Gas and Electricity Prices

[wacko]

They are "UK based" in the sense that any resources in the UK sector are by International Law, UK Crown assets. They have 'licenses' to extract awared by UK Government. But in times of National Emergency/War a Nation can step in and alter any such licenses. After the crisis is passed, things could then revert. Doesn't matter if the offshore companies are 'UK' ones or not.

The UK Govt/we have been getting that benefit one way or another. According to Wiki £330 BILLION has been paid in production tax since 1970.
It has been spent somewhere, unlike Norway which has saved it and created the worlds largest Sovereign Wealth Fund.

 

[Mike Reed]

-- Freeze the cap at £1971 for six months this winter.
-- Extend the windfall tax to pay for it.
-- Scrap the planned £400 rebate.
-- Rules out Nationalisation on cost grounds.

Yup. read that and it's an interesting idea, but Labour are not going to be in power within the next couple of months, so what's the point of this imminent strategy unless adopted by the gov't. The windfall tax is controversial with good arguments for each opinion. Nationalisation really is pie in the sky (why did they mention it?). Pity about the £400 rebate 'cos I was looking forward to that, and luckily, I still am. I'm also surprised they put a 6 month time limit on it; wonder why. I'm more interested in the method by which they intend to refund the energy companies as this, by its nature, would be complex, variable and thereby costly (whereas reducing monthly bills by £66.66 isn't).

 

[Sue Pertwee-Tyr]

Yup. read that and it's an interesting idea, but Labour are not going to be in power within the next couple of months, so what's the point of this imminent strategy unless adopted by the gov't.

I guess that's the idea. Plus, it means if and when gov't does something along these lines, Labour can justifiably argue that they shamed gov't into doing it. Won't hurt their social credentials any.

 

[Kirk]

The government seem to be focusing solely on making energy costs more palatable (fine in the short-term for those most in need) but ignoring policy that could reduce long-term demand.

 

[Sue Pertwee-Tyr]

We should also not forget that the price cap doesn't apply to business customers. So capping the cap won't affect inflationary pressures from spiralling energy costs. And high-consumption small businesses (restaurants; maybe car repair workshops with ramps, welders, compressors, etc; small engineering, etc) might all go to the wall.

 

[matthewr]

Yup. read that and it's an interesting idea, but Labour are not going to be in power within the next couple of months, so what's the point of this imminent strategy unless adopted by the gov't.

Because they are the opposition.

Nationalisation really is pie in the sky (why did they mention it?).

It's not really pie in the sky and it's popular with a significant portion of their political base and their former leader recommended it after they sort his opinion.

I'm also surprised they put a 6 month time limit on it; wonder why.

Because the rules for Labour are different for the rules for Conservatives and every policy must be fully costed and framed in a way that cannot be used as a "Tax & Spend!" campaigning weapon by the press.

 

[Ponty]

The government seem to be focusing solely on making energy costs more palatable (fine in the short-term for those most in need) but ignoring policy that could reduce long-term demand.

I’d suggest long term demand will reduce if energy is expensive. We’ll see changes in behavioural patterns and people will view electricity and gas as precious commodities not to be wasted. I’ve seen 70p per kw hour mentioned for the new year. Electric car anyone? I’ve bashed that idea on the head, despite the tax breaks.

Water will probably be the next thing we need to waste less of. Food is the big one of course, 6.7M tonnes are wasted in the UK every year at a cost of over £10BN. Globally it’s 1.6BN tonnes, worth $1.2 trillion, a third of the food produced globally. Imagine the total energy which is also wasted as a direct result of food waste, it will be a colossal amount when you consider the supply and distribution chains! We’re going to have to adjust to living in a world of scarcer and more expensive resources and behavioural change will become a necessity.

 

[klfrs]

 

[paulfromcamden]

I’d suggest long term demand will reduce if energy is expensive. We’ll see changes in behavioural patterns and people will view electricity and gas as precious commodities not to be wasted. I’ve seen 70p per kw hour mentioned for the new year. Electric car anyone? I’ve bashed that idea on the head, despite the tax breaks.

Water will probably be the next thing we need to waste less of. Food is the big one of course, 6.7M tonnes are wasted in the UK every year at a cost of over £10BN. Globally it’s 1.6BN tonnes, worth $1.2 trillion, a third of the food produced globally. Imagine the total energy which is also wasted as a direct result of food waste, it will be a colossal amount when you consider the supply and distribution chains! We’re going to have to adjust to living in a world of scarcer and more expensive resources and behavioural change will become a necessity.

I don't disagree with any of that really. The problem is if we leave it up to price increases to reduce demand it will be the worse off in society who bare the brunt of it. A lot of people with money won't see any need to inconvenience themselves and change their behaviour.

There are a couple of big (£5m+) houses on the next street that have been running sprinklers in their front gardens day and night for the past fortnight. People like that aren't going to ration their usage of anything.

