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

pochase

To make it even worse, this is a plan for 6 months, what happens than?

The 14 billion (more likely 11.3 billion as we don't have 35 million households)  from the £400 is used up, and windfall taxes are already used up until end of 2023. It is not just backdate them, there was talk that they need to borrow against the windfall tax as they will be using the income from it already to the end of 2023.

So we are in April, potentially a cap of £4200 (CI) up to £5400 (Auxilione) and all the money has been spend.

The_Green_Hornet

MattMattMattUK said:

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because at every point where I have been offered a fix it has been above the estimated future cap, the fixes are then withdrawn and the estimates go above the previously offered fix. 

I agree that suppliers were advising customers not to switch to them as they couldn't offer a better deal than the SVT but they certainly weren't recommending not to fix and in fact the two I am with were actively encouraging it with one offering a large credit to your account if you did so.

As for the government I don't really remember what their advice was about fixing and if you mean financial experts like Martin Lewis then all he did was slavishly follow events as they unfolded and at no time did he ever get in front of them.

I fixed as in my own personal judgement I only saw prices increasing in the short to medium term, and I am certainly no expert. Now if they freeze the SVT then this will be seen by some as a mistake but then hindsight is a wonderful thing and I certainly won't be losing any sleep over it.

Max68

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. 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 !!

With due respect that's ridiculous.  Even the "experts" didn't know whether to advise people to fix or not and some of the fixes were ridiculous.  Sure maybe I should have fixed a couple of months ago when Octopus were offering me over £200 month where it's now closer to £300 but does that make me lazy or an idiot or just one of the millions who just don't know what the hell to do for the best.  £200 was still unaffordable, that's the issue.  I was fixed but they went belly up, I fixed at a cheaper price because the experts advised it.  If you have fixed at an affordable price for your income then fine, good for you, but not every company was offering affordable fixes.

[Deleted User]

Section62 said:

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.

Yes of course, we don't know what the new PM will enact from whatever they have pledged on the campaign trail - removal of VAT, suspension of green levy etc.  So everything else mentioned in the May package will no doubt stay (if Starmer had his way).

sienew

pochase said:

To make it even worse, this is a plan for 6 months, what happens than?

The 14 billion (more likely 11.3 billion as we don't have 35 million households)  from the £400 is used up, and windfall taxes are already used up until end of 2023. It is not just backdate them, there was talk that they need to borrow against the windfall tax as they will be using the income from it already to the end of 2023.

So we are in April, potentially a cap of £4200 (CI) up to £5400 (Auxilione) and all the money has been spend.

We would be back to the same position, possibly even worse and even more shocking (as the rise would potentially be massive). Then we would have to borrow to continue the scheme, just kicking the can down the road. Although kicking the can down the road seems to be what Labour have recently been good at.

If the 28 billion would solve the problem longer term I would probably support it but 28 billion for a 6 month band aid that fixes nothing just doesn't make financial sense for the country. Even a band aid would probably need to last 3-5 years to be effective, certainly not just 6 months.

Sea_Shell

It seems like they've recruited Jonny Wilkinson to do the can kicking!!!

😲

wittynamegoeshere

If the govt deviates from its previously well-defined and published cap formula then they need to also...

• Remove all exit fees for those already on a capped rate.  People grudgingly signed up to these contracts as it was the worst of the possible options after weighing up against what the govt had previously said would be the case.
• Require that all energy suppliers provide a capped tariff, including the "green" ones that are currently exempt from providing one
• Alternatively, ensure that all customers that are currently with non-capped suppliers have the ability to move to a capped one.

My personal situation is that I was previously on a capped tariff, and last month volunteered to pay 39% more to move to GEUK.  I didn't do this out of generosity, I did it because this would be lower than the capped tariff from October onwards.  If they're changing the rules at the last moment then they've just turned my good choice into a bad one, I'll have wasted money effectively paying to insure myself against the rises that they were threatening me with.

Perhaps I'd be expecting too much to get a refund of the 39% extra I'll have paid for 2 months, but at the least they definitely need to provide a way for me to get out of the situation that their threats somewhat unwillingly pushed me into.

[Deleted User]

wittynamegoeshere said:

If the govt deviates from its previously well-defined and published cap formula then they need to also...

• Remove all exit fees for those already on a capped rate.  People grudgingly signed up to these contracts as it was the worst of the possible options after weighing up against what the govt had previously said would be the case.
• Require that all energy suppliers provide a capped tariff, including the "green" ones that are currently exempt from providing one
• Alternatively, ensure that all customers that are currently with non-capped suppliers have the ability to move to a capped one.

My personal situation is that I was previously on a capped tariff, and last month volunteered to pay 39% more to move to GEUK.  I didn't do this out of generosity, I did it because this would be lower than the capped tariff from October onwards.  If they're changing the rules at the last moment then they've just turned my good choice into a bad one, I'll have wasted money effectively paying to insure myself against the rises that they were threatening me with.

Perhaps I'd be expecting too much to get a refund of the 39% extra I'll have paid for 2 months, but at the least they definitely need to provide a way for me to get out of the situation that their threats somewhat unwillingly pushed me into.

Nobody forced you or others to go down the fixed tariff route. The Government has already U-turned on the loan and replaced it with financial help for all.

The only 'given' when the PM resigned was that the new PM was never going to be constrained by existing policies. Indeed, there is already talk that the £400 bung may be withdrawn from some high earners. Using your logic, they would also have a claim for being misled. If the Government forces suppliers to change existing contracts (ie; remove exit fees), then I have no doubt that they will be submitting claims to cover the charges that they will have lost.

All we can all do is see how this plays out. At the end of the day, you might have the last laugh.

ABFG

The problem is that the only real solutions that actually solve the problems take a long time to implement - a new fleet of nuclear power stations and a new domestic solar (ideally with battery) scheme. Energy costs are driving the inflation, not low interest rates. When one looks at the money that was spent post 2008 and during COVID, 7 new nuclear stations isn't all that much really. 

So we're stuck with short term financial tinkering for now, which is long term wasted money really (of course short term it is going to be essential). Tiered pricing seems the fairest way to do it on the surface - but where is the change in price tiers and how to control for electric only properties are details that would need better minds than we have on the problem.

The only other thing I can think is to use our new found status on the world stage to do deals we may not have been able to before. For instance, trade our defence capabilities with Australia or Qatar for example in exchange for LNG 'off the main market' as a direct deal. Somehow I doubt this will be possible.

Effician

A quick check over family ,friends & neighbours winter costs under the Starmer plan , the winner by a mile is little brother on svr with £120k+ income, & a high energy user , the loser is us as low users & a fix somewhere between April & Oct cap & ( by choice ) very low income.

As very low users it makes  little difference to us which way things pan out but on the whole in my circle it seems the better off /most wasteful & most able to deal with rising prices seem to come out on top with freezing the cap.

Edit ,  we will be about £12/ month worse off & lose the £400 so maybe more than a little difference to us