Starmers cap on energy prices

That is the Tories fooked unless they do something similar - whatever they are saying to the party I reckon we will go down the route of capping prices eventually, we cant just throw money at people in an inflationary spiral.

Or gas prices continue what seems to be the start of a fall and the cap doesn't go up after all later in the year.

Tbh I can’t really think of many better uses of state funds than shielding the population from a massive spike in energy costs

How about investing it in some kind of energy infrastructure projects that might prevent this kind of thing from happening again?

I'd be very surprised if one of the world's richest countries couldn't find money to provide electricity and food for its population

This is political 

Nothing more than that 

Tories being khunts 

one of the world's richest countries couldn't find money to provide electricity and food for its population

This is a thing that (usually white) working class British people say when proposing more public spending. 

Taking GDP at purchasing power parity, UK is poorer than US, Canada, Australia, Taiwan and pretty much every western European country. UK's GDP (PPP) is now the same as that of Malta.  The UK is not a poor country, but it's far from exceptionally wealthy.

In 2020 the UK imported 46% of the food consumed in the UK. If Northern Ireland is separated out, Britain imported >50% of the food consumed in Britain. 
https://www.gov.uk/government/statistics/united-kingdom-food-security-r…

In 2017 the UK imported 36% of the energy consumed in the UK.
https://commonslibrary.parliament.uk/research-briefings/sn04046/

There's a point at which reality and delusion among the UK electorate are going to hit each other at speed.  The fallout will be ugly.

You’re not wrong Rob but also vast sums of money can still be found for disbursement to political allies and large projects of dubious utility. And it is reasonable to suppose that not further subsidising the energy consumption of households will result in a significant recession as consumer spending drops. So probably a fiscally sensible idea 

Issue every household with an exercise bike hooked up to the mains.  People can generate their own electricity whilst having the double-benefit of keeping fit.

The main issue with a price cap is that supply is fixed in the short term.  So if every country in Europe does it then the true market price will just continually spiral upwards.  I suppose this is good in some ways because it might encourage more investment on the supply side.

On the other hand it will put ever increasing liabilities on the government balance sheet and not encourage energy efficiency on the demand side.

if France stops dicking around, and to be fair having an angry Germany and an angry Spain on either side of you has never worked out well for France, then the Midcat pipeline could be operational in 9 months and double the capacity of gas moveable from iberia to central europe. This would ease supply and thus price 

 

Don’t love caps. Why should the nation be paying for khunts to run their Agas on the cheap? 

Bill subsidy targeted at those who need it is better. 

it’s true that successive tory governments have made the U.K. much poorer than it should be, but the term “one of the richest countries in the world” is still easily accurate, sorry

yes, we aren’t as rich on a PPP basis as some peer countries, but guess what, Malta can afford to provide heat and light for its people so so can we

also, investments in new energy projects focused on sustainability and security should pay off in the c.5yrs it would take a new power generation facility to be brought on stream from drawing board stage, if you crushed out nimbyist planning laws into the dust they ought to be anyway 

The idea of not in one way or another paying this extra energy charge by the state is ridiculous.  To fail to do so is an entirely false economy because with each household facing an extra 3-4k of cost from their disposable income (on top of reduced spending power due to general inflation) the economy will grind to halt come winter and tax revenues will plummet in any event.   Public services will cease to function as teachers nurses and even junior doctors will have no choice but to strike.  Quite obviously the government has to pay the excess cost and recover what it can from the entirely unbudgeted and unearned profit bonanza the oil companies are enjoying as a result of Putins invasion of Ukraine and borrow the rest

If Truss is planning to fix this all with tax reductions then this winter will make the Winter of Discontent look like picnic.

I’m tuglite on the question of whether it should be for everyone or just for loads of people tbh. Just fix it with the power of the st8 plz.

"This is a thing that (usually white) working class British people say when proposing more public spending. "

Not sure why their skin colour is relevant 

All be bloody blue when they freeze to death 

Vote Tories, get khunts 

Incidentally it’s obvious that the challenges of the future are going to require a competent and solvent state. Let’s vote accordingly

My power is currently £639 a month = £7668 which is presumably what my old age state pension will be when I reach age 67 if still alive by then, after tax. Council tax is now about £4500 a year as I house adult children who the day they stopped being students, this summer,  the local council seemed to be aware and changed the bill whereas it took 6 months of letters to get the single person discount with 3 or 4 month gaps between the council's letters.

 

I could of course move to a studio flat....

I may get into peat as a source of energy

carbon profile probably as bad as coal tho

In 2010 Nick Clegg said that we didn't have enough time for the 10 to 12 year lead time it would take to build new nuclear power stations and spent the money on green energy projects instead.

