UK Conservative Party Leadership Election

Kroffe

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Energy companies in Sweden are trying to get out of having to honor the 'locked' price deals that people have signed with them.
Most dont take those fixed price deals because unless something unforseen happens that increases the price of energy a lot its just not a good deal.
Funny how they are ok with overcharging people but they dont like it now that the shoe is on the other foot
They are basically just saying 'wuaah, the locked price deals are not supposed to benefit the consumers' so we shouldnt have to honor the deals we made.

I really hope they are forced to honor the deals they have made, or go bankrupt trying to.
The big-brains that signed up for locked prices long term dont deserve to be screwed over.

j.gif


Sadly im not one of those big-brains, but i do like watching companies lose against the consumers every now and again.
Especially when its their own greed that made it possible for consumers to win in the first place.
 

Kroffe

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Well over here, they didn't really try to honour them - just immediately went bust.
The way i understood it for the companies here is that it probably wont spell doom for most of them, since not many people are locked on to those sort of deals in the first place.
It will however be highly unprofitable&expensive to honor those deals, but that is sort of the point of those deals.
Consumers overpay to get the the added security that any sudden price increases will be taken on the chin by the energy company instead of them having to deal with it.

Its not like consumers can just pull out of the deal if energy suddenly becomes super cheap, same should apply to the companies now.
Its obviously not great if all energy companies go bankrupt, but the way i understood it from the little ive read about it is that most of them can pay for it, but doing it is not going to be very fun.

Its only fair, life is not supposed to be fun.
And that, my friends, is the biggest Cushon! of them all.

 

dunover

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Energy companies in Sweden are trying to get out of having to honor the 'locked' price deals that people have signed with them.
Most dont take those fixed price deals because unless something unforseen happens that increases the price of energy a lot its just not a good deal.
Funny how they are ok with overcharging people but they dont like it now that the shoe is on the other foot
They are basically just saying 'wuaah, the locked price deals are not supposed to benefit the consumers' so we shouldnt have to honor the deals we made.

I really hope they are forced to honor the deals they have made, or go bankrupt trying to.
The big-brains that signed up for locked prices long term dont deserve to be screwed over.

View attachment 172201


Sadly im not one of those big-brains, but i do like watching companies lose against the consumers every now and again.
Especially when its their own greed that made it possible for consumers to win in the first place.
As slot zombie said, here it became impossible for them to honour the deals and they did indeed go bankrupt. 29 of them. The wholesale prices increased by a factor of about 10x their profit margin so they simply folded in days. The UK govt. bailed some of them out.
 

Kroffe

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As slot zombie said, here it became impossible for them to honour the deals and they did indeed go bankrupt. 29 of them. The wholesale prices increased by a factor of about 10x their profit margin so they simply folded in days. The UK govt. bailed some of them out.
They probably shouldnt have promised to deliver energy for a certain price for serveral years without knowing how much said energy would cost them, they gambled and lost.
Going bankrupt from honoring the deals they themselves have made points to a pretty poor business model.

I assume fixed price deals have been a more popular thing in the UK, because from what im reading the saving grace for many energy companies here in Sweden is that not many people have those long term fixed price deals.
Guess we will see what happens, does not look like they will let the energy companies weasel their way out of this.
 

dunover

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They probably shouldnt have promised to deliver energy for a certain price for serveral years without knowing how much said energy would cost them, they gambled and lost.
Going bankrupt from honoring the deals they themselves have made points to a pretty poor business model.

I assume fixed price deals have been a more popular thing in the UK, because from what im reading the saving grace for many energy companies here in Sweden is that not many people have those long term fixed price deals.
They were all the rage here, I always had them, mine expired in February and of course that was when the wholesale prices were going mad, so all companies stopped them apart from some doing absolutely mental offers like BG for £8200 a year. To be fair, you can't expect the energy companies to be clairvoyants.
 

ChopleyIOM

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Right, so you're saying in one year the UK MARKET has made £170bn profit for UK energy generators, power companies and BP/Shell?

Show me.

Up to £170bn over the next two years. (I didn't make any claims on one year.)

UK gas producers and electricity generators may make excess profits totaling as much as £170 billion ($199 billion) over the next two years, according to Treasury estimates that lay bare the revenue-raising potential of a windfall tax.

Treasury officials will deliver the assessment to the next prime minister when they take office on Sept. 6, according to a person familiar with the matter, who asked not to be identified discussing internal calculations.

