Energy price cap freeze on a fixed tariff

Ultrasonic

[Deleted User] said:

Ultrasonic said:

Deleted_User said:

Ultrasonic said:

The point of a government intervention on energy bills is to help everyone with the high prices. There is no political or moral logic to only trying to help those who hadn't transferred to a fixed tariff.

I'm with you on that, which is why I'd be more in favour of additional help by targeted (or widespread if you wish) cash help regardless of someone's tariff.  Triple the winter fuel allowance, or remove VAT from fuel, or introduce the "Liz's magic energy fund payment", or however you want.

Deciding that fixes aren't fixed, or that contract clauses no longer exist, pretty much means that the terms of a fix or contract could never be trusted again.  Why would you ever fix if it could suddenly be changed, or sign a contract if it could just be ignored?

I think those on a fix should be given the option to switch to the SVT without being charged exit fees. Nobody should be forced to do so and the energy company costs for anybody switching should be covered in the same way as they will be for the difference between the SVT and actual costs. I see no issue with future contracts if things are done in this way?

(I don't like the idea of a price cap fix at all and would like to see much more targeted support, potentially coupled with tiered unit pricing to help discourage high use. I can well believe that there simply isn't time to sort this now though.)

It would be signing up to a contract that has an exit fee in it, and then this fee being arbitrarily changed during the contract duration.  If a contract clause can be disregarded in this way, what's to stop a different clause being altered next time?  Or clauses being altered in other consumer contracts?  Your insurance contract suddenly having the excess changed half-way through the year, or fires suddenly being excluded from the cover?

Just because this change would appear to be the benefit of the consumer, it would still be setting the precedent that contract clauses can be retrospectively changed even when they are already in effect.

Why would it make any difference to the energy company whether it's the customer or the government who pays the exit fee? They're getting it either way, and the contract terms are being honoured.

[Deleted User]

Chrysalis said:

[Deleted User] said:

Zaul22 said:

Sorry if this has already been answered somewhere else in this massive thread, but is Truss expected to cap the unit rates just like Ofgem, or cap the total bill so for people paying £1200 ish on the 28p rate it would still be a massive increase?

Cap the unit rates to make the 'average user' cost £2500.  To something around 11p for gas and 35p for electricity if my maths was correct.

Its a just under 27% increase, so gas should be nearer to 9p.

That's not how the cap works, so I don't believe you.

[Deleted User]

Ultrasonic said:

Deleted_User said:

Ultrasonic said:

Deleted_User said:

Ultrasonic said:

The point of a government intervention on energy bills is to help everyone with the high prices. There is no political or moral logic to only trying to help those who hadn't transferred to a fixed tariff.

I'm with you on that, which is why I'd be more in favour of additional help by targeted (or widespread if you wish) cash help regardless of someone's tariff.  Triple the winter fuel allowance, or remove VAT from fuel, or introduce the "Liz's magic energy fund payment", or however you want.

Deciding that fixes aren't fixed, or that contract clauses no longer exist, pretty much means that the terms of a fix or contract could never be trusted again.  Why would you ever fix if it could suddenly be changed, or sign a contract if it could just be ignored?

I think those on a fix should be given the option to switch to the SVT without being charged exit fees. Nobody should be forced to do so and the energy company costs for anybody switching should be covered in the same way as they will be for the difference between the SVT and actual costs. I see no issue with future contracts if things are done in this way?

(I don't like the idea of a price cap fix at all and would like to see much more targeted support, potentially coupled with tiered unit pricing to help discourage high use. I can well believe that there simply isn't time to sort this now though.)

It would be signing up to a contract that has an exit fee in it, and then this fee being arbitrarily changed during the contract duration.  If a contract clause can be disregarded in this way, what's to stop a different clause being altered next time?  Or clauses being altered in other consumer contracts?  Your insurance contract suddenly having the excess changed half-way through the year, or fires suddenly being excluded from the cover?

Just because this change would appear to be the benefit of the consumer, it would still be setting the precedent that contract clauses can be retrospectively changed even when they are already in effect.

Why would it make any difference to the energy company whether it's the customer or the government who pays the exit fee? They're getting it either way, and the contract terms are being honoured.

Ah, so not waiving the fees at all, just getting them paid from another source.  If that's how it's structured and explained, then I'd agree with you.

Chrysalis

[Deleted User] said:

Chrysalis said:

[Deleted User] said:

Zaul22 said:

Sorry if this has already been answered somewhere else in this massive thread, but is Truss expected to cap the unit rates just like Ofgem, or cap the total bill so for people paying £1200 ish on the 28p rate it would still be a massive increase?

Cap the unit rates to make the 'average user' cost £2500.  To something around 11p for gas and 35p for electricity if my maths was correct.

Its a just under 27% increase, so gas should be nearer to 9p.

That's not how the cap works, so I don't believe you.

How does it work then?

Joyful

nicol2034 said:

It seems a possibility that Liz Truss will freeze the energy price cap, I jumped on Utility Warehouses £2950 tarrif a few weeks ago and I am concerned now that this has been a mistake and I will effectively be £1000 worse off. Anybody got any advice? Many thanks

Nicol We are being advised that you will not be worse off. If after Thursdays announcement the variable tariff is better, you will be able to move to it without any penalties. We just have to wait to see what transpires first.