There's something not right about your bills Lydia.

That's enough electricity to boil a full kettle 2,500 times or watch television for 25,000 hours non-stop.

It's not really been explained by any of the Tory cucks on here or IRL as to what the downside of lowering the cap is?

If a cap would work without making the energy companies bankrupt, then it would just show that they could be better regulated than they are.

IMO energy should be nationalised, because like water there is no real competition.  

maybe someone is growing weed in the attic?

anyway if you give a bung to 50% of the population, what happens to the 50% who can technically afford it but will need to stop buying trinkets from the SMEs run by the original 50%?

It's not really been explained by any of the Tory cucks on here or IRL as to what the downside of lowering the cap is?

If they are to be believed, putting the cost of the cap below the place where companies can operate a margin vesus wholesale costs means that lots of energy companies will go bust.  So just go the whole hog and nationalise the whole fvcking thing then, and have the cap at a position the Government supplier thinks is right.  Also:

  • Spend on green energy production (including nuclear).  Yes it will take a long time, get the fvck on with it
  • Spend on insulation
  • Give people an incentive to use as little energy as possible and generate their own energy and put it back into the system (Germany and the Netherlands have energy costs higher than ours but less consumption, hence less bills.  We have to use less, and to do that we have to incentivise people to be able to do it) 

what happens to the 50% who can technically afford it but will need to stop buying trinkets from the SMEs run by the original 50%?
 

This is my situation, I can “afford it” but I will have to cut down on my Faberge egg habit.

The number of people who can truly weather it and not give a fook probably isn’t that big tbh (roffers excepted ofc)

"Council tax is now about £4500 a year as I house adult children who the day they stopped being students, this summer,"  

Isnt that solved by asking your children to contribute to the council tax now they are not students and presumably working but living at home?  Or perhaps it is not a big enough hit to you for you to worry about, in which case, I would count my blessings rather than complain about it.

The "slap a windfall tax on oil companies and use that to put a cap on energy" won't work on its own.  At least not in aggregate at a European level.

Someone somewhere has to use less gas and any solution that doesn't solve for this problem isn't a solution.

My solution to this is to apply the cap only to say 80% of previous usage  over the same time period.    If you want to keep using as much as before, thats fine, but you will pay full market price.

I don't think that will ever be implemented because it is too sensible!

Might have some problems with edge cases - last year you lived by yourself or worked away from home and now you don't?

Yes think perhaps that will be default but som sort of scheme for people to apply for exemption in sort of circs you describe.

If the Government are going to fix energy prices they might as well go the whole hog and nationalise.  And while they are at it, they can remove price fixes and just have a single rate of charge.  I'm generally against nationalising but there is so little competition out there at the moment

My solution to this is to apply the cap only to say 80% of previous usage  over the same time period.    If you want to keep using as much as before, thats fine, but you will pay full market price.

So those who were previously careful in their energy consumption and have no further room to economise are penalised while those who were previously profligate benefit. That does not make much sense to me.

The effects of the "energy crisis" on the lowest income groups should, in an ideal world, be mitigated by increasing benefit levels.

The fact that such an approach is not even being seriously suggested is indicative of the mess that the UK's tax and benefits system has evolved into. 

A cap would work by the government paying the entire differential between the cost to the customer and the wholesale production cost.

Whether suppliers are nationalised or privatised is irrelevant. 

Rob the problem with that is inflationary effect of providing sufficient benefits to everyone who will struggle with £4,000 energy bills (most people) is huge and inevitably many people who are already stuggling will priorities elsewhere and many of those bills wont get paid.

British Gas Energy revenue 2021: £7,007m

British Gas Energy gross profit 2021: £849m

How do you get to 2%?

I imagine the "true" margin figure is obscured by all sorts of accounting chicanery and covid screws things up a lot.

For 2017-2021, Centrica's:

Net Income / Revenue = 0.7%

Free Cashflow / Revenue = 8.1%

 

The margin probably lies in that range.

How the fook are we allowing private companies to make such large profit margins from utilities?   Total joke.  There is no benefit to consumers in privatising save for (previously) very savvy ones who could pay below the odds while most people paid above them.  What is the benefit of that to society?

Yeah I think most voters are seeing the record profits and increasing bills as one and the same, even if there is more to it than that 

 

Wtf Vertigo I have just quoted you the margins. There is a reason for the accruals concept and that is because cash flow is irrelevant 

Sounds like Starmer has turned Tory - his idea benefits the ultra rich just as much as it does the poor!

That isn't turning Tory, turning Tory is doing things which benefits the ultra rich and don't benefit the poor (like massive tax cuts). Universal social policies are not "Tory" at all

The reason people look at cash flow (and other metrics) is because profit can be more easily manipulated.