Question: Standing Charge Abolish & Fixed Term Energy Contracts

Section62

https://forums.moneysavingexpert.com/discussion/comment/82186797#Comment_82186797

"there are no votes in increasing the price of gas"

Hence a strategy of reducing the cost of gas for those who use less. Someone has probably done the calculus to reassure them that lost votes will be at least balanced by votes gained, if necessary perhaps helped by spinning those with higher consumption as 'gas guzzlers' refusing to adopt modern and less polluting methods of heating and/or better insulation.

The lack of truth, or unduly simplistic approach contained in that shouldn't be a bar to it being deployed. It has, after all, been tried and tested with ICE vehicles.

Scot_39

https://forums.moneysavingexpert.com/discussion/comment/82186430#Comment_82186430

The incentive remains - you use less you pay less.

Politically enegineering costs to suit one group sounds easy and clever - the reality is far from true - as over 2 years of Ofgem consultation - and a now very very limited 12m trial of a half way house - saving around 50% of average standing charges shows.

Labour should have waited for the post trial analysis of these test tariffs - it in reality probably will - as they have gone on record as iirc

Q) When …. ?

A) "2027 (or as soon after as possible)".

I will be surprised if this really happens anytime soon - at best next Jul would be my optimistic guess - hopefully coinciding with some relief on gas cap pricing to soften the blow for high users

Section62

https://forums.moneysavingexpert.com/discussion/comment/82186828#Comment_82186828

The incentive remains - you use less you pay less.

But the incentive is weaker and only works up to a point. The greater the percentage of fixed charges, the less incentive to use less.

Politically enegineering costs to suit one group sounds easy and clever - the reality is far from true - as over 2 years of Ofgem consultation - and a now very very limited 12m trial of a half way house - saving around 50% of average standing charges shows.

Governments can implement painful policies if they have the political capital. Until this week the government were only lukewarm on standing charges. It isn't surprising then that Ofgem's consultation and trial were similarly lukewarm.

A clear political direction, perhaps a flagship policy, that gas standing charges will be scrapped gives Ofgem the impetus to make it happen. The lack of Ofgem action to date doesn't mean gas standing charges cannot be scrapped, nor that unintended consequences can't be mitigated.

Scot_39

Really - £45 per year - a flagship ?

Its more of a sticking plaster over the gaping wound about to be inflicted on the finances of many of the struggling / vulnerable in the around two thirds of UK homes in last Ofgem breakdown I read - on the cap.

A distraction worth about 10% of the predicted increase in Jan to some - with suppliers predictions of increases in the £400+ to £650+ range in the next 2 cap windows.

Section62

https://forums.moneysavingexpert.com/discussion/comment/82186931#Comment_82186931

Really - £45 per year - a flagship ?

Perhaps. Sometimes a bit of tokenism is what is needed.

Its more of a sticking plaster over the gaping wound about to be inflicted on the finances of many of the struggling / vulnerable in the around two thirds of UK homes in last Ofgem breakdown I read - on the cap.

A distraction worth about 10% of the predicted increase in Jan to some - with suppliers predictions of increases in the £400+ to £650+ range in
the next 2 cap windows.

There's stuff governments can control, and stuff they can't. An age-old political trick is to show you care (and are competent) by changing what you do control, whilst being a victim of circumstance to what you can't.

I predict comments from government and elsewhere that the eyewatering price increases are down to the global situation, but we've done our bit by scrapping 'excessive' standing charges on gas, and VAT on electricity. Which wouldn't be untruthful.

Scot_39

https://forums.moneysavingexpert.com/discussion/comment/82186430#Comment_82186430

Gas standing charges have zero network infrastructure costs in them.

And the only reason the electricity SC component for networks is so high is net zero and renewables.

And for those unhappy with current SC levels- that cost is onltbexpected to increase - with Ofgem expecting £60bn in new project costs in the current 5 yr review to 2030.

Guess who funds the £60bn.

And of course theres the day tondayvoperating costs forecast by NESO to exceed £8bn by 2030.