an energy cap of 2500 - still double energy bills this winter?

[yih8979kh]

The figure of 2500 a one possible energy cap has been doing the rounds on the media -www.bbc.co.uk/news/business-62801913. It's definitely better than 3500 but doesnt that still mean that our energy bills will be double this winter seeing as last winter's cap was 1200? We paid 180 per month last winter, will it be 360 this Dec? Yes, we get 67 pounds off or something but thats still quite a lot more per month than last year.

What do you mean that the wealthy won't have increased bills? The changes affect everyone the same, rich or poor, the cost of heating a swimming pool will increase by the same %age as boiling your kettle

Germany is capping the price for the average number of units most use, to low levels, anyone without good reason who goes above this, pays market rate & is taxing oil company profits.

& what happens when Putin is still in power in 18 months time and gas is still super high? Borrow another 130 billion??? this is Corbyn madness on steroids'!

Where is the money going to come from for NHS which will now have to get far more because inflation has gone from 3% to 10% plus?

The wealthy's bills will double just like those of the less well off, if they continue to use the same amount as they did previously.

Plus if you were paying £5k pa before and it goes up to £10k pa, it might focus the mind somewhat, just as much as if your £1k annual bill goes up to £2k.

I suggest that you find out how energy pricing works, you really don't understand it

What do you mean that the wealthy won't have increased bills? The changes affect everyone the same, rich or poor, the cost of heating a swimming pool will increase by the same %age as boiling your kettle

Well yes the changes affect everybody but wealthier people will be able to afford it so will still waste precious energy on luxuries whilst people can't afford the basics.

There should be some way of making sure that everybody has energy at an accessible price for necessities and after that energy for luxuries is much more limited.

The wealthy can easily afford a trebling or more of their bills, the poor cannot afford a doubling of the unit price, for many, it will literally kill them.

By wealthy i'm not talking of someone earning 50 or 60k, i'm talking about the UK's 2.6m millionaires and the 171 billionaires.

Gas was 4p per KWH last January.
It's currently at 7p per KWH under the April price cap - and is set for 15p per KWH in October.

So gas could be double or maybe 3 times more - if the price cap is set at this predicted level compared to what it was in Jan 22.

This could affect a lot of people.

At the moment, lowering the price cap still means that well off people can run tumble dryers, hot tubs, ott Christmas lights and anything else they please whilst those at the other end of the scale will still struggle and go cold this winter.

Yes, but that's just the natural and inevitable consequence of some people having more money than others. The only way you could avoid having some people using up much more energy per person is by mandating strict rationing calculated per room or per head.

Or a tiered system - so if you use above a certain amount, it costs more per KWH.

*With caveats for people who need to use more energy. And not just because they need to run a hot tub etc or heat a swimming pool.

This is the difficulty, anything that focussed more on actually rationing energy would be so much more complex and difficult to administrate. Raising prices is much easier. I do understand that, it just upsets me that every time the people that have least to start off with are the ones that bear the brunt.

No, you cap what the average family uses in units and then all above that is at cost.

If the tories had actually been Governing instead of having a beauty contest, they may have put a bit more thought into this.

£130 billion is 2.5 x what furlough cost the UK and that worked out well didn't it.

As for Labour, their policy was shit too, energy use shouldn't become a universal benefit for all.

@Rainbowcat99
@Neverendingdust

Neverendingdust
Are black outs still a possibility though?

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Actually this policy makes blackouts more likely not less likely. The key problem here is that without Russian gas there simply isn't enough supply to meet current demand in Europe. High prices would reduce that demand meaning prices would drop.

Now by subsidising energy prices with a massive increase in debt there is a reduced incentive for consumers to reduce demand meaning that the only way for supply and demand to match is by rationing supply by blackouts.

@Rainbowcat99

At the moment, lowering the price cap still means that well off people can run tumble dryers, hot tubs, ott Christmas lights and anything else they please whilst those at the other end of the scale will still struggle and go cold this winter.
There must be a better way?

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There is a better way and a better and more efficient use of taxpayers money / increase in debt. And that is using the money to target the most vulnerable and less well off with support rather than a blanket subsidy to rich and poor.

This policy will cost £100 billion and rising (roughly the same as the entire education budget) and once put in place will be impossible to remove.

I appreciate that double is better than quadruple, it's still quite a lot though for quite a few families especially if they get rid of the £400 for everyone or the additional for those in need and/or pensioners.

