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

k_man

sienew said:

mark_cycling00 said:

When you got your fix, you never considered how unfair it was on the 80% of the population who are unable to get a fix and will forever be stuck on variable rates?

It's not that 80% are unable to get a fix, it's usually that they don't want a fix. In many cases it's just that they don't realise the price increases coming or have their head in the sand (because accepting a fix would accept they will have a fall in living standards come October). 

Until very recently a lot of advice was to stay on SVT, as most of the fixes seemed very expensive.
SVT is the save money now option, and has been for a while

Hindsight has shown that many fixed really weren't that expensive, as predicted Oct rates have risen and risen.

spot1034

The £400 credit to all domestic bills is to help with the elevated cost of energy, and presumably this would have to be scrapped in such a scenario. As it has already been changed once, from a £200 loan to a £400 grant, I'd suggest that another change would really look like the government does not know what it is doing, with some justification, some might say. Planning for this scheme is also now pretty advanced. I think this will be allowed to continue and any further relief to consumers will be in addition. 

Mstty

mark_cycling00 said:

When you got your fix, you never considered how unfair it was on the 80% of the population who are unable to get a fix and will forever be stuck on variable rates?

Fixes were available everywhere. Except for one company then two when another removed all fixes for a couple of weeks to evaluate the price cap predictions.

Chrysalis

I fixed on agile 2018 and tracker v3 (I believe both are penalty free exits), but there is absolutely no question I support freezing the cap.

However if it is frozen there should be an indicator of how long its for so people can make informed decisions about their tariffs, I fear if they freeze they will only ever commit to a 3 month period at a time, just saying it will be reviewed again on the next cap announcement.

What do I think will happen?

No chance under Truss.
Sunak did cave under Labour pressure for the levy and cost of living payments, however this would be far more expensive, so hard to see a tory government doing this.

Note Truss is strong favourite to be new leader.

JIL

Dolor said:

JIL said:

No idea, but something needs to be done. Its awful the eye watering profits and the man on the street being in such a situation that they are seriously so worried.

What eye-watering profits? The profits are being made by the energy producers (ie; the companies that drill for oil and gas) not the suppliers that you have a contract with. These are international companies that work around the World owned by international shareholders. For example, bp is anything but British. It’s main shareholders are international financial investment houses.

The ‘good news’ is that these companies pay tax on their operations in the UK and its waters. Higher profits mean increased UK tax revenues. These are the taxes that pay for schools; the NHS; defence etc.

Governments have no money in their own right. The money they have comes from the taxes that they impose on businesses and individuals. The concept of a Welfare State doesn’t mean that the State pays for everything. There was considerable pain in the 70s when inflation reached 15%: sadly, I fear the same again.

Best have a word with Martin Lewis as he is horrified by the huge profits made by British gas, and whilst this is mostly energy production, it's still British gas. 

Yes governments dont have their own money, but it's how the government gain that money and how they redistribute it. That shouldn't include contracts to big donaters or friends.

Not sure about what the picture would look like now as compared to the 70s, we had a very different situation in that we had a coal industry and nationalised energy companies back then. 
You could say the perfect storm is now hitting home.

It's so difficult for the public to be reassured currently, the pm is on his second foreign holiday of the month, (he will have plenty of time to do that in September) and the two wannabe PMs are busy changing their minds to suit a small number of the electorate. 😉

nyermen

lisyloo said:

It was a gamble when people took the fix and they should have understood that.
so best advice is to understand the risks you are taking - always.

Agreed - although those who did would still have to pay the (presumably) large subsidy in taxes that will pay for the subsequent cap freeze as I doubt even british gas or scottish power could absorb the losses forever.

Marvel1

I never had an email about how to fix from British Gas (current supplier).   Most times I go to get a quote they won't give one. I'm prepayment, was looking at credit to compare.

brewerdave

lisyloo said:

It was a gamble when people took the fix and they should have understood that.
so best advice is to understand the risks you are taking - always.

But a huge Socialist Govt. intervention by effectively freezing the cap at very short notice, with OFGEM having already announced the programme for cap reviews, is a bit like a horse race starting with the favourite having its legs tied together!

brewerdave

mark_cycling00 said:

funny.money said:

mark_cycling00 said:

When you got your fix, you never considered how unfair it was on the 80% of the population who are unable to get a fix and will forever be stuck on variable rates?

How do you arrive at 80%?

A website called MoneySavingExpert. My memory wasn't perfect - it's 70%

"The energy price cap limits what firms can charge in England, Scotland and Wales for their default standard variable tariffs. It currently changes every six months, though that'll soon be every three. The vast majority of homes, over 70%, are now on it – pretty much everyone who isn't on a fix."

My suspicion is that the figure is considerably less then 70% now - not least because  the pressure from the Energy suppliers to take up a fix has been immense in the last 7-8 months.

Ultrasonic

macman said:

if you've recently switched to an (expensive) fix, you've not done it just because you thought it was still the cheapest option. You've done it because you wanted certainty of pricing for the next year, or whatever period you've locked into. Even if prices fall, you've still got that certainty. 
What you buy with a fix is essentially an insurance policy.

Whilst I'm sure this is true for some it definitely isn't true for all. My personal choice to take out fixed tariff contracts has always been about trying to save money.

I agree with the concerns raised at the start of this thread and have mentioned them myself in other thread previously. I really want to see a journalist raise this with Sir Kier Starmer and see what he has to say on the subject.

As well as the exit fee issue, I'm not sure the current terms of all fixed tariffs allow for customers to revert to the SVT with the same company, as opposed to the contract being ended by the customer transferring to a different supplier. Although possibly some of the experts here know if this must be an option?