MSE News: More energy deals with NO standing charges finally on the cards

Scot_39

Its quite simple - across c 31.5m UK grid connections - homes and businesses - there is a pool of costs to be paid for the generation and transmission of our electricity.

And anyone who saves from a change in their costs - will have to have that shortfall made up by someone else.

And as per the interim report into SC - Ofgem made it clear - without external funding from govt - that was the balance they were then having to perform.

Cross subsidy already does happen, but until we see how Ofgem plan to recover the shortfalls from those who win in its non SC and SC regulated future twin world view - its unclear how these might evolve.

But from an industry perspective, we would if exclude politics, simply perhaps then accept the work of industry experts - and so accept the outcome of their work - like for instance Ofgems comprehensive work like parts of the TCR review - behind deciding that charges for fixed costs are most fairly distributed as they now currently stand - to avoid high users cross subsidising low users.

Which is why electricity network charges have been in part shifted from unit rates to SC daily rates over last 2 years. 

Energy charities, our liberal elites, Martin Lewis etc - many wanted something done about SC. Some of them wanted them scrapped. But how that will balance costs - the devil will be in the detail yet to come.

But thanks to them - I bet you there are some of the now many - the 1.5m homes with solar - many of them very wealthy indeed - potentially celebrating the potential result of their political intervention.  Not at all the group they intended to help.

Whilst others - especially the c4m of off gas grid homes - those especially on conventional all electric heating (say the 2.x m on E7, the 750k on other RTS legacy metering, the 100k on non E7 / RTS legacy like E10 etc)  - who have bothered to read Ofgems interim work on SC.

An interim report where they tabled examples of punitive costs rises even for getting rid of just upto £100 - c38% of the highest regional standing charge - c45% of the average - are left worrying greatly about the tabled cost of simplistic shifts in that interim report.  

And so how many £100s - they may end up paying to heavily subsidize perhaps the genuinely deserving - but also that very not trivial in relative size - 1.5m with solar grouping - in a non SC + SC tariff mix world.

mmmmikey

See this thread for an example of a consequence of the proposals:

https://forums.moneysavingexpert.com/discussion/6576387/is-my-electric-usage-too-high/p2

Bottom line: people with electric heating who are amongst the highest users, many of whom will already be struggling with high bills due o heating costs, will see their bills go up so people with low bills can see their bills go down.

I wonder how many of those people have jumped on the standing charges bandwagon without realising the implications?

Qyburn

born_again said:

Qyburn said:

Question for those arguing that some of the S/C elements should come from general taxation. It's a justifiable argument, particularly with regard to social costs which are nothing to do with production or delivery of gas or electricity.

But the question is, should these costs be met by increasing tax, and if so which tax would you increase? Or by cutting a service somewhere, and if so which service?

Fairer for actual users to pay. 

Who do you consider to be the actual users of "social costs which are nothing to do with production or delivery of gas or electricity"

michaels

MattMattMattUK said:

QrizB said:

Qyburn said:

For me, I'd fund it by increasing income tax.

You could reduce the personal tax-free allowance by £1000 but not change the bands. That would probably do it.

If it were down to me I would lower the personal allowance to £1,000 and combine NI and IC into one income tax.

A little harsh to charge NI a second time, first on the way into a pension and again on the way out as there is no option to decide in retrospect that saving in a pension might actually be more costly than taking the income.

GingerTim

michaels said:

MattMattMattUK said:

QrizB said:

Qyburn said:

For me, I'd fund it by increasing income tax.

You could reduce the personal tax-free allowance by £1000 but not change the bands. That would probably do it.

If it were down to me I would lower the personal allowance to £1,000 and combine NI and IC into one income tax.

A little harsh to charge NI a second time, first on the way into a pension and again on the way out as there is no option to decide in retrospect that saving in a pension might actually be more costly than taking the income.

But paying NI is not a payment towards your  state pension.

oldagetraveller1

Really? https://www.gov.uk/check-national-insurance-record

GingerTim

oldagetraveller1 said:

Really? https://www.gov.uk/check-national-insurance-record

Yes. All that shows is that you have paid NI for a particular length of time so you qualify to receive a state pension. Your NI contributions don't go into a ringmarked pot to pay for your own pension.

Scot_39

oldagetraveller1 said:

Really? https://www.gov.uk/check-national-insurance-record

NI payments or credits (for mothers staying at home or those  on many other benefits) are a qualificationcondition for state pension.

It does not get invested into a fund to pay future pensions or ring fenced specifically as others think to pay for NHS or  benefits.

As they are paid from the central govt general taxation pool, so IT, NI, VAT, business corporation, dividend taxes, insurance premium taxes etc etc.

It's just another income based tax - the main difference with income tax - pension income doesn't count towards it.

Which in many ways fuels the mistaken belief it's a direct linked payment or ring fenced pension fund.

Which is why the nhs levy was not the same as raising ni - it was going to apply to both workers and pensioners alike in 2nd and subsequent years - and it was going to be ringfenced for nhs and care costs.

And the link to ni existed for other state benefits, you needed 2 years iirc min, to qualify for the old non income based jobseekers payment for 6m if became unemployed.

The_Green_Hornet

https://www.gov.uk/government/publications/national-insurance-fund-accounts/great-britain-national-insurance-fund-account-for

The National Insurance Fund (NIF) holds National Insurance Contributions (NICs), paid by employees, employers, and the self-employed. Voluntary contributions are also paid into the Fund. Receipts paid into the NIF are kept separate from all other revenue raised by national taxes and are used to pay social security benefits such as contributory benefits and the State Pension.

Spoonie_Turtle

Scot_39 said:

oldagetraveller1 said:

Really? https://www.gov.uk/check-national-insurance-record

And the link to ni existed for other state benefits, you needed 2 years iirc min, to qualify for the old non income based jobseekers payment for 6m if became unemployed.

Still does, for new style JSA and ESA (the only type available to claim now).  Plus a couple of other benefits
https://www.gov.uk/national-insurance/what-national-insurance-is-for