Opposition proposals to freeze the price cap - fair for people who have fixed?

savers_united

Lots of ideas here but unfortunately you'll never get a one size fits all. 

And whilst there is alot of backing on here for targeted support to those on lowest income, the way prices are heading it is getting difficult to say for certain where that support should end, initially I think it was something like 8mil households were getting extra help as well as doubling winter fuel allowance for pensioners, but with the predicted caps coming October and January something like 50% of households will be classed in fuel poverty, so with each revision of the cap another few hundred thousand get dragged into this situation of not really having enough at the end of the month to pay for their energy without going into debt and having to cut back on other essentials. 

And I know its not the kind of thing people what to hear but there are families out there with 2 wages coming that also have alot of outgoings as well and something like £100 a month jumping to £300 a month is not just inconvenient it could put the family finances under severe strain when you have outgoings that those on benefits often don't face, School meals, mortgage, getting back & forth to work, maintaining a car, childcare, council tax etc etc. There are now so many border line households who will not get anything but will be in very difficult position come winter. So whilst freezing the cap or these long term loans may get a mixed response I am sure overall they will benefit more people than not and if that means that some millionaires also benefit then so what. At least no one falls between the cracks. 

jimexbox

Max68 said:

jimexbox said:

Raise the personal allowance, then make it none beneficial for those in the higher rate tax bracket by lowering when when the 40% kicks in.

This could be implemented quickly and its fair. 

If you are talking about tax personal allowances that's my point.   The standard Personal Allowance is £12,570.  Liz Truss's idea of cutting income tax etc does nothing to help those who earn under the allowance and does very little to help a lot of those on the basic rate.  What if you earn £8000, £11000, £15000, the current help doesn't touch the sides.  The water companies for instance (although they keep it quiet) offer a social tariff to anyone earning less than £16000 a year.  You can't even compare Council Tax because someone in a Band D house may earn £14000 whereas their next door neighbour may earn £30000.  That's all I am saying, the government can't just keep assuming that the vulnerable are only those on benefits.

Those claiming working tax credit can easily be targeted for extra help. Raising personal allowances could have a dramatic impact on those earning the minimum wage. You could put an extra 100 a month in their pocket. Same again if you included ni contributions.

You could easily negate this for high earners, so the impact is more equitable and affordable. I don't pretend to have every answer, it's easy to implement and will be beneficial for the low paid. 

sienew

savers_united said:

but with the predicted caps coming October and January something like 50% of households will be classed in fuel poverty

Targeting support to 50% of people is still targeted support. It also means that you give more to those who are on the lowest income and giving less to those who don't need quite as much. There will be those who can still easily afford their bills and not be worried at all, those who can afford them if they do a little cutting back, those who need support to stop these prices seriously affecting their lifestyles and those who need urgent help just to keep their heads above water this winter so support needs to account for the different groups needs.

Section62

savers_united said:

At least no one falls between the cracks. 

I think people who rely on LPG, oil, coal or wood for their heating may feel they are falling through the cracks if taxpayer's money is being used to subsidise the cost of gas, without similar help for them.

Freezing the electricity and gas caps would only be fair if equivalent measures are put in place to, in effect, regulate the maximum charges for other sources of domestic heat.

Or alternatively, only freeze the cap on electricity.

savers_united

sienew said:

savers_united said:

but with the predicted caps coming October and January something like 50% of households will be classed in fuel poverty

Targeting support to 50% of people is still targeted support. It also means that you give more to those who are on the lowest income and giving less to those who don't need quite as much. There will be those who can still easily afford their bills and not be worried at all, those who can afford them if they do a little cutting back, those who need support to stop these prices seriously affecting their lifestyles and those who need urgent help just to keep their heads above water this winter so support needs to account for the different groups needs.

In an ideal world yes, but as with alot of these things administration costs mean its often easier and cheaper to apply a blanket freeze.

Even with the different groups you highlight who would make the call if someone is struggling or not, someone with a decent income could have high levels of debt they need to service, large mortgage, big family etc etc. Maybe what they have left the end of the month is less than someone who will be getting support, these things can often be quite complex and cutting back not always something that one can do overnight if you have loans, credit cards demands you need to pay. 

