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

Mstty

MattMattMattUK said:

[Deleted User] said:

A ‘plan’ is gaining momentum:

https://www.theguardian.com/business/2022/aug/15/centrica-and-octopus-back-plan-to-freeze-uk-energy-bills-for-two-years

Think of it as taking out a long-term mortgage to pay off our high energy bills over the short term.

I would not say it is gaining momentum at all, just that some people are making a bit of noise about it. 

I do not want to take out a long term mortgage to pay our high energy bills over the short term, firstly because that is awful financial planning, secondly because that makes the almost certainly wrong assumption that energy costs will fall significantly within that period and finally because the estimated £130-160 billion of cost would buy us ten large scale nuclear plants capable of generating 33,000 MWe of power which is more than our entire fossil fuel generation capacity of 31,000 MWe. Building those nuclear plants and the government funding them would be a far better use of £150 billion, it would reduce energy costs long term, dramatically increase our energy security, create a revenue stream for the government and hugely cut our carbon emissions. 

Yes but that doesn't benefit peoples pockets here and now so it's a non runner lol.

Short term pain for long term gain is not something recent generations will tolerate.

If it didn't come across correctly I agree with this being used for nuclear power and other green power generating projects.

MattMattMattUK

Chrysalis said:

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.

Energy has been too cheap for too long, people have got used to that in their consumption patterns, unfortunately cost is one of the few ways that people can be forced to change. 

Chrysalis said:

However I think both parties are now trying to not annoy the middle and upper classes by over targeting the help towards the poor,

Of course both parties are trying not to annoy the middle and upper classes, because those are the two groups that are going to be pay for any money the government throw around. AB groupings are well into being net contributors, the top third of C1 are net contributors, but the bottom two thirds of C1 and C2DE do not make a net contribution, so they are not being asked to fund this, they will be net beneficiaries from any discount/handout scheme, where as ABC1 will lose out overall. If you expect a group of people to fund something, or at the very least vote for you at the next election, the politically it is important to keep them on side.

Chrysalis said:
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.

The flat £400 does not benefit any household more than any other, because it is flat.

[Deleted User]

MattMattMattUK said:

Dolor said:

A ‘plan’ is gaining momentum:

https://www.theguardian.com/business/2022/aug/15/centrica-and-octopus-back-plan-to-freeze-uk-energy-bills-for-two-years

Think of it as taking out a long-term mortgage to pay off our high energy bills over the short term.

I would not say it is gaining momentum at all, just that some people are making a bit of noise about it. 

I do not want to take out a long term mortgage to pay our high energy bills over the short term, firstly because that is awful financial planning, secondly because that makes the almost certainly wrong assumption that energy costs will fall significantly within that period and finally because the estimated £130-160 billion of cost would buy us ten large scale nuclear plants capable of generating 33,000 MWe of power which is more than our entire fossil fuel generation capacity of 31,000 MWe. Building those nuclear plants and the government funding them would be a far better use of £150 billion, it would reduce energy costs long term, dramatically increase our energy security, create a revenue stream for the government and hugely cut our carbon emissions. 

Write to your MP. In truth, it doesn’t matter what people espouse on this forum (including myself), we don’t get a vote on any support plan. The truth is that the Government is sitting between ‘a rock and a hard place’ when it comes to any support that it puts on the table as this IFS release (dated 15 August) shows:

https://ifs.org.uk/publications/16150

I had just started my working life in the 1970s when inflation hit. It wasn’t the vulnerable that got the worst of it: it was the millions of people whose income sat just above the benefits line. Many were financially worse off than those on benefits.

MattMattMattUK

[Deleted User] said:

MattMattMattUK said:

[Deleted User] said:

A ‘plan’ is gaining momentum:

https://www.theguardian.com/business/2022/aug/15/centrica-and-octopus-back-plan-to-freeze-uk-energy-bills-for-two-years

Think of it as taking out a long-term mortgage to pay off our high energy bills over the short term.

I would not say it is gaining momentum at all, just that some people are making a bit of noise about it. 

I do not want to take out a long term mortgage to pay our high energy bills over the short term, firstly because that is awful financial planning, secondly because that makes the almost certainly wrong assumption that energy costs will fall significantly within that period and finally because the estimated £130-160 billion of cost would buy us ten large scale nuclear plants capable of generating 33,000 MWe of power which is more than our entire fossil fuel generation capacity of 31,000 MWe. Building those nuclear plants and the government funding them would be a far better use of £150 billion, it would reduce energy costs long term, dramatically increase our energy security, create a revenue stream for the government and hugely cut our carbon emissions. 

