Ofgem to increase Winter Price Cap to cover cost of people not paying their bills.

dealyboy

Chrysalis said:

Dolor said:

@Chrysalis

It wasn’t that long ago that we had riots on the streets when the Government of the day introduced an individual Community Charge (the Poll Tax). You would be placing additional costs on the just getting by working couple in favour of pensioners. I would vote for that but I doubt that my grandchildren would.

Governments of all colours have kept energy costs separate from taxation. I cannot see that changing.

How many times are people going to spend the Non Dom Tax? If we tax them, they will just move away to somewhere that doesn’t tax non doms. The richest man in the UK is now domiciled in Monaco and has his Ineos empire headquartered in Switzerland. 

Social tariffs would again increase the cost of energy to other users. If people genuinely need help to pay their bills it should be via the State benefits route.

Finally, you cannot run a country by a series of expensive public consultations each time someone wants to change something. We appoint representatives to do this for us. If we don’t like it, we vote them out.

For what its worth I think the poll tax was fairer than the current council tax.

But most adults live with at least one other adult and they think about themselves first.

I am not saying it was perfect, but it was more reasonable.

I do think we need to tax wealth, there is absolutely no question of that, interestingly I know a few comfortably tory voters who agree, shift taxation from income to assets.

There is nothing right that a multi millionaire can pay less tax simply because we too scared to tax wealth properly.  Regardless these things can be funded via fairer means (such as taxing the able instead of charging the poor more SC), its as always political willpower.

Also you mentioned diplomacy, but then are against HoP votes for approving decisions (by those representatives you mention).  If you think been able to vote in a undemocratic FPTP every 5 years is a means to reject it then I disagree.  We didnt vote in the current Ofgem crew.

But I appreciate you took the effort to read it and gave me some return points.

I do feel a big issue here is the fear of change, there seems to be a lot of regulars here who are acting as if not much is wrong with the energy sector, and as such are against radical changes.

Its the old saying, to fix a problem you first have to recognise there is a problem, there is some serious denial going on.

We could sweep it under the carpet and pretend only minor tweaks are needed, but as is happening now in the housing sector, that will only hurt long term as it destroys consumer spending power.

You make some good points (equals I agree  ) ... I just thought I would tell you as well as 'thanks'.

Qyburn

wrf12345 said:

Bad debt needs to come out of the energy companies profits 

Just harking back to that comment, bad debts DO come out of the suppliers profits. A supplier which manages to cut their bad debt will make more profit than one which doesn't. Or less of a loss.

I don't imagine there are any businesses in other sectors that would just sit on their hands while customers choose not to pay, until they go broke. Or any businesses compelled to continue supplying to non-paying customers.

MikeJXE

Are bad debts not linked to bad billing practices ?

Most people have no idea what's their energy is costing them and if they look at their account online it will usually show them in credit purely because DD are taken and bills are up to 6 months behind 

If customers received a bill at the date or just after the DD they would know where they stood and could take appropriate action

It's a bit like spending on a credit card, you buy all these goods willy nilly and then at the end of the month you are shocked at the cost and It is too large to be paid off in one go, too easy to get into debt thats why you see people on here with multiple £k debts asking how do I deal with this 

MattMattMattUK

MikeJXE said:

Are bad debts not linked to bad billing practices ?

Most people have no idea what's their energy is costing them and if they look at their account online it will usually show them in credit purely because DD are taken and bills are up to 6 months behind 

If customers received a bill at the date or just after the DD they would know where they stood and could take appropriate action

Almost all bad debts are people who refuse to pay over a period of many months, sometimes extending to years. Often they just stop paying entirely and suppliers do not start recovery for one bill that had insufficient Direct Debits to socer it. The six month billing cycle of British Gas and EDF is not ideal, but it is no barrier to knowing one's position. The issue is people can refuse to pay but the supplier cannot cut them off and their ability to recover the debt is severely constrained, often the supplier is required to write off some or all of the debt and what they do get back is unlikely to be anything close to the full amount.

