Energy prices £250 cheaper a year - my electric only £8.83 cheaper??

MattMattMattUK

Chris_b2z said:

MattMattMattUK said:

You conveniently chose not to post the important subsequent paragraphs of his post.

The problem is Ofgem is responsible for A and the government is responsible for B.

Yet these things don't usually work in concert (I've an imminent meeting with Sec of State for energy where I will be pushing for just that) so Ofgem will struggle to decide to drop standing charges without factoring in the vulnerable high users because it has no power to do anything about that independently.

So it would have to decide to drop standing charges, and hope the govt does something, but that is unlikely to be a route regulators can base their decisions on. Which is why I'm worried unless the two act together, nothing will happen.

I agree Martin gets a lot right, but he does also like the occasional populist crusade as well, he jumped on this bandwagon and jumped on the WASPI (WASPE) bandwagon as well, both are a great way to get some devout followers, both are great marketing positions, neither are rational policy decisions.

I share Martin's frustration that he is unlikely to succeed.
I can also understand why the industry would prefer to discredit his sincere efforts.

Why would "the industry" care either way? Any change would be revenue neutral, their profits are capped, the energy suppliers will not benefit from retaining the standing charge, neither will they loose if it is abolished. It is consumers who will be impacted, with a subsidy to the benefit of low users and to the detriment of average and higher users.

yippeekiay

I also got a similar email - said bills would reduce by £238 (on average) yet my estimated charges from them showed only an annual £26 decrease - and I'll tel you exactly why - the ridiculous standing charges!!!!

I went to the Eon site to update my meter reading about an hour ago. I also checked the new tariff charges for my electricity & was shocked to see that my standing charge has increased from 57.436p to 71.204p.

That's just shy of a 25% increase!

That means a staggering (to me) £260 standing charge just for Electricity before I even start using any energy.

I had to get my gas disconnected because I couldn't justify the standing charges considering my low use but I can't live without electricity - or do I have to start looking for an alternative?

They have graced me with a 50p a week saving after grabbing £1 a week extra for themselves via the SC!!!

How good of them (sarcastic)

This huge increase in the charge actually makes my energy cost over a year barely any cheaper despite the price cap reduction that was apparently supposed to be quite big! - pffft.

So if/when the unit price increases it will mean an even bigger increase in comparison as they'll no doubt keep increasing this stealth tax as long as they can, seeing as it's a money grab currently.

Ofgem are seemingly working in the best interest of the energy companies rather than the consumer.

This needs to be nipped in the bud fast as it is getting ridiculous.

powerful_Rogue

yippeekiay said:

I also got a similar email - said bills would reduce by £238 (on average) yet my estimated charges from them showed only an annual £26 decrease - and I'll tel you exactly why - the ridiculous standing charges!!!!

I went to the Eon site to update my meter reading about an hour ago. I also checked the new tariff charges for my electricity & was shocked to see that my standing charge has increased from 57.436p to 71.204p.

That's just shy of a 25% increase!

That means a staggering (to me) £260 standing charge just for Electricity before I even start using any energy.

I had to get my gas disconnected because I couldn't justify the standing charges considering my low use but I can't live without electricity - or do I have to start looking for an alternative?

They have graced me with a 50p a week saving after grabbing £1 a week extra for themselves via the SC!!!

How good of them (sarcastic)

This huge increase in the charge actually makes my energy cost over a year barely any cheaper despite the price cap reduction that was apparently supposed to be quite big! - pffft.

So if/when the unit price increases it will mean an even bigger increase in comparison as they'll no doubt keep increasing this stealth tax as long as they can, seeing as it's a money grab currently.

Ofgem are seemingly working in the best interest of the energy companies rather than the consumer.

This needs to be nipped in the bud fast as it is getting ridiculous.

£260 for 24/7 electric 365 days a year.

How does that compare to your broadband cost etc? Certainly more useful in terms of fridges and freezers.

Also the energy companies don't keep the standing charge - It's set my Ofgem.

