Does the cap help or has it exacerbated the crisis?

phillw

peter_the_piper said:

The cap is supposed to be the maximum a company can charge. I find it amazing that their costs suddenly go up so much they have to charge the maximum the cap is set  at.

According to octopus energy, their fuel costs are now 6 times what they were a year ago.

Which is amazing, but not in the way you were probably implying.

Octopus claim they won't make a profit this year.

ChaunceyGardiner

You are right, it was not as simple, it was much easier.

I could just fire up my computer, go onto a switching site, and check for the cheapest deal and initiate the switch. Not much more needed than entering your address and bank details.

Could easily be done in 15 minutes, going through the supermarket web sites to find who is cheapest takes longer.

My granny, who had worked as a nurse, so not exactly daft, could easily visits 2 or 3 shops, find the cheapest beans and buy them. I don't think she really understood what a computer was, never mind the internet.

macman

ChaunceyGardiner said:

macman said:

ChaunceyGardiner said:

michaels said:

The cap has helped make the UK energy market 'fairer', preventing those who are too lazy to shop around from being fleeced for their laziness.

That's rather unfair. Plenty of people are not in a position to switch, because their landlord won't allow it, or they have complex meters, or they don't understand the system, due to being elderly, or of low intelligence etc.

Your landlord cannot prevent you switching supplier. It's the choice of the bill payer.

I realise that. But many don't. As I understand it, landlords can insist that you switch back to the original supplier at the end of the tenancy, which is another hassle.

No they cannot. The only issue around switching is if the tenant switches the metering from credit meters to PPM's, and is maybe required to revert them on leaving, but this is far less relevant with the advent of smart meters.
The LL has no more control over your choice of energy proviider than they do over your choice of telcom provider.

daz378

The cap is protecting  us to certain extent...businesses  have no cap...their costs have gone through the roof

pochase

ChaunceyGardiner said:

You are right, it was not as simple, it was much easier.

I could just fire up my computer, go onto a switching site, and check for the cheapest deal and initiate the switch. Not much more needed than entering your address and bank details.

Could easily be done in 15 minutes, going through the supermarket web sites to find who is cheapest takes longer.

My granny, who had worked as a nurse, so not exactly daft, could easily visits 2 or 3 shops, find the cheapest beans and buy them. I don't think she really understood what a computer was, never mind the internet.

But she was not able to visit you and ask you for help? And you did not offer her to help her getting on a cheaper tariff?

We are talking here about the 80% who know what a computer is and are on the internet, but never bothered to put any thought into fixing.

michaels

daz378 said:

The cap is protecting  us to certain extent...businesses  have no cap...their costs have gone through the roof

The cap is delaying rather than preventing rises which means that a fix looks like bad value as it is higher than the current cap rate hence hardly anyone fixed earlier this year. 

In a competitive market fixes are generally equal value to staying on the SVR but give certainty and hence would have protected people from the latest unexpected increases, but were an impossible sell when it meant going from a 4p/18p cap to a 6p / 28p fix for the next few months.

ChaunceyGardiner

But she was not able to visit you and ask you for help? And you did not offer her to help her getting on a cheaper tariff?

Of course, but she wouldn't hear of it. She was loyal to the company that had connected her home to the grid when she was a child. She preferred to pay quarterly by Giro in the bank, so fixes were out too.

[Deleted User]

ChaunceyGardiner said:

But she was not able to visit you and ask you for help? And you did not offer her to help her getting on a cheaper tariff?

Of course, but she wouldn't hear of it. She was loyal to the company that had connected her home to the grid when she was a child. She preferred to pay quarterly by Giro in the bank, so fixes were out too.

So, choosing not to engage with the system.  Difficult to set up a system to assist people who deliberately choose to want nothing to do with it.

ChaunceyGardiner

So, choosing not to engage with the system.  Difficult to set up a system to assist people who deliberately choose to want nothing to do with it.

If the majority of people want nothing to do with it, perhaps the system itself is flawed?

michaels

ChaunceyGardiner said:

So, choosing not to engage with the system.  Difficult to set up a system to assist people who deliberately choose to want nothing to do with it.

If the majority of people want nothing to do with it, perhaps the system itself is flawed?

Lots of people don't bother to shop around for car insurance, mobile phone, broadband, groceries.  Should the govt provide all of these and set the prices?

The cap has broken the market, people have been disincentivised to fix and suppliers have been prevented from hedging beyond the next 3/6 months both of which have cost 10s or 100s of billions; all because people are too lazy to spend 5 minutes shopping around for a big expenditure item so the govt had to protect them.