Ultrasonic

[Deleted User] said:

Ultrasonic said:

Deleted_User said:

Ultrasonic said:

Deleted_User said:

Ultrasonic said:

The point of a government intervention on energy bills is to help everyone with the high prices. There is no political or moral logic to only trying to help those who hadn't transferred to a fixed tariff.

I'm with you on that, which is why I'd be more in favour of additional help by targeted (or widespread if you wish) cash help regardless of someone's tariff.  Triple the winter fuel allowance, or remove VAT from fuel, or introduce the "Liz's magic energy fund payment", or however you want.

Deciding that fixes aren't fixed, or that contract clauses no longer exist, pretty much means that the terms of a fix or contract could never be trusted again.  Why would you ever fix if it could suddenly be changed, or sign a contract if it could just be ignored?

I think those on a fix should be given the option to switch to the SVT without being charged exit fees. Nobody should be forced to do so and the energy company costs for anybody switching should be covered in the same way as they will be for the difference between the SVT and actual costs. I see no issue with future contracts if things are done in this way?

(I don't like the idea of a price cap fix at all and would like to see much more targeted support, potentially coupled with tiered unit pricing to help discourage high use. I can well believe that there simply isn't time to sort this now though.)

It would be signing up to a contract that has an exit fee in it, and then this fee being arbitrarily changed during the contract duration.  If a contract clause can be disregarded in this way, what's to stop a different clause being altered next time?  Or clauses being altered in other consumer contracts?  Your insurance contract suddenly having the excess changed half-way through the year, or fires suddenly being excluded from the cover?

Just because this change would appear to be the benefit of the consumer, it would still be setting the precedent that contract clauses can be retrospectively changed even when they are already in effect.

Why would it make any difference to the energy company whether it's the customer or the government who pays the exit fee? They're getting it either way, and the contract terms are being honoured.

Ah, so not waiving the fees at all, just getting them paid from another source.  If that's how it's structured and explained, then I'd agree with you.

Reading my post back I realise I could have written it more clearly but yes, that's what I meant by the energy company costs being covered.

[Deleted User]

Chrysalis said:

Deleted_User said:

Chrysalis said:

Deleted_User said:

Zaul22 said:

Sorry if this has already been answered somewhere else in this massive thread, but is Truss expected to cap the unit rates just like Ofgem, or cap the total bill so for people paying £1200 ish on the 28p rate it would still be a massive increase?

Cap the unit rates to make the 'average user' cost £2500.  To something around 11p for gas and 35p for electricity if my maths was correct.

Its a just under 27% increase, so gas should be nearer to 9p.

That's not how the cap works, so I don't believe you.

How does it work then?

;

At the moment there's a capped annual bill for someone who uses 0kWh of electricity (divide by 365 to get the standing charge), 3100kWh of electricity (minus the first amount and divide by 3100 to get the unit cost), 0kWh of gas, and 12000kWh of gas.  That's 4 different amounts, in pounds.

The relevant numbers for the October cap are about £170, £1700, £100 and £1800.  That's where the headline figure of about £3500 comes from - £1700 + £1800.

If the gov caps the headline figure to £2500, we don't know which of the four numbers they will change and by how much.

You can assume any set of changes to those four figures, and each will give you a different unit price.  Just applying a flat percentage, which is calculated after summating and averaging four different factors (and actually more which cover region, single fuel, payment method etc.) isn't now it's done.

spot1034

Joyful said:

nicol2034 said:

It seems a possibility that Liz Truss will freeze the energy price cap, I jumped on Utility Warehouses £2950 tarrif a few weeks ago and I am concerned now that this has been a mistake and I will effectively be £1000 worse off. Anybody got any advice? Many thanks

Nicol We are being advised that you will not be worse off. If after Thursdays announcement the variable tariff is better, you will be able to move to it without any penalties. We just have to wait to see what transpires first.

Except that the poster is already worse off having overpaid relative to the present SVT in good faith, assuming that this overpayment would be offset by a saving after Oct 1st.

Chrysalis

Deleted_User said:

Chrysalis said:

Deleted_User said:

Chrysalis said:

Deleted_User said:

Zaul22 said:

Sorry if this has already been answered somewhere else in this massive thread, but is Truss expected to cap the unit rates just like Ofgem, or cap the total bill so for people paying £1200 ish on the 28p rate it would still be a massive increase?

Cap the unit rates to make the 'average user' cost £2500.  To something around 11p for gas and 35p for electricity if my maths was correct.

Its a just under 27% increase, so gas should be nearer to 9p.

That's not how the cap works, so I don't believe you.

How does it work then?

;

At the moment, 

I dont see anything after moment is blank.  I just did the maths on the already announced figures though and interesting that both Electric and Gas go up by more than 80% from April to October.

However my mistake is I didnt take into account the SC barely moved so the unit rate increase would be higher than 80%.  For the same reason my 27% was done wrong.  I cant be bothered to do it again taking zero usage costs into account so just going to accept your 11p.

my 32-33p is probably also wrong for electric but someond calculated close to 35p which is probably the right figure for that.

tpeppers

michaels said:

I love the way people are being delighted to be bribed with their own money.  Any reduction will be paid for either through higher bills later or higher taxes.

As a broad generalisation, I think it's fair to say that those who use the most energy (i.e. subsidised energy that we'll all need to pay back via taxes) will themselves also pay the most taxes (as they are likely to be higher earners). So generally, as a whole, it is quite fair.