Mouldymeat3

Our supplier emphasizes that they make no profit on the Standing Charge

Last September, on our first bill which happened to be £20, they broke down the costs:

Electricity £7.93,  Service charge £1.21,  Government subsidies £2.66,  Transmission £6.07,  Metering £1.13,  VAT £0.98.

the_lunatic_is_in_my_head

powerful_Rogue said:

Also the energy companies don't keep the standing charge 

Really depends on what you mean by "keep", it may be calculated (by Ofgem) to cover specific overheads but stating they don't "keep" could be taken to suggest it's somehow ring fenced and not touched by the supply companies which isn't the case.

Some of the factors such as green levies and network improvements are obviously outside of the control of the supply companies but as per the pie chart on page 4, 45% of it is for operating costs (billing, etc), i.e general business overheads. 

That's not to pass any comment on whether the SC is right or wrong. 

NorfolkCanary said:

In this case the cost of maintaining the existing network increase YoY due to material costs, wage increases, inflation, safety standards, end of lifecycle costs. How is this supposed to be funded going forwards? 

Maybe the EU should have harmonised corporation tax at higher than 15%.....

wild666

My tracker SC's to 15/2/24 were E 48.65p G 26.84p, from the 15/2/24 the increased to E 55.39p G 27.47p. The tracker price is getting closer to the SVR kWh rate, the savings are around 12p per day on the Elec. SC and 6p per kWh Gas 4p per day SC and 2p per kWh. 
I went on the tracker tariff on 1/7/23 and reckon I 've saved about £270 since been on the tariff. 

wild666

Chris_b2z said:

matt_drummer said:

Chris_b2z said:

ArbitraryRandom said:

Chris_b2z said:

pseudodox said:

Should the people who work in the industry be paid minimum wages?

Really? Bumper earnings for National Grid come as energy firms are accused of ‘greedflation’

National Grid’s John Pettigrew, one of the country’s highest-profile energy executives, took home £7.2m last financial year, up from £6.6m a year earlier, according to the FTSE 100 power networks company. His fixed pay fell but variable pay, which includes bonuses and long-term incentives, rose from £5.2m to almost £6m.

Okay, so we take his 7.2 million away from him and share it out amongst UK households... which account would you like your 26p depositing into? 

Thank you for that constructive suggestion.

I'm sure that National Grid under John's leadership will continue to generate healthy shareholder returns. So it's £7.2m worth spent.

The thing that bugs me is that he stands to pay exactly the same standing charge contribution as @Helen_ and everyone else that's struggling financially or making an effort to reduce energy usage.

Why would he have to pay more for the same service?

Would his food be more expensive at the same supermarket?

Does he have to pay for for his broadband or mobile telephone from the same providers as the rest of us?

I will quote Martin Lewis as my response -

I call standing charges a 'poll tax' as you pay it regardless of usage – for example, many elderly who only use gas for winter heating still pay for their meters in summer. I believe it is a moral hazard, as those on lower usage get less benefit and are disincentivised from cutting bills.

I believe SC's were first introduced as a short term measure in the 70's it's certainly time they were abolished 

MattMattMattUK

the_lunatic_is_in_my_head said:

NorfolkCanary said:

In this case the cost of maintaining the existing network increase YoY due to material costs, wage increases, inflation, safety standards, end of lifecycle costs. How is this supposed to be funded going forwards? 

Maybe the EU should have harmonised corporation tax at higher than 15%.....

But then how would tax havens such as Ireland and Luxembourg encourage companies to base their operations in those countries...

Also maybe the UK should have a lower personal allowance, the EU average is €1,800, possibly charge VAT on food as every other EU country does, have higher fuel duties as nearly every other EU country does, etc.  55% of households receive more in cash benefits than they pay in tax (the highest level in the EU. The bottom and middle third of earners pay the lowest effective rate of income taxation in the EU (the top third pay the fifth highest). The only other country to offer non-dom status is Ireland as part of it's tax haven operations. Unfortunately the UK is a low tax country, our taxes might be the highest for thirty years, but they are still low by the standards of an advanced economy, we certainly do not pay enough for the services we currently have (hence the deficit), let alone the ones we claim we want (according to polling on what the public want from services). 