In addition, I am also concerned about the lack of discussion about shortages. In the EU there is a general discussion about cutting usage by 15% - Germany is certainly talking about it, Switzerland has asked every large employer/company to save 15% now. None of this is being talked about in the UK

We pay significantly under that for a 3 bed house with 4 adults. I do wonder just how hot people have their homes! Set your thermostat at 18 and heat for an hour in the morning and 3 hours in the evening. Should be sufficient for all but the most elderly/disabilities, the former get extra help not means tested, and we should help those who cannot work or go out due to high levels of impairment

We do need to reduce our energy use in this country - there are people and companies who waste energy - and those who scrimp and save and make the most of the limited energy they can afford.

Other European countries seem to be taking steps to ration energy.

There is going to be a limited supply of gas - so we need to ensure it's used as efficiently and effectively as possible.

@Alexandra2001

"Germany is capping the price for the average number of units most use, to low levels, anyone without good reason who goes above this, pays market rate & is taxing oil company profits.

& what happens when Putin is still in power in 18 months time and gas is still super high? Borrow another 130 billion??? this is Corbyn madness on steroids'!

Where is the money going to come from for NHS which will now have to get far more because inflation has gone from 3% to 10% plus?"

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Excellent post

I would like to see a 'German Style' upper limit on the subsidised energy units. Anyone using more should pay market price and possibly a little bit extra. That extra should go to those most in need. I don't think the costs of heating swimming pools or someone going crazy on Christmas lights should ruin the future of our dcs, who will probably never again get to experience a working NHS or police given how high government debt will be should this energy crisis continue. There is no reason to believe global prices will come down anytime in the next 5 to 10 years.

It would be better to bring in a tiered system. The first X number of kWh usage is subsidised and anything over is charged at the full wack. Why should we be subsidising all energy used?

Times Radio were discussing Germany earlier. I didn't get all of it but it seems that they are trying to reduce consumption by 20% nationally. This includes no illumination lights on external buildings such as castles, setting workplace heating at no more than 19 and a who host of other ideas that I'm not sure Brits would get behind.

I'm really unhappy with this policy for many reasons

1. Misinformed people will waste energy thinking they are "allowed" it in their price cap.
2. It does absolutely nothing to change behaviour to save a valuable resource
3. It does nothing to change behaviour to benefit the planet
4. It will cost a fortune and if putin carries on who know where this will

End.

1. It makes the energy companies richer
2. It means we are paying this off for god knows how long along with furlough costs.

Jeeeeez. There has to be a better way.

Germany is certainly talking about it, Switzerland has asked every large employer/company to save 15% now. None of this is being talked about in the UK

Although to be fair, nothing much is being talked about because the Govt have been on a lovely holiday and are now throwing money at a problem rather than actually trying to make sensible, longer term plans. We will need to get to the point fairly quick where we talk about "not enough" energy rather than "too expensive" energy.

this is Corbyn madness on steroids'!

Bingo!

This is worrying. You're an adult paying bills. Learn how they work.

The cap is not a cap on how much they can charge in total. It is a cap on price per unit.

They are capping how much each KW of electricity can be charged at. Same for gas.

If you use 5KW of electricy a day, then you pay for 5 KW a day. If you use 15KW a day then you pay for 15Kw a day. Each KW is charged at a rate which cannot be more than the cap.

A fixed rate of £166 a month does not mean you will only pay £166 a month no matter how much power you use. They have fixed the price you pay per unit, then they have looked at how many units you normal use annually. They then offer you a monthly price which should cover your annual usage. If you stopped using all power, you'd have a huge credit with them. If you triple your energy use by having the heating and tumble dryer on all day then you would get a huge bill because you need to pay for what you use.

A fixed rate means they fix the price per unit, not the price you pay overall.

The energy cap price used in the press is just the maximum an average house would pay on the proposed maximum price per unit. Millions will pay less than the suggested figure and millions will pay more. That's how you get an average.

Everyone pays for what they use, some pay tens of thousands have some pay less than two thousand. But no one can be charged more per each unit than the cap.

I don't consider myself wealthy yet have a tumble dryer that I do use in winter for some things as otherwise takes days to dry and no space

@Alexandra2001 thats a good idea as long as the average is sensible and maybe still some concessions for disabled people who maybe have to run electric equipment so usage is a little higher than most