Sun claims 4 month freeze on April cap levels.

Section62

MattMattMattUK said:

Section62 said:

Part of the wild speculation this morning does include a proposal that the cost of a cap freeze could be recovered over time through increased standing charges (a payback period of 20 years was mentioned)

That would be grossly unfair, as it would saddle people with a fixed additional cost on their energy bill to pay for other people's variable consumption now.

...

The key thing is that whatever happens needs to be economically sound, will not cause excessive medium and long term damage to the economy and will also help reduce consumption. I do not care about fairness as it is entirely subjective, practicality and function is the important part. 

Unfortunately/fortunately, in a democracy it is impossible to exclude 'fairness' from the decision making process.

If we took a purist practicality/function approach to rising energy costs then there wouldn't be any of these schemes to help people with their bills - it would be a simple case of either being able to afford the energy you need, or not.

The speculative proposal to add a sum to future standing charges only exists because some people are subjectively deciding it is 'fair' that something is done to make bills more affordable (and as an outcome, help avoid other societal/health issues and costs).

Therefore it is imperative that whatever is done to make bills (subjectively) 'fair' doesn't create an outcome which is (subjectively) 'unfair'. (within the usual parameters of political and legal norms)

Also, from a practical perspective, lumping more and more additional costs into what is meant to be a charge nominally covering the energy network/distribution costs, will lead to the standing charge becoming discredited as not actually representing the thing it is claimed to be.

wild666

Then any increases due in Jan will be added to the increases they make so people won't win it will be just delaying an increase in fuel bills.

uksitebuilder

I do hope they don’t add it to the standing charge.  Media stories are arising saying it will be added to the national debt and clawed back through taxation.

Adding it to the standing charge would be deemed unfair as low usage customers would be paying the same amount for the "loan" as high usage customers. 

Alternatively, adding a little bit on top of the fixed unit rates would be a fairer way of repaying the debt IMHO

pineapple

On the Daily Mail they are reporting a freeze at £2,500 + keeping the £400 payout. https://www.dailymail.co.uk/news/article-11184991/Truss-shakes-hands-Queen-official-takes-PM.html

On that basis, as a small (frugal) household with below half the average bill, I should break even - maybe even make a profit

Spoonie_Turtle

Guardian specifically mentions people who've fixed, and people on prepayment meters.

https://www.theguardian.com/money/2022/sep/06/liz-truss-expected-to-freeze-uk-energy-bills-at-2500-a-year

deano2099

Section62 said:

MattMattMattUK said:

Section62 said:

Part of the wild speculation this morning does include a proposal that the cost of a cap freeze could be recovered over time through increased standing charges (a payback period of 20 years was mentioned)

That would be grossly unfair, as it would saddle people with a fixed additional cost on their energy bill to pay for other people's variable consumption now.

...

The key thing is that whatever happens needs to be economically sound, will not cause excessive medium and long term damage to the economy and will also help reduce consumption. I do not care about fairness as it is entirely subjective, practicality and function is the important part. 

Unfortunately/fortunately, in a democracy it is impossible to exclude 'fairness' from the decision making process.

If we took a purist practicality/function approach to rising energy costs then there wouldn't be any of these schemes to help people with their bills - it would be a simple case of either being able to afford the energy you need, or not.

The speculative proposal to add a sum to future standing charges only exists because some people are subjectively deciding it is 'fair' that something is done to make bills more affordable (and as an outcome, help avoid other societal/health issues and costs).

Therefore it is imperative that whatever is done to make bills (subjectively) 'fair' doesn't create an outcome which is (subjectively) 'unfair'. (within the usual parameters of political and legal norms)

Also, from a practical perspective, lumping more and more additional costs into what is meant to be a charge nominally covering the energy network/distribution costs, will lead to the standing charge becoming discredited as not actually representing the thing it is claimed to be.

I think "fair" is more complicated than that. Like, in the previous proposals, those on low incomes got more help than those who were not. No-one thought that was unfair. (I mean, I'm sure some hardcore libertarians did but you know what I mean).

You can extrapolate that forward: people not on a fixed tariff have higher bills, and therefore have less money. It's not that different to then focus the support on those that are worse off: ie. those on the SVT.

I do think it'd be unfair if those who fixed end up paying more for energy while the rest of us get help, but then I also saw it as unfair for exact the same reasons that when the only proposal was the £400, people who had fixes and weren't even being impacted were getting that as well as those who needed it. 

DaveMapp

Spoonie_Turtle said:

Guardian specifically mentions people who've fixed, and people on prepayment meters.

https://www.theguardian.com/money/2022/sep/06/liz-truss-expected-to-freeze-uk-energy-bills-at-2500-a-year

I fixed two weeks ago to protect myself from the January rise. I will now be paying well above whatever the new cap comes in as or will have to pay £150 to get out of the deal immediately after signing it….

Chrysalis

pineapple said:

On the Daily Mail they are reporting a freeze at £2,500 + keeping the £400 payout. https://www.dailymail.co.uk/news/article-11184991/Truss-shakes-hands-Queen-official-takes-PM.html

On that basis, as a small (frugal) household with below half the average bill, I should break even - maybe even make a profit

Yeah so the freeze might not be at the existing cap. I suppose thats a way of making it cheaper, it would mean me keeping agile 2018 would be the way to go for electric, not sure about the gas tracker v3 on those numbers though.

I really hope they keep the £400 on top of the freeze.  For lighter users the £400 is increased in value.

Krakkkers

Nothing has been announced yet has it?

The_Green_Hornet

Krakkkers said:

Nothing has been announced yet has it?

Nope. Best to wait until something appears on the Ofgem website.