We would also have to answer whether subsidy from general taxation is desirable, personally I think not. Those in need should be helped through the benefits/welfare system, but we should not create market distortions and subsidies. 

powerful_Rogue

wild666 said:

Chris_b2z said:

matt_drummer said:

Chris_b2z said:

ArbitraryRandom said:

Chris_b2z said:

pseudodox said:

Should the people who work in the industry be paid minimum wages?

Really? Bumper earnings for National Grid come as energy firms are accused of ‘greedflation’

National Grid’s John Pettigrew, one of the country’s highest-profile energy executives, took home £7.2m last financial year, up from £6.6m a year earlier, according to the FTSE 100 power networks company. His fixed pay fell but variable pay, which includes bonuses and long-term incentives, rose from £5.2m to almost £6m.

Okay, so we take his 7.2 million away from him and share it out amongst UK households... which account would you like your 26p depositing into? 

Thank you for that constructive suggestion.

I'm sure that National Grid under John's leadership will continue to generate healthy shareholder returns. So it's £7.2m worth spent.

The thing that bugs me is that he stands to pay exactly the same standing charge contribution as @Helen_ and everyone else that's struggling financially or making an effort to reduce energy usage.

Why would he have to pay more for the same service?

Would his food be more expensive at the same supermarket?

Does he have to pay for for his broadband or mobile telephone from the same providers as the rest of us?

I will quote Martin Lewis as my response -

I call standing charges a 'poll tax' as you pay it regardless of usage – for example, many elderly who only use gas for winter heating still pay for their meters in summer. I believe it is a moral hazard, as those on lower usage get less benefit and are disincentivised from cutting bills.

I believe SC's were first introduced as a short term measure in the 70's it's certainly time they were abolished 

Where would the addiditonal money come from to keep the grid running?

MattMattMattUK

wild666 said:

Chris_b2z said:

matt_drummer said:

Chris_b2z said:

ArbitraryRandom said:

Chris_b2z said:

pseudodox said:

Should the people who work in the industry be paid minimum wages?

Really? Bumper earnings for National Grid come as energy firms are accused of ‘greedflation’

National Grid’s John Pettigrew, one of the country’s highest-profile energy executives, took home £7.2m last financial year, up from £6.6m a year earlier, according to the FTSE 100 power networks company. His fixed pay fell but variable pay, which includes bonuses and long-term incentives, rose from £5.2m to almost £6m.

Okay, so we take his 7.2 million away from him and share it out amongst UK households... which account would you like your 26p depositing into? 

Thank you for that constructive suggestion.

I'm sure that National Grid under John's leadership will continue to generate healthy shareholder returns. So it's £7.2m worth spent.

The thing that bugs me is that he stands to pay exactly the same standing charge contribution as @Helen_ and everyone else that's struggling financially or making an effort to reduce energy usage.

Why would he have to pay more for the same service?

Would his food be more expensive at the same supermarket?

Does he have to pay for for his broadband or mobile telephone from the same providers as the rest of us?

I will quote Martin Lewis as my response -

I call standing charges a 'poll tax' as you pay it regardless of usage – for example, many elderly who only use gas for winter heating still pay for their meters in summer. I believe it is a moral hazard, as those on lower usage get less benefit and are disincentivised from cutting bills.

I believe SC's were first introduced as a short term measure in the 70's it's certainly time they were abolished 

Inheritance tax (then as probate tax) was as introduced in 1694 as a ten year measure to fund the Nine Years War.
Income tax was introduced as a short term measure in 1842.
It does however make sense to retain both, just as it makes sense to retain the standing charge. Just because something was originally introduced as a short term measure does not mean that keeping it is a bad idea.