Write to your MP.

My MP is Steve Baker, a hardcore Brexiteer, climate change denier, who spent two years trying to get the UK to reinstate the Gold Standard. The only time he appears in his constituency is for a photo opportunity before quickly fleeing for somewhere else again. 

[Deleted User] said:
In truth, it doesn’t matter what people espouse on this forum (including myself), we don’t get a vote on any support plan. The truth is that the Government is sitting between ‘a rock and a hard place’ when it comes to any support that it puts on the table as this IFS release (dated 15 August) shows:

https://ifs.org.uk/publications/16150

I had just started my working life in the 1970s when inflation hit. It wasn’t the vulnerable that got the worst of it: it was the millions of people whose income sat just above the benefits line. Many were financially worse off than those on benefits.

Inflation at high levels is awful, but if anything that is an argument against the handouts, they are inflationary, as are Truss's proposed tax cuts. Unfortunately the Conservatives purged the economically literate from the party as part of their Brexit purity purges. Sunak and Hunt are pretty much the only two with any semblance of economic literacy and that is not exactly a ringing endorsement. I expect that the government will continue to take actions which makes inflation worse and further damages the economy, I fully expect some kind of trade war with the EU in the next year which they will use as an external enemy/distraction to attempt to hide from their own incompetence. 

pochase

Todays explanation where the money will come from.

https://news.sky.com/story/cost-of-living-crisis-households-underestimating-how-much-energy-bills-will-rise-research-shows-12674146

14billion from not paying out the £400 (which equates to 35 million households). That is almost 25% more households than the statistics show with 28.1 million households. I doubt that we have almost 7 million second homes.

If you use the correct number of households, it is only 11.24billion. But who cares about a gap of less than £3 billion in the financing just from this section, lets not talk about how good the estimates for windfall taxes are really, or if borrowing will really go down. This whole plan is just political and does not need to be financially correct as long as it puts pressure onto the new PM.

[Deleted User]

Dolor said:

The truth is that the Government is sitting between ‘a rock and a hard place’ when it comes to any support that it puts on the table as this IFS release (dated 15 August) shows:

https://ifs.org.uk/publications/16150

I'd like to see the IFS do an analysis on the proposals put forward by the Labour Party - both the 'costing' element - and the effect on different families.

BTW I noticed that the Labour Party have stated that would row back on the £400 grant (if they were making the calls), but has anyone seen any mention of whether they would also row back on the £300 uplift to the Winter Fuel Payment for pensioners or indeed any of the other elements that made up the May 2022 package yet to be paid out.

https://www.gov.uk/government/publications/government-support-for-the-cost-of-living-factsheet/government-support-for-the-cost-of-living-factsheet

pochase

They are only talking about the £400. Except of course if the £300 is the missing 3 billion, see above.

Max68

jimexbox said:

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.

Yes but those are the people who I am talking about.  Those who are on a low/minimum wage and don't currently pay tax or national insurance or those who don't qualify for Tax Credits.  Plus £100 will just about pay half a months bill somewhere.

brewerdave

This thread has drifted a mile away from the original title - the more I think about it , the more my conviction is the answer is a resounding  " NO" !!
The idea that the country's future should be even further mortgaged to protect the lazy/"head in the sand" portion of the populace, sickens me !! 

sienew

savers_united said:

This tiered approach is Interesting, but would you trust them to get it right. 
Essential use at a lower rate who would determine that? larger properties in colder parts of the country I.e Scotland would need alot more essential units than a flat in the south or even a similar sized property. 
You only get buy in if people believe its fair, as more switch to EVs is it fair they would be hit with higher charges, then you need to consider time of use, surely someone using majority of their electric overnight should not be treated the same as those using it at peak time when demand is already high.

Lots to think about, but with smart meters I think we would need more than a simple tier system so that people who use energy for the right reasons and at the right times don't feel unfairly treated. 

This is all 100% true. It's interesting but does need fleshing out much more. It would probably have to be per person, rather than per household (using the electoral register maybe?) and the affordable rate would have to enough for everyone basic needs across the country. It could also be tied to council tax bands. Smarter people than me could come up with some quite interesting ways to make this work.

That being said, it's probably not a system that could be done this winter (unless a similar effort was put into this as was to working on the covid crisis) so additional larger handouts to those on existing benefits and some to everyone else (basically up the £400 again) is probably the way forward this winter.