Energy Price Guarantee (announced 8 Sep): initial reaction & questions

[Deleted User]

Onebrokelady said:

[Deleted User] said:

Onebrokelady said:

[Deleted User] said:

SnakePlissken said:

Exacly, why wait until the winner was announced, bewteen them they could have made an announcement.

Depends if Rishi had different plans - unless they all wanted to do exactly the same thing they couldn't do anything specific.

SnakePlissken said:

And why not use a windfall tax like Europe is doing.

We already have one of those - it's what's paying your £400.

SnakePlissken said:

It appears as always to be about benefiting the 1% of top incomes in the UK. And getting the majority to pay the debt over the coming decade(s ?) Rather than hitting those who have made obscene profits from this. And for whom were there not a war in ukraine wouod not have been able to sell energy at such a high cost.

The big profits were not made by UK companies.  We can't go and tax overseas companies just because we don't like the price they sell things at.

SnakePlissken said:

And why is electricity not being decoupled from the gas price on the market?

They are trying to work out a good way do it, but if gas is use to make half of all electricity (v. rough numbers) then wouldn't you expect the price to be at least a little linked?

So is the £400 coming directly from the energy companies profit then,or have the government borrowed this money to be paid back later via taxes ,I'm confused 

The £400 is being paid for by the windfall tax on oil and gas producers.  Who do you mean by "energy companies"?

All the rest of the recent announcements - we don't know how that's being paid for yet.

I meant whoever it is that are reporting massive profits 

Saudi Aramco?

CNOOC?

Petrofac?

Gazprom?

[Deleted User]

Deleted_User said:

Deleted_User said:

So do I have this right?

 

A high energy user typically a better off household with a large home gets the largest amount off their energy bill in cash terms and due to standing charges in percentage terms. And will also be paid to reduce their energy use during peak hours. And the government plans to give them a big tax cut.

While a low energy user typically a low paid worker out at work all day who lives in a flat gets the smallest amount off their energy bill in cash terms and due to standing charges in percentage terms. Has little ability to get paid for reducing peak use due to low usage and being at work during the day and not wanting to disturb neighbours by say running the washing machine or vacuum at unsocial hours. And is going to get a tiny or non existent tax cut.

While the poorest households typically those unable to work due to illness or disability who are unable to afford the energy guarantee prices are left worried if this winter's direct handouts will be enough for them to afford to eat and heat, and worried that there is no mention of this winter's handouts being repeated next winter. And their benefits will go up less due to the energy price guarantee reducing headline inflation.

And the energy price guarantee gets paid for by borrowing to be paid back over the next 20 years through higher taxes. While taxes on the better off and businesses get reduced.

That's one way to spin it.

You could also say that a well-paid bachelor working in finance, and living in a new-build and well-insulated penthouse flat in London will not be using much energy and therefore only get a little saving.  But an older couple on a single income, with a child requiring specialist medical equipment, living in a poorly-insulated bungalow in a rural area will be using a lot of energy and therefore will get a much bigger saving.

Neither comparison is particularly useful.

Yes you could use atypical examples to try and spin it as not being regressive. But the reality is it is regressive. On average the better off receive the most help. As far as comparisons not being particularly useful the thread title says "initial reaction". My post was my reaction to the policy. 

philipbin

Deleted_User said:

Onebrokelady said:

Deleted_User said:

Onebrokelady said:

Deleted_User said:

SnakePlissken said:

Exacly, why wait until the winner was announced, bewteen them they could have made an announcement.

Depends if Rishi had different plans - unless they all wanted to do exactly the same thing they couldn't do anything specific.

SnakePlissken said:

And why not use a windfall tax like Europe is doing.

We already have one of those - it's what's paying your £400.

SnakePlissken said:

It appears as always to be about benefiting the 1% of top incomes in the UK. And getting the majority to pay the debt over the coming decade(s ?) Rather than hitting those who have made obscene profits from this. And for whom were there not a war in ukraine wouod not have been able to sell energy at such a high cost.

The big profits were not made by UK companies.  We can't go and tax overseas companies just because we don't like the price they sell things at.

SnakePlissken said:

And why is electricity not being decoupled from the gas price on the market?

They are trying to work out a good way do it, but if gas is use to make half of all electricity (v. rough numbers) then wouldn't you expect the price to be at least a little linked?

So is the £400 coming directly from the energy companies profit then,or have the government borrowed this money to be paid back later via taxes ,I'm confused 

The £400 is being paid for by the windfall tax on oil and gas producers.  Who do you mean by "energy companies"?

All the rest of the recent announcements - we don't know how that's being paid for yet.

I meant whoever it is that are reporting massive profits 

Saudi Aramco?

CNOOC?

Petrofac?

Gazprom?

What point are you trying to make ?

[Deleted User]

Deleted_User said:

Onebrokelady said:

Deleted_User said:

Onebrokelady said:

Deleted_User said:

SnakePlissken said:

Exacly, why wait until the winner was announced, bewteen them they could have made an announcement.

Depends if Rishi had different plans - unless they all wanted to do exactly the same thing they couldn't do anything specific.

SnakePlissken said:

And why not use a windfall tax like Europe is doing.

We already have one of those - it's what's paying your £400.

SnakePlissken said:

It appears as always to be about benefiting the 1% of top incomes in the UK. And getting the majority to pay the debt over the coming decade(s ?) Rather than hitting those who have made obscene profits from this. And for whom were there not a war in ukraine wouod not have been able to sell energy at such a high cost.

The big profits were not made by UK companies.  We can't go and tax overseas companies just because we don't like the price they sell things at.

SnakePlissken said:

And why is electricity not being decoupled from the gas price on the market?

They are trying to work out a good way do it, but if gas is use to make half of all electricity (v. rough numbers) then wouldn't you expect the price to be at least a little linked?