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Kroffe

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They were all the rage here, I always had them, mine expired in February and of course that was when the wholesale prices were going mad, so all companies stopped them apart from some doing absolutely mental offers like BG for £8200 a year. To be fair, you can't expect the energy companies to be clairvoyants.
The problem is that the deals they were offering pretty much required them to be clairvoyants, at least that would be the only way to make it risk free.
Its like me promising a fixed price on apples for 5-10 years without knowing how good/bad the harvest will be the coming years, which of course i dont know, so i dont offer that deal to anyone.

That said i only use like 20% of the apples from my apple tree, so if you want some apples you can just come and pick some.
They are not very good, too sour, works in pies and stuff that have a lot of sugar but just eating them from the tree is no good.
 

ChopleyIOM

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They were all the rage here, I always had them, mine expired in February and of course that was when the wholesale prices were going mad, so all companies stopped them apart from some doing absolutely mental offers like BG for £8200 a year. To be fair, you can't expect the energy companies to be clairvoyants.

The problem was they had basically no capital or assets, they were just reselling and skimming their margin off the top whilst times were good, the second the market soured they ran away, kept the profits, and the taxpayer picked up the tab for their bankruptcies.
 

mack341

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The thing with a windfall tax you can set it where you want, doesn't have to be crippling, could be 25% or whatever. But just letting a load of investors, who may not even live here, make like bandits at the cost of the greater public [whose country's territory the energy resources come from] is mad.
 

Webzcas

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Up to £170bn over the next two years.
Yep and if what is reported is going to be believed, the govt will be borrowing £100bn plus over the next two years to cap the cap at £2,500 for the average household. One small problem though, we as the consumers will be paying this borrowing back over the next couple of decades via said energy bills.

Sorry, but Truss is missing an open goal if she does this. Nationalise them, as after all it is the UK's own resources that they are profiting from. The govt bailed out the banks in 2008, the govt spent billions on furlough on the pandemic, I'd argue this is just as bad a crisis if not worse
 

dunover

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Up to £170bn over the next two years. (I didn't make any claims on one year.)

UK gas producers and electricity generators may make excess profits totaling as much as £170 billion ($199 billion) over the next two years, according to Treasury estimates that lay bare the revenue-raising potential of a windfall tax.

Treasury officials will deliver the assessment to the next prime minister when they take office on Sept. 6, according to a person familiar with the matter, who asked not to be identified discussing internal calculations.

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I was gonna say, but it's bit disingenous - like saying between them Shell and BP will make $140bn over 2 years. The govt. need to take over the purchase of domestically-produced energy and gas and impose a 10% profit margin over costs of production, so our supplies are insulated mostly (aside from imported) from this mad auction process.
 

ChopleyIOM

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Ed Miliband on Sky News this morning, seems rather strange for a Labour shadow minister to be lecturing the Tories about fiscal responsibility, but there you go. He's repeating that £170bn figure for excess energy company profits over a two year period, which the Tories are choosing to allow to be squirrelled away into the pockets of the already super-rich, whilst loading £100bn of debt onto the UK taxpayer instead. (Remember, Labour's cap plan is paid for via windfall taxes on energy companies, not government borrowing.)

Also expect to see the ban on fracking lifted today (or soon), which was halted a few years ago because it was (a) Massively unpopular and (b) Caused, y'know, actual earthquakes and deemed to be unsafe. So much for England's green and pleasant lands eh?

As Miliband points out, fracking won't solve anything anyway, as not only will it take years to come online, the gas will just be sold on the same international markets as everything else, and in the meantime England will be getting literally cracked down the middle by rapacious energy companies eyeing yet more lucrative profits, safe in the knowledge that Truss will let them keep all of it.

Obviously what's ultimately needed here is nationalisation of the energy companies, so the UK can keep the energy it produces and generates, and sell it at a reasonable price to its people and businesses. The market isn't working, the market has failed, when government is going to spend ONE HUNDRED BILLION POUNDS of taxpayer money to stop people freezing to death, whilst 'the market' gets to keep all the profits, then capitalism isn't working as intended - that is a not a free market economy.

We also need a push for renewables, with massive investments into solar. nuclear and wind, but we also need to be pragmatic and accept that in the short-medium term, we will still be heavily dependent on fossil fuels, and that being the case, they should be the fossil fuels we can produce and generate ourselves, and we should do so for the benefit of the UK, not for the benefit of rapacious multinational corporations making out like bandits on the international markets - there's a far more important market that needs servicing, and that is the people and businesses of the UK.
 

ChopleyIOM

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I was gonna say, but it's bit disingenous - like saying between them Shell and BP will make $140bn over 2 years. The govt. need to take over the purchase of domestically-produced energy and gas and impose a 10% profit margin over costs of production, so our supplies are insulated mostly (aside from imported) from this mad auction process.

It's entirely relevant though, especially since Truss is talking about loading debt onto UK taxpayers for the next 10-20 years.

