Have just started a fixed-rate tarriff with British Gas, for electricity - their get-out clause

quartzz

Gerry1 said:

The government can alter the VAT rate and add environmental taxes.  Would you expect BG not to pass them on?

well, there's some ambiguous variables if ever there were

"our tarriff is fixed - unless the cost goes up or there's an additional charge"

in the case of the tarriff I've chosen, the kWh per hour I would imagine is standard across the board. it's the standing charge (47p/day) which got me to sign the contract

Scot_39 said:

Even BG would surely realise they would suffer reputational and maybe mass customer losses - if raised prices when others honored their fixes.

you would er......hope

Gerry1

You're really overthinking this.

BG wouldn't be increasing their fixed tariff rates.  They'd just be collecting the additional tax or levies to pass on to the government as the law requires.

If you were running a restaurant, would you keep your menu prices unchanged if the government put VAT up to 25%?

quartzz

not really?

I'll re phrase. BG have said the "units" of the money I'll be paying is fixed, unless it isn't. that seems to be the summary. and I'll certainly emphasise that the get-out clause wasn't mentioned on the web page for the tarriff. I'm sure it was buried somewhere yes

If I was running a restaurant, there would be no such thing as set fee's for meals for 12 months.....closest example I can think of is a McDonalds meal, where it stays the same price, until it increases (but there is no contract for a McD's meal - it's the only example I could think of)

victor2

quartzz said:

...

Tariff type Fixed**

** The price is fixed until your tariff ends unless the government or regulator does something that changes it.
...

I'll re phrase. BG have said the "units" of the money I'll be paying is fixed, unless it isn't. 
...

They did not suggest that they could change the rates, only the government or regulator. 

quartzz

victor2 said:

quartzz said:

...

Tariff type Fixed**

** The price is fixed until your tariff ends unless the government or regulator does something that changes it.
...

I'll re phrase. BG have said the "units" of the money I'll be paying is fixed, unless it isn't. 
...

They did not suggest that they could change the rates, only the government or regulator. 

I'll repeat my re phrase - "the price is fixed, unless it changes". edit, price rate

If you want to get your next bill through and it's 10% more expensive, you're welcome to think to yourself "this is fine, I selected a fix-rate tarriff as advertised, the supplier hasn't increased their price, this change is due to government set factors beyond their control".

bob2302

"The price is fixed untquartzz said:

and as per usual, in my "welcome" email, they've given themself a back door. a fairly huge back door.

Tariff type Fixed**

** The price is fixed until your tariff ends unless the government or regulator does something that changes it.

It says "does something that changes it.". This is not the same as "does something that increases our costs". Your reading seems contrived to me.

quartzz

bob2302 said:

"The price is fixed untquartzz said:

and as per usual, in my "welcome" email, they've given themself a back door. a fairly huge back door.

Tariff type Fixed**

** The price is fixed until your tariff ends unless the government or regulator does something that changes it.

It says "does something that changes it.". This is not the same as "does something that increases our costs". Your reading seems contrived to me.

thanks, it isn't difficult. the bill that I would receive based on the figures quoted on their website at the time I took out the tarriff, isn't the same as the numbers on the bill that I potentially received, based on the same usage. because of an ambiguous or external factor causing the price increase. you might be being contrived?

potential bill received > quoted rates at the time I took out the tarriff, because of "a factor" - straight forward as that

Scot_39

Take vat.

Does the fix apply to the cost before or the taxed cost after ?

If the govt did as some have in past asked them to do scrap vat on domestic energy - would you happily still pay the rate including the 5% levy.

If it increased and supliers had to pay govt - would you really expect them to absorb it within narrow margins ( like the cap pricev2.4% EBIT operating margin - not final profit)

Unlikely we'll it went from 0 to 8% on a govt decision in 90s - almost half the then at the time standard 17.5% rate (now 20%), which was then cut back to 5% years later by another.


And if look at the main rate of VAT itself on other goods - it has changed several times since introduced c50 years ago - 10%, split 8%,25%, 15% 17.5%, 15%, 17.5%, 20% etc - changing morc than once per decade.

quartzz

Hi, I go with my original statement -- potential bill received (due to get out clause) > quoted rates. I'd put money on the bill being higher than the quoted rates, rather than lower. chances of VAT decreasing, pretty low I'd say

Ildhund

Taxes aside, the various levies that the Government blesses electricity customers with are loaded on to the Standing Charge. In the current post-WFP-fiasco climate, it would be a very brave Labour Government that decided to fill one of their own black holes by inventing new levies to increase Standing Charges with.

Suppliers are bound to give adequate notice of any price increase, however it may arise (SLC23). You wouldn't ever see a different rate on a bill that you hadn't been told about beforehand in time to turn it down. This does, of course, raise a different point: if having been notified of a tariff rate increase resulting from Government action, you wanted to jump ship to a more accommodating supplier, would an exit fee be payable? I think SLC24 says no, but then IANAL.

But then Ofgem have the power to vary these licence conditions (e.g. The restrictions imposed by paragraph 24.3 will not apply to such extent as the Authority may direct), so back to the beginning ...