The new Energy price ceiling of £2,500 - some questions on reflection about winners and losers.

Astria

MattMattMattUK said:

prowla said:

The cap is on the amount per unit and the £2500 is an example for some notional typical household.

Think of it as a discounted price on Mars bars, normally £1 but with a 50p discount.

Buying at the normal price:

• If you buy 1 it costs you £1.
• If someone buys 2 it costs them £2.
• If someone else buys 10 it costs them £10.

Buying at the discounted price:

• If you buy 1 it costs you 50p.
• If someone buys 2 it costs them £1.
• If someone else buys 10 it costs them £5.

So, the person who buys 10 is still paying 10x what you're paying.

There are no winners or losers - everyone is still paying proportionally the same.

The losers are those who have to pay for it in the future, the winners are those who do not. 

I would have thought the losers will be those who have paid extra from April to get a cheaper tariff now and so don't need the reduction so much, compared to those who have come off a fix recently to start paying significantly more, to now be told they'll be paying more or less the same as the people who fixed in May...

Energy has always been a gamble, and I don't think anyone expected the price cap to be basically be reduced to £2100 for most people, up from £1971, a £130 increase for the average home.

gj373

There are no winners. Only varying degrees of loss. The biggest losers are the as yet unborn taxpayers who will see no benefit but be paying this back over many years. It has always been thus.

lisyloo

Astria said:

MattMattMattUK said:

prowla said:

The cap is on the amount per unit and the £2500 is an example for some notional typical household.

Think of it as a discounted price on Mars bars, normally £1 but with a 50p discount.

Buying at the normal price:

• If you buy 1 it costs you £1.
• If someone buys 2 it costs them £2.
• If someone else buys 10 it costs them £10.

Buying at the discounted price:

• If you buy 1 it costs you 50p.
• If someone buys 2 it costs them £1.
• If someone else buys 10 it costs them £5.

So, the person who buys 10 is still paying 10x what you're paying.

There are no winners or losers - everyone is still paying proportionally the same.

The losers are those who have to pay for it in the future, the winners are those who do not. 

I would have thought the losers will be those who have paid extra from April to get a cheaper tariff now and so don't need the reduction so much, compared to those who have come off a fix recently to start paying significantly more, to now be told they'll be paying more or less the same as the people who fixed in May...

Energy has always been a gamble, and I don't think anyone expected the price cap to be basically be reduced to £2100 for most people, up from £1971, a £130 increase for the average home.

Yes, but it was the summer months and I think the gamble was worth it.
that section have lost a little, but not as much as future tax payers.

brewerdave

lisyloo said:

Astria said:

MattMattMattUK said:

prowla said:

The cap is on the amount per unit and the £2500 is an example for some notional typical household.

Think of it as a discounted price on Mars bars, normally £1 but with a 50p discount.

Buying at the normal price:

• If you buy 1 it costs you £1.
• If someone buys 2 it costs them £2.
• If someone else buys 10 it costs them £10.

Buying at the discounted price:

• If you buy 1 it costs you 50p.
• If someone buys 2 it costs them £1.
• If someone else buys 10 it costs them £5.

So, the person who buys 10 is still paying 10x what you're paying.

There are no winners or losers - everyone is still paying proportionally the same.

The losers are those who have to pay for it in the future, the winners are those who do not. 

I would have thought the losers will be those who have paid extra from April to get a cheaper tariff now and so don't need the reduction so much, compared to those who have come off a fix recently to start paying significantly more, to now be told they'll be paying more or less the same as the people who fixed in May...

Energy has always been a gamble, and I don't think anyone expected the price cap to be basically be reduced to £2100 for most people, up from £1971, a £130 increase for the average home.

Yes, but it was the summer months and I think the gamble was worth it.
that section have lost a little, but not as much as future tax payers.

My "gamble" will have cost me ~ £110 by October 1st, mostly on electricity tariff differences.

[Deleted User]

As there is no upper limit to a homes energy use that gets subsidised the winners are the higher than average users. From those in large detached homes to those in mansions with swimming pools and stables.

 

As the standing charges are not being subsidised and have been increased the losers are the lower than average users. From those out at work all day who live in small flats to those who minimise their energy use due to poverty.

As the subsidy is to all homes and not targeted at need the winners are the energy companies and the losers those who need more support and the tax payers paying for the government's largesse.

MWT

Deleted_User said:

As there is no upper limit to a homes energy use that gets subsidised the winners are the higher than average users. From those in large detached homes to those in mansions with swimming pools and stables.

 

... to the elderly living in poorly insulated bungalows...

Not every high user lives in a mansion... nor for that matter is every large detached home using higher than 'average' amounts of energy...

[Deleted User]

MWT said:

Deleted_User said:

As there is no upper limit to a homes energy use that gets subsidised the winners are the higher than average users. From those in large detached homes to those in mansions with swimming pools and stables.

 

... to the elderly living in poorly insulated bungalows...

Not every high user lives in a mansion... nor for that matter is every large detached home using higher than 'average' amounts of energy...

I would be surprised if many elderly living in poorly insulated bungalows use as much energy as mansions with swimming pools and stables.

And on average large homes use more energy than smaller homes and detached more than semi-detached, semi-detached more than terraced, terraced more than flats.

While the poor are losers regardless of if they live in a poorly insulated bungalow because it is a subsidy to the cost per kWh not a cash grant to spend on heating. The poor cannot afford the heating bill even with the subsidy.

maisie_cat

brewerdave said:

My "gamble" will have cost me ~ £110 by October 1st, mostly on electricity tariff differences.

Mine too £90 in my case, but at least I'm unlikely to need any "support" beyond the £400, by the time our fix expires the goalposts will have altered again.

[Deleted User]

There aren't that many massive mansions with swimming pools and stables, but there are a lot of under-insulated detached homes owned or occupied by people with lower and middle incomes.

I'd rather accidentally give the subsidy to some that don't need it, than deliberately not give it to people who do.

SnakePlissken

Miser1964 said:

You can also make the case that the capping of unit rates is also "unfairly" benefitting people who have chosen to live in the colder parts of the UK. Users of power to heat a cottage in Caithness will enjoy a larger subsidy in cash terms then a homeowner in Cornwall where it rarely freezes.

Someone will always feel they've been left with the thin end of the wedge

Someone could be born in caithness and have grown up and works in caithness,  in an average pay for caithness and therefore did not choose to live there, but grew up there.

 And let alone the issue of upping sticks and leaving family and freiends behind.  The  housing or rent, even a little further south in glasgow or edinburgh is more expensive, unless they have substantial savings, win the lottery or are in a very high paid job that allows a transfer to edinburgh, glasgow or even somewhere in England. 

Or do you check birth certificates for 'local people' in local houses and base charges that.

That would be complete bampotness.