 

[Sue Pertwee-Tyr]

I’d suggest long term demand will reduce if energy is expensive. We’ll see changes in behavioural patterns and people will view electricity and gas as precious commodities not to be wasted. I’ve seen 70p per kw hour mentioned for the new year. Electric car anyone? I’ve bashed that idea on the head, despite the tax breaks.

This is another reason why energy costs will have to be brought under control. The government targets for net zero rely on widespread consumer adoption with respect to electric vehicles.

 

[Ponty]

This is another reason why energy costs will have to be brought under control. The government targets for net zero rely on widespread consumer adoption with respect to electric vehicles.

If people can’t afford their domestic electricity bill, they sure as hell can’t afford an electric car. All this man maths you see about justifying a new £30K+ EV based on fuel savings is becoming even more ridiculous every week.

 

[billo]

Lord Hamond (remember him? he used to be a Chancellor at one time) was on the radio this lunchtime saying that just a bit of austerity now and this "Blip" in energy prices will be over so there is no need to rush into giving people money. He really did think that not only would prices stop going up but, they would be back to their pre panic and war value.
If you think Tories are out of touch, just wait until they get into the House of Lords!!!!!

 

[SteveG]

If people can’t afford their domestic electricity bill, they sure as hell can’t afford an electric car. All this man maths you see about justifying a new £30K+ EV based on fuel savings is becoming even more ridiculous every week.

The car price isn't that relevant though, as surely no-one would actually buy one. It's the lease price that matters, and that'll be easier to compare to other monthly running costs.

Not that I'm ready to get an EV yet, as it's still considerably cheaper just to keep my existing petrol car (or at least was last time I did the comparison!).

 

[clivem2]

This is another reason why energy costs will have to be brought under control. The government targets for net zero rely on widespread consumer adoption with respect to electric vehicles.

Net zero has been shifted to the back-burner (apologies, an accidental pun..). We should still be striving for net-zero but realise it may need to be achieved via a different balance than we were aiming for. One example is that in the short to medium term as we wean ourselves off fossil fuels, it's perfectly possible to build even coal-fired power stations to emit zero carbon into the atmosphere (ie use CCS). If we need to build nuclear power stations these will take longer to build so we'll need a quicker way to produce clean power to sit alongside renewables. If fact I'd rather we had several net zero carbon fossil-fuelled power stations than too many nuclear given the legacy that comes with nuclear. It may seem a leap backwards to even think about coal but give it a thought...

 

[SteveG]

Not that I'm ready to get an EV yet, as it's still considerably cheaper just to keep my existing petrol car (or at least was last time I did the comparison!).

Just did a quick calculation again and despite the increase in fuel costs it still looks like it'd a fair bit more to run a leased Nissan Leaf as it costs to run my C-class Merc and that's assuming a fair bit of depreciation on my car, although it doesn't look like the value has actually dropped much since I got it (looks like it might have gone up in value in fact, or worse case hasn't lost anything).

 

[clivem2]

The car price isn't that relevant though, as surely no-one would actually buy one. It's the lease price that matters, and that'll be easier to compare to other monthly running costs.

Not that I'm ready to get an EV yet, as it's still considerably cheaper just to keep my existing petrol car (or at least was last time I did the comparison!).

I wonder how leasing and PCP will work out as interest rates increase...they are virtually all interest so a doubling or soon tripling of rates will have quite a big impact, just as with interest-only mortages which are now looking very expensive. Maybe the OEMs will heavily subsidise the interest rates as they need to produce and sell cars.

 

[Ponty]

The car price isn't that relevant though, as surely no-one would actually buy one. It's the lease price that matters, and that'll be easier to compare to other monthly running costs.

Not that I'm ready to get an EV yet, as it's still considerably cheaper just to keep my existing petrol car (or at least was last time I did the comparison!).

Sure, most won’t buy outright which means however you dress it up, it’s a debt which has to be serviced. Despite the tax breaks, I can’t make an EV stack up versus keeping my bought and paid for nearly 3 year old petrol car which will last for years. With the coming increases in electricity prices, even less so. Lease rates are going up by the way, the double whammy of increasing new car prices and rising interest rate swaps are making even normal stuff look very expensive.

 

[Sue Pertwee-Tyr]

Most car makers have their own financing/leasing arms nowadays, so probably have more control over the rates they charge than if they leave it in the hands of commercial lenders. Where that leaves the commercial car leasing companies though, is another matter.

 

[Ponty]

Most car makers have their own financing/leasing arms nowadays, so probably have more control over the rates they charge than if they leave it in the hands of commercial lenders. Where that leaves the commercial car leasing companies though, is another matter.

Virtually all manufacturer paper is bundled up and sold to banks. The customer pays the true cost of funds (plus margin) one way or another, whether the increased ticket price is covering an internal blind discount is irrelevant.

 

[matt j]

I reckon car leases are the next sub prime mortgage bomb waiting to go off.

There'll soon be forecourts fully of cheap 5 series and E class' given back by folk who earned a grand a month and spent 997 of it on a car.