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

Max68

Dave, With due respect. Not everyone who is struggling to pay their bills and who are on lower wages are lazy and have their head in the sand.

brewerdave

Max68 said:

Dave, With due respect. Not everyone who is struggling to pay their bills and who are on lower wages are lazy and have their head in the sand.

Then WHY are they still on the SVR after the best part of a year's worth of warnings from all parts ? There have been exhortations from Government, Press and others to protect their future bills by fixing their unit costs. So because they haven't bothered, there is a threat to punish those who have been responsible by freezing the cap at everyone's future expense !!

sienew

brewerdave said:

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 !! 

This is simply wrong. There are many who are going to struggle this winter that probably work harder than most people here, to tar everyone with the brush as "lazy" is terrible. Minimum wage/lower wage people often have jobs that are long hours and physical work. It's not just the unemployed who will struggle to pay an almost £4,500 average energy bill come Spring. Some charities are suggesting 50% are going to be in financial trouble because of their bills this winter, most who are already working incredibly hard to get by and support their families.

And yes, I do accept there are some in this country who are lazy or have their head in the sand. But this goes FAR FAR beyond these people.

The advice in general for the past year has been to stay on the SVT. Fixes have generally been in line with - or often - above the predictions for the next price cap rise... it's just that the price cap predictions have literally been rising every week.

MattMattMattUK

jimexbox said:

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. 

Lots of groups could be easily targeted for extra help, pensioners, those on Jobseekers, even additional rate taxpayers if they wanted. 

jimexbox said:
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.

We already have the highest tax free allowance of any EU country or any major economy, tax cuts are not the answer here, they are also inflationary which will make the current situation worse.

jimexbox said:

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. 

High earners already make a large contribution, so net they will still be paying in a lot. The issue arises when the cost of targeting exceeds the utility of the money saved and the administration needed to cover exceptions. Not all pensioners are poor, unemployed people get more jobs, people with tight budgets increase their hours, WTC has a lag and is a poor system to start with, people move in an our of higher and additional rate taxes based on one off bonuses etc. Then their is the political reality that asking higher earners to fund this, but giving them nothing is almost entirely political suicide for the Conservatives and would not help Labour when seeking to win in 2024, hence why both parties proposed an element of universality (the £400 from the Conservatives, the price freeze for all from Labour).

We are in (or will technically be in) a recession before the end of the year, realistically because of the global economic climate we are almost certainly at the start of a global economic depression and the UK will feel that worse than most due to the short term nature of our politics as well as Brexit. There will be a drop in living standards for nearly everyone, just as there was in previous recessions and depressions, that is part of life unfortunately, society cannot insulate people against that. 

The_Green_Hornet

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.

Isn't this just the original £200 "buy now pay later" loan scheme but on steroids?

And that scheme was about as popular as a Corbyn Labour government.

EssexHebridean

Ultrasonic said:

If we're talking about alternative options I'm personally drawn towards the idea of tiered unit prices to provide a minimum of energy at an affordable price but then higher prices beyond this to help incentivise a reduction in energy use. Potentially with the tiers varying with council tax band to factor home size into it. Support for pensioners and those with specific health needs that dictate higher energy usage could get additional support.

The Octopus etc idea to me is disincentivising energy usage reduction by fixing at too low a level given the current situation, and like other plans appears to be predicated on prices coming down long term - which may not happen.

How does this work for those using electricity for heating because that is there only option though? We use 4700kWh p/a - and for an electrically heated property that is on the low side too - but we're still above the "typical use" figure by a long way. Add in that we're in a relatively low CT band, so presumably would see a below "typical" level applied, too. Making anything above that typical use level charged at a vast premium is still going to mean that for a lot of people, the choice comes down to heating or eating. (There are still huge areas of the UK where the GCH that so many people now consider to be "the norm" just isn't an option - and in some of those areas the weather conditions tend to mean that even higher usage is just normal). 

MattMattMattUK

brewerdave said:

Max68 said:

Dave, With due respect. Not everyone who is struggling to pay their bills and who are on lower wages are lazy and have their head in the sand.

Then WHY are they still on the SVR after the best part of a year's worth of warnings from all parts ? There have been exhortations from Government, Press and others to protect their future bills by fixing their unit costs.

The general line from the government, industry and financial experts was to stay on the SVR as the fixes were not good deals, the advice has been the exact opposite of what you claim. 

brewerdave said:

So because they haven't bothered, there is a threat to punish those who have been responsible by freezing the cap at everyone's future expense !!

For most it is not a case of having not bothered, but having followed the advice given by nearly everyone. I have not fixed and am on the SVR not because I am "lazy" but because at every point where I have been offered a fix it has been above the estimated future cap, the fixes are then withdrawn and the estimates go above the previously offered fix. 

Section62

DerwentMailman said:

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.
 

The BBC's totally unbiased coverage of this story yesterday included this graphic - Note the "*".  Details of what the "other pledges" are hasn't been clarified AFAIK.

Keir Starmer calls for extra windfall tax to freeze energy bills

https://www.bbc.co.uk/news/business-62542541

sienew

The_Green_Hornet 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.

Isn't this just the original £200 "buy now pay later" loan scheme but on steroids?

And that scheme was about as popular as a Corbyn Labour government.

Yes but they are selling it as being paid for by a windfall tax on the evil evil energy companies. The headlines don't really talk about most of the cost needing to be paid back or the fact that the companies being taxed will probably just increase prices to consumers to cover the extra tax burden.

Section62

pochase said:

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.

See my previous post.

The £14Bn isn't from just scrapping the £400, there are other (unspecified) "pledges" which would be scrapped as well.