So is the £400 coming directly from the energy companies profit then,or have the government borrowed this money to be paid back later via taxes ,I'm confused 

The £400 is being paid for by the windfall tax on oil and gas producers.  Who do you mean by "energy companies"?

All the rest of the recent announcements - we don't know how that's being paid for yet.

I meant whoever it is that are reporting massive profits 

Saudi Aramco?

CNOOC?

Petrofac?

Gazprom?

It is the government's choice to not impose windfall taxes not inability.

According to Treasury estimates reported in Bloomberg, UK gas producers and electricity generators are set to make excess profits totalling £170 billion over the next 2 years.

The government has refused to release the Treasury report. And has stated the energy price guarantee will not be paid for through windfall taxes. 

[Deleted User]

philipbin said:

Deleted_User said:

Onebrokelady said:

Deleted_User said:

Onebrokelady said:

Deleted_User said:

SnakePlissken said:

Exacly, why wait until the winner was announced, bewteen them they could have made an announcement.

Depends if Rishi had different plans - unless they all wanted to do exactly the same thing they couldn't do anything specific.

SnakePlissken said:

And why not use a windfall tax like Europe is doing.

We already have one of those - it's what's paying your £400.

SnakePlissken said:

It appears as always to be about benefiting the 1% of top incomes in the UK. And getting the majority to pay the debt over the coming decade(s ?) Rather than hitting those who have made obscene profits from this. And for whom were there not a war in ukraine wouod not have been able to sell energy at such a high cost.

The big profits were not made by UK companies.  We can't go and tax overseas companies just because we don't like the price they sell things at.

SnakePlissken said:

And why is electricity not being decoupled from the gas price on the market?

They are trying to work out a good way do it, but if gas is use to make half of all electricity (v. rough numbers) then wouldn't you expect the price to be at least a little linked?

So is the £400 coming directly from the energy companies profit then,or have the government borrowed this money to be paid back later via taxes ,I'm confused 

The £400 is being paid for by the windfall tax on oil and gas producers.  Who do you mean by "energy companies"?

All the rest of the recent announcements - we don't know how that's being paid for yet.

I meant whoever it is that are reporting massive profits 

Saudi Aramco?

CNOOC?

Petrofac?

Gazprom?

What point are you trying to make ?

The poster asked who was reporting massive profits in the energy industry.

The broader point - we effectively gave away control of a lot of our energy sector years ago to foreign interests.  Deciding now that we need to tax them is closing the stable door when the horse is already in the knacker's yard.

philipbin

Deleted_User said:

The poster asked who was reporting massive profits in the energy industry.

Where did the poster ask who was reporting massive profits in the energy industry ?

Please show me

[Deleted User]

SparkyGrad: Who do you mean by "energy companies"?

Onebrokelady: I meant whoever it is that are reporting massive profits .

Directly in the nested quotes that you had in your previous post, which you have now conveniently removed for this one.

MattMattMattUK

Onebrokelady said:

wrf12345 said:

"I hate the government for doing this to us. I fixed because I had so much anxiety over the coming rises. Now they have come out with all this new confusing information last minute before 1st October. The government has known this was coming for months and should have decided then to put people minds at ease, but instead they were going on holiday or arguing over who should be prime minister. "
If you are fixed you can change to the new std tariff in Oct free of charge, if it is cheaper than your fix then why do you hate the govn, they have just saved you lots of money?

They haven't saved us anything ,we are still being charged much more than we were back in April ,they just scared everyone with news of massive bill rises in October and January then slipped in an cap at £2500 disguised as a reduction when it's actually still an increase , they've pulled a fast one and people are actually grateful. 

Whether they have saved someone much depends on their income level, higher rate and additional rate taxpayers will be the ones who pay for this overall, everyone else will get subsidised.

gt94sss2

Deleted_User said:

According to Treasury estimates reported in Bloomberg, UK gas producers and electricity generators are set to make excess profits totalling £170 billion over the next 2 years.

The Treasury said: "We don't recognise this analysis."

Whatever the actual figure is for these firms, most of the profit does not come from their UK operations which makes it problematic to tax.

withaspritz

John_Philip_Howarth said:

The_Green_Hornet said:

Update from the BBC --> https://www.bbc.co.uk/news/business-62878614

Energy companies will start to contact domestic customers within days about new energy tariffs - including information for those on fixed deals.

The government has said that many people on fixed deals will receive a discount equivalent to the support given to those on the price cap.

However, it does mean some who chose to fix at an expensive rate - expecting energy prices to rise sharply - will still pay more than others.

...

Domestic customers may also have chosen - before the announcement - to get ahead of price rises expected in the future by choosing a fixed tariff.

If that was more expensive than the new capped rate then the government has said these customers will receive the equivalent discount.

In precise terms, that is an automatic reduction in unit prices of 17p per kWh for electricity and 4.2p per kWh for gas - which is the equivalent of £1,000 or so for a household using a typical amount of gas and electricity.

So what happens if my fixed tariff is 38.37p/kWh for electricity which is more than the EPG and my gas tariff is 9.84p/kWh which is les than the EPG. This is on Eon online v14. The overall annual cost on my fixed tariff works out at £25 less than the EPG based on my usage. 

I’d be interested to know which fixed customers won’t get the per unit discount.

the gov website (https://www.gov.uk/government/publications/energy-bills-support/energy-bills-support-factsheet-8-september-2022)
says:

If you’re on a fixed tariff
If you’re on a fixed tariff at a higher rate caused by recent energy price rises, your unit prices will be reduced 

I fixed on 26th feb 2022 (Eonnext 2 year v18) at just above the April price cap rate. Wondering if I won’t be classed as a recent fix though?