Chrysalis

savers_united said:

As much as I don't like interference with the energy market I feel that something will need to give this winter. 
A new PM coming in with an opposition having a costed way of avoiding carnage for alot of people is going to be hard to avoid taking seriously.
Like I say I personally don't like the idea of politicians getting involved, but the situation is getting quite serious and for people to see energy companies (not necessarily suppliers) making these large profits I think Gov't will need to act.

As far as those who have fixed then its always a gamble you take, a few have been on here saying they are good for the next 2 years, you always have the option to leave and jump back onto the SVT if it works out cheaper, although labour's suggestion is a freeze for 6 months, so you would need to work out if sticking to a fix over the longer term is better.
Final point, those on a cheap fix in band D and below have received a CT rebate, and in line for a £400 Gov't grant, do you think that is fair when someone on a SVT may be facing a energy rate 40-70% more?? Its like all polictical decisions / budgets there are winners and losers. 

You dont think its already quite serious?

Also curious why you dont like interference you have investments in energy?

Sadly labours plan is only for 6 months not much of a commitment, which is a very awkward length, exactly half of a 12 month fixed tariff length.

Chrysalis

Ultrasonic said:

Dolor said:

Labour’s plan was first mooted by an energy supplier in the early part of this year. 

It is also notably a direct copy of what the Liberal Democrats proposed last week:

Scrap the energy price hike (libdems.org.uk)

Almost the same its a bit cheaper as Labour would scrap the £400 (lib dems would keep it).  Thats why Labours costings are lower.

sienew

Chrysalis said:

savers_united said:

As much as I don't like interference with the energy market I feel that something will need to give this winter. 
A new PM coming in with an opposition having a costed way of avoiding carnage for alot of people is going to be hard to avoid taking seriously.
Like I say I personally don't like the idea of politicians getting involved, but the situation is getting quite serious and for people to see energy companies (not necessarily suppliers) making these large profits I think Gov't will need to act.

As far as those who have fixed then its always a gamble you take, a few have been on here saying they are good for the next 2 years, you always have the option to leave and jump back onto the SVT if it works out cheaper, although labour's suggestion is a freeze for 6 months, so you would need to work out if sticking to a fix over the longer term is better.
Final point, those on a cheap fix in band D and below have received a CT rebate, and in line for a £400 Gov't grant, do you think that is fair when someone on a SVT may be facing a energy rate 40-70% more?? Its like all polictical decisions / budgets there are winners and losers. 

You dont think its already quite serious?

Also curious why you dont like interference you have investments in energy?

Sadly labours plan is only for 6 months not much of a commitment, which is a very awkward length, exactly half of a 12 month fixed tariff length.

This scheme is most advantageous to the providers of energy, which is why they almost all most support this scheme.

It's funny to me how those who have spent the last 3 months complaining about energy company profits are now loving a scheme that supports these same energy companies more than anyone else.

savers_united

Section62 said:

savers_united said:

At least no one falls between the cracks. 

I think people who rely on LPG, oil, coal or wood for their heating may feel they are falling through the cracks if taxpayer's money is being used to subsidise the cost of gas, without similar help for them.

Freezing the electricity and gas caps would only be fair if equivalent measures are put in place to, in effect, regulate the maximum charges for other sources of domestic heat.

Or alternatively, only freeze the cap on electricity.

We have a multi fuel stove for secondary heating and not finding wood anymore expensive than last year, coal is up around 25% per bag.

Not sure on LPG, but guess those prices have increased alot more, and is probably the easiest to cap, wood & coal would be very difficult and admin heavy. Friends who use oil have just bought in 1000litres and said it was not that bad and cheaper than Gas.

I dont think any of them have risen anywhere near the same amounts as NG, though. 

Chrysalis

Ultrasonic said:

I do think that if there is a price 'freeze' that the April price cap is probably too low a level for this, removing a desirable cost incentive for the better off to reduce energy consumption (for reasons both of the current supply issues and climate change).

If you think its too low then you are perhaps out of touch, the April price cap is already too high for millions in this country to manage.  The needs of the poor been able to eat and pay their bills probably trump the incentivization you mention considerably.  A social tariff at Oct 2021 prices or large COL payment would maybe satisfy both your requirement and the needs of the poorest.

However I think both parties are now trying to not annoy the middle and upper classes by over targeting the help towards the poor, Labour have definitely shifted when they previously moaned about owners of multiple properties benefiting from the £400, yet are now proposing a blanket cap freeze which would benefit those people much more.