Martin Lewis: Standing charges update risks households paying more

HillStreetBlues

I am neutral on this issue, but what I find don't like is the fundamental dishonesty in only stating the saving side of it without stating the other side of it.  Clearly if there are cheap no SC then then other users will bear the brunt of this cost. Why not be open and state as much.

housebuyer143

GingerTim said:

Oh look, it's Martin Lewis discovering the consequences of his actions.

He doesn't learn! Couldn't wait to shout about how he contributed to banning inflation price rises mid contracts - heralded it as a win! In reality someone with a £20 contact is getting hit with a 15% rise each year when before it was around 5% 😡 
Only a "win" if your contract is in excess of £60pcm.
Thanks Martin!

lohr500

Am I missing something?

Reading the link in the original post, wasn't Martin's campaign proposing two price caps?

One with a lower or zero s/c but a higher unit cost to offset the reduced s/c..
The other, as now with a s/c and unit cost capped based on the existing calculations.

If Ofgem have chosen to deviate from his proposed ideas, then good on him for challenging them.

As a high user, I don't see why I should be paying more to subsidise those who don't want to pay the full s/c.

Qyburn

lohr500 said:

Am I missing something?

Reading the link in the original post, wasn't Martin's campaign proposing two price caps?

One with a lower or zero s/c but a higher unit cost to offset the reduced s/c..
The other, as now with a s/c and unit cost capped based on the existing calculations.

The first one would be cheaper for some users, ie suppliers get less income from those users.  Where was "Martin" expecting that shortfall to be made up, other than by a price rise for everyone else?

wrf12345

Now looks like it will be Jan 2026 for the zero or low s/c tariff, price capped or not. Ofgem keeping the easy money flowing for the industry. Huge margin between the price they pay for electric and the price they sell it for (on average 10p buy, 25p sell), that 15p is at least twice what Ebico had to play with 12 years ago when they offered a zero s/c tariff.

Qyburn

wrf12345 said:

..  Huge margin between the price they pay for electric and the price they sell it for ..

Don't you realise that the wholesale cost is just the wholesale cost of electricity itself? It doesn't include transmission or distribution costs, administration, payroll etc etc. 

A bit like claiming a loaf of bread should match the wholesale price of flour.

QrizB

Qyburn said:

wrf12345 said:

..  Huge margin between the price they pay for electric and the price they sell it for ..

Don't you realise that the wholesale cost is just the wholesale cost of electricity itself? It doesn't include transmission or distribution costs, administration, payroll etc etc. 

I think wrf is arguing that the standing charge should be higher, around £600 a year, to include all the costs other than wholesale electricity. You'd then buy your electricity at the wholesale price of around 10p/kWh (but varying every 30 minutes).

They can't possibly be thinking anything of else?

debitcardmayhem

QrizB said:

Qyburn said:

wrf12345 said:

..  Huge margin between the price they pay for electric and the price they sell it for ..

Don't you realise that the wholesale cost is just the wholesale cost of electricity itself? It doesn't include transmission or distribution costs, administration, payroll etc etc. 

I think wrf is arguing that the standing charge should be higher, around £600 a year, to include all the costs other than wholesale electricity. You'd then buy your electricity at the wholesale price of around 10p/kWh (but varying every 30 minutes).

They can possibly be thinking anything else?

Too early to have a belly laugh this morning 😹😹

WiserMiser

The No Standing Charges idea hasn't been thought through, it turns out to be a mirage.  It wrongly assumes that all poor people have small bills and that all rich people have large ones.

But the reality is often different. Poor people often have large bills, e.g. if they're housebound, have poor circulation, have a large family or an old, draughty, poorly insulated property (solid walls etc).

Rich people often have small bills because they are second homes.

Scot_39

housebuyer143 said:

GingerTim said:

Oh look, it's Martin Lewis discovering the consequences of his actions.

He doesn't learn! Couldn't wait to shout about how he contributed to banning inflation price rises mid contracts - heralded it as a win! In reality someone with a £20 contact is getting hit with a 15% rise each year when before it was around 5% 😡 
Only a "win" if your contract is in excess of £60pcm.
Thanks Martin!

To be fair you can probably blame Ofcom and govts that drive them for the new fixed increases, just as you could blame them for the original cpi/rpi +3.9% - yes they couldn't even fix which measure of inflation firms had to use they are so inept.

Another attempt no doubt to shift subsidy for network improvements from taxes to consumers, and make those in cities the rich and poor alike subsidise those in rural areas.
But then Ofcom also back up the universal service mandate for Royal Mail which essentially does the same. 
And of course agreed to the alternate day 2nd class post farce  --which starts Monday iirc - so will no doubt get junk mail every day, but real mail only every 2nd.