MikeJXE said:

It's a bit like spending on a credit card, you buy all these goods willy nilly and then at the end of the month you are shocked at the cost and It is too large to be paid off in one go, too easy to get into debt thats why you see people on here with multiple £k debts asking how do I deal with this 

Most people spending on a credit card are fully aware of what they are spending, they either use the credit facility responsibility or they use it to maintain a lifestyle beyond their means.

[Deleted User]

Energy companies can still do debt recovery like other companies, and they are not out of pocket while they wait. Energy companies are sitting on £6.7 billion of customer credit which is not ring fenced, they are owed £2.5 billion of customer arrears. And that £2.5 billion arrears might include people who are billed in arrears, not late payments. So I do not see why they should get to up everyones charges to cover the cost of arrears, when they are being permitted to profit from accounts in credit. 

Now if they were required to ring fence customer credit and pay at least government gilt rates as interest on the credit to customers. Then I could understand the need to cover costs incurred by customer arrears. 

[Deleted User]

Alnat1 said:

From July PP meter customers will be charged the same rates as DD customers.  

Will those that think PP meters are unfair then accept that it's the best option for people who have debts with their energy company?

No. 
Energy companies should not be able to side step the law by making those who cannot be disconnected due to vulnerability, self disconnect via a PP meter. Energy companies have the ability to get debts recovered the same as other companies and directly from welfare benefits at a rate decided by law. 

pochase

If as you say the energy supplier is able to recover the debt by other means from a vulnerable person, why would the prepaid meter force the vulnerable person to self disconnect?

Either they have the money to pay the debt or they don't. As has been emntioned the repayment of the debt on prepaid is often as low as £3 per month. 

dealyboy

Whilst I am very much debt averse, I think it must be wrong for 'vulnerable' people to be on pre-pay meters at all.

There are all sorts of reasons why some people may be in that unfortunate category, but one is certainly not being feckless.

[Deleted User]

pochase said:

If as you say the energy supplier is able to recover the debt by other means from a vulnerable person, why would the prepaid meter force the vulnerable person to self disconnect?

Either they have the money to pay the debt or they don't. As has been emntioned the repayment of the debt on prepaid is often as low as £3 per month. 

Because PP meters are used to side step the law on disconnecting vulnerable people. And are used instead of repayment systems where the amount paid is dictated by law to in theory ensure the person has enough to live on. 

If you do not put money into a prepayment meter you do not get electricity. So lack of money causes self disconnection. Despite disconnection by the supplier being against the law for vulnerable people, due to health consequences. 

And if debt is being recovered by other means for example a direct deduction from welfare benefits then after debt repayment you are supposed to have enough money left for other essentials like food. The amount of deductions is limited by law. 

And for those people on welfare benefits incapable of managing their own money the DWP can manage utility bill payments for them. With the DWP dictating how much the energy company gets based not just on the bill but on what money that leaves the person to live on. And the money paid to the person can be paid split into smaller amounts for example weekly rather than for example in a monthly lump sum.

Spoonie_Turtle

Deleted_User said:

pochase said:

If as you say the energy supplier is able to recover the debt by other means from a vulnerable person, why would the prepaid meter force the vulnerable person to self disconnect?

Either they have the money to pay the debt or they don't. As has been emntioned the repayment of the debt on prepaid is often as low as £3 per month. 

Because PP meters are used to side step the law on disconnecting vulnerable people. And are used instead of repayment systems where the amount paid is dictated by law to in theory ensure the person has enough to live on. 

….

And if debt is being recovered by other means for example a direct deduction from welfare benefits then after debt repayment you are supposed to have enough money left for other essentials like food. The amount of deductions is limited by law. 

Just to point out the benefit levels are already set at the minimum level deemed sufficient for survival (whether that level even is sufficient or not is a matter of debate - rent amounts certainly aren't enough for privately rented homes).  Deductions for any kind of debt then take them below that minimum, which is why people end up behind on rent, reliant on foodbanks, and still can't pay for other essentials like utilities, school uniforms for children, medication not covered by free prescriptions, etc.