed via dividend, with many of the shares in the larger providers held by pension schemes, money does not disappear. 

There is no need for nationalisation, if the government really wanted to set a ceiling the easiest way would be to create a state energy provider and then anyone who could undercut them could, any company that could not would go bust. Nationalisation is never an answer by default, it has benefits in some sectors, it has negatives in others. The cost of nationalising the energy infrastructure in the UK would be hundreds of billions of pounds, something which I very much doubt the taxpayer has the appetite to pay for. When there are ways to improve the system with little cost to the taxpayer those should be taken first, rather than some ideological drive for nationalisation. 

If money doesn't disappear, explain why a raise in standing charges was needed to honour credit with failed suppliers. Have they spent more than they had? In that case, seize all profits until the debt is repaid.

They spent more than they had, so they went bust.  There aren't any profits.  All that's left are a few assets and unsecured creditors will probably only get a few pennies in the pound.  The cupboard is bare.

So money did disappear. Most suppliers went bust in autumn, before the increased heating bills, when credit was high. And ofgem allowed this behaviour. 

And how exactly a quarterly cap review will help us on this issue I have no idea. Perhaps abandoning the idea of credit with suppliers is a better approach.

No, the money did not "disappear", it was spent on operating costs. 

Most of the suppliers went bust before bills increased, but when the wholesale price of energy had increased dramatically, they were buying energy for more than they were selling it for, they burnt through reserves very quickly. I am not sure what you think Ofgem "allowed", but they have no power to stop a company going bust that is forced to sell it's product for less than it costs.

A quarterly cap will in theory mean prices should come down (as well as rise) quicker, as well as reduce the likelihood of suppliers going bust, reducing SoLR costs. In theory, within the concept of the cap it makes slightly more sense than the six month period, but the price cap itself does not make much sense. 

As in various loans to other Companies owned by the Directors ,you mean ??

If they were loans then they need to be recovered by the administrators, if they were disguised earnings then they need to be recovered under fraud prosecutions. Regardless the money did not "disappear", it will be obvious to the administrators where it went. 

Ultrasonic

Mstty said:

If only we could believe that the quarterly cap will mean quickest cap reductions as well as increased caps.....but I fear the market will follow other fuels and be quick to increase and slow to decrease.

The cap will follow the market, reacting to increases and decreases in price just as quickly. How the market may vary is a different question of course.