Do we trust the government to maintain the Energy Price Guarantee?

Ryan_Holden

Hi all, I've been mulling this over for a couple of weeks now.

Truss' government has input the EPG which, while still expensive, is a lifeline for millions. 

As a result, plenty of people on new, expensive fixes are preparing to give up their fix security (even if it's only 1 year) because their fix may still be a good 50% or more over the EPG price.

But, given this government has a history of U-turning and is not afraid of controversy (points to the Chancellor's mini-budget), do we think there's a chance they may renege on the EPG? I mean, gas is coming down so it makes the EPG less expensive. But the pound is 5% down today on where it was before making it more expensive again.

If they do renege on the EPG, millions who dump their expensive fixes in favour of the EPG may find their bills rocketting to the SVG predictions of £0.80 per kWh in the new year and £1 per kWh in the new spring.

Keen to get other people's opinion on this

Thanks,

Ryan

Astria

Well they've already got confused between "For 2 years" and "Upto 2 years", and also said it will be reviewed at the end of December (ie, when the next price cap is due), but whether this means "Is it still necessary" or something else, nobody knows.

Personally I wouldn't trust them, but if I stay on my fix it'll work out 8p/kWh more expensive, so that could be £16/month extra than the SVR, and gas does seem to be coming down which means electric should come down, so my fix doesn't seem as good as it would seem from the prior predictions.

Ryan_Holden

Astria said:

Well they've already got confused between "For 2 years" and "Upto 2 years", and also said it will be reviewed at the end of December (ie, when the next price cap is due), but whether this means "Is it still necessary" or something else, nobody knows.

Personally I wouldn't trust them, but if I stay on my fix it'll work out 8p/kWh more expensive, so that could be £16/month extra than the SVR, and gas does seem to be coming down which means electric should come down, so my fix doesn't seem as good as it would seem from the prior predictions.

See for me, my Electricity is 68.6 pence / kWh which is 16 pence / kWh more than the EPG which is significant. But I'm worried that in December she'll turn around and say it can't or won't go on and that it comes to an end, in which case the current forecast is for 80p / kWh on the SVT. And onto £1 in April next year. 

macman

I do not think they will renege on this. The more pertinent question is what they will do to support consumers in Autumn '24 as the 2 year deadline approaches, both for the end of the EPG, and the strong likelihood of a general election in October.
If wholesale prices remain high, then dropping all support would be electoral suicide. Assuming they haven't already committed electoral suicide by their fiscal policies...

brewerdave

Two different questions here . Do I trust this Government ? Absolutely NOT !!.
 But will they renege on the EPG by Sept.2024 ? No. Not unless the Tory party wish to commit hari kiri and cease to exist as a political force.

The_Green_Hornet

People worry too much.

ariarnia

Astria said:

Well they've already got confused between "For 2 years" and "Upto 2 years", and also said it will be reviewed at the end of December (ie, when the next price cap is due), but whether this means "Is it still necessary" or something else, nobody knows.

Personally I wouldn't trust them, but if I stay on my fix it'll work out 8p/kWh more expensive, so that could be £16/month extra than the SVR, and gas does seem to be coming down which means electric should come down, so my fix doesn't seem as good as it would seem from the prior predictions.

i think that means that if things drastically change and prices come down then the rates might be reduced and if other cost of living things keep going up then their might be another £400 or something paid via the energy bills now they've a way to do it (given the 150 seems to have not quite gone to plan). so people won't pay more than 2500 on average for 2 years but the current support might change in that time. and of course it can't be longer than 2 years if they're having an election in 2 years. and nothing is ever guaranteed if we have a new pm before then. 

dunstonh

But the pound is 5% down today on where it was before making it more expensive again.

Sterling is currently 0.5% up today.

SAC2334

Firstly if polls are anything to go buy there will be a Labour government in power before the "up to two years " ends , and secondly the wholesale gas price may drop like a stone if there is an end to both Putin and the gas supply weapon he s now using against Europe for supporting Ukraine 

I was paying 3.5 p a kwh for gas less than 2 years ago when the world was awash with gas and the  10.5 p a kwh which seems like a bargain at the moment compared to the thought of the Cornwall Insight nightmare predictions but its still ludicrously high compared to 2 years ago. 

wittynamegoeshere

SAC2334 said:

Firstly if polls are anything to go buy there will be a Labour government in power before the "up to two years " ends , and secondly the wholesale gas price may drop like a stone if there is an end to both Putin and the gas supply weapon he s now using against Europe for supporting Ukraine 

It's very unlikely that we or the EU would resume getting supplies from Russia even if there was a notional change of name plaque for the president, it will just be another member of the same mob and not much will change.

Germany is currently building LNG terminals to buy the same shipped gas that we currently use.  So they're going to be outbidding us for our supplies.

It's looking more like the cost was previously artificially low than than it is now artificially high.  Russia supplied cut-price gas to Germany to make them dependent, so hopefully unlikely to argue with them.  The plan didn't work, so they're not going to bother trying it again.

The current prices are probably here to stay, and the govt will be unable to perpetually borrow the amounts involved to keep the subsidies going.  IMO it's more likely that the cost per household will increase as a result of reducing subsidy than decrease as a result of falling prices.  They may or may not be able to keep the plates spinning for two years, two weeks is looking tricky at the moment.  There's no guarantee that Truss will be PM until the next election, or even next week.

Ryan_Holden

The_Green_Hornet said:

People worry too much.

I'm glad you're in a position where an energy bill at twice what it could be isn't worth worrying about. As a single homeowner, I assure you, I'm not.