Oh how the Tories normally rail against 'loading debt onto future generations' (one of their main attack lines on Labour), and yet here they are, doing exactly that to protect the moneyed interests of their funders and backers.

Corporations = Good.
Hard working Brits = Get fucked.
 

Webzcas

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Obviously what's ultimately needed here is nationalisation of the energy companies, so the UK can keep the energy it produces and generates, and sell it at a reasonable price to its people and businesses.
Bingo! But they won't do it, as it goes against everything the Conservative Party stand for. It is however, common sense. Also no need for fracking either. Open more fields in the North Sea and restart coal power stations and god forbid ahhh coal mines, until such time we have enough Nuclear Power stations online alongside renewables to cover our requirements.

To put it bluntly, the UK has enough natural energy resources to ensure we are protected from the price volatility of the international energy markets.
 

mack341

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Got a feeling this could be labour's way back in, just this windfall tax issue alone. It feels like a common sense and fair measure, so average folk will start to wonder the wisdom of keeping MPs in power who are opposed to it.

You could take say 40 billion from this 170 and set it aside to build a nuclear power station, and another 45 towards the cap policy; the investors keep the other 85b as a compromise.

Now if the producers of the energy were the only suppliers to the public they wouldn't be able to justify 170 billion level of profits on the back of price rises to ofgem; similar to the area of water, you don't have 'middleman' billing companies buying water and reselling it to the public, there is just one water company in each area.

It is a phony market structure that doesn't lead to competition and lower prices, the billing firms competition to purchase enough energy raises the prices.
 

mack341

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Right so prices will still rise this october, but by considerably less than if nothing had been done.

£1971 plus 80% equals £3547 - whereas £2500 is around a 25% increase on £1971.

I have a feeling come october it's not going to look a very good policy by Truss, she's spending a lot of money and people will be disappointed prices aren't frozen at the current rate, they won't realise how worse it could look, they'll just see another 25% increase.


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paul7388

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Right so prices will still rise this october, but by considerably less than if nothing had been done.

£1971 plus 80% equals £3547 - whereas £2500 is around a 25% increase on £1971.

I have a feeling come october it's not going to look a very good policy by Truss, she's spending a lot of money and people will be disappointed prices aren't frozen at the current rate, they won't realise how worse it could look, they'll just see another 25% increase.


View attachment 172211
But given the fact everyone still gets the £400 payment means it has risen very slightly compared to nearly doubling.
 

Kroffe

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Hah, suck it energy companies.
This is the thread where we discuss UK&Swedish energy questions, right?

"Several electricity companies are investigating the possibility of terminating fixed electricity contracts with reference to force majeure, according to information to Ekot. But they have no reason to do that, the Swedish Consumer Agency believes.
- They are not prevented from delivering the electricity, says head of court Gabriella Fenger-Krog.

Several electricity companies are now investigating the possibility of terminating fixed contracts due to the cut-off of gas supplies from Russia, which is driving up electricity prices, Ekot reports.

Gabriella Fenger-Krog, head of legal affairs at the Swedish Consumer Agency, says that it is difficult to comment on the situation that has arisen because the information is still scarce.

But the authority's basic position is that the agreements should not be able to be torn up.

- In general, agreements must be kept, she says.

Since the electricity is mainly produced in Sweden, the Consumer Agency makes the assessment that the companies are not in any way prevented from delivering electricity to customers - even if they do not want to do so at the lower prices.

- Since the companies can deliver electricity, we judge that this is not a force majeure situation. You are not in any way prevented from doing so and there is no reason to cancel the agreement."
 

mack341

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Hah, suck it energy companies.
This is the thread where we discuss UK&Swedish energy questions, right?

"Several electricity companies are investigating the possibility of terminating fixed electricity contracts with reference to force majeure, according to information to Ekot. But they have no reason to do that, the Swedish Consumer Agency believes.
- They are not prevented from delivering the electricity, says head of court Gabriella Fenger-Krog.

Several electricity companies are now investigating the possibility of terminating fixed contracts due to the cut-off of gas supplies from Russia, which is driving up electricity prices, Ekot reports.

Gabriella Fenger-Krog, head of legal affairs at the Swedish Consumer Agency, says that it is difficult to comment on the situation that has arisen because the information is still scarce.

But the authority's basic position is that the agreements should not be able to be torn up.

- In general, agreements must be kept, she says.

Since the electricity is mainly produced in Sweden, the Consumer Agency makes the assessment that the companies are not in any way prevented from delivering electricity to customers - even if they do not want to do so at the lower prices.

- Since the companies can deliver electricity, we judge that this is not a force majeure situation. You are not in any way prevented from doing so and there is no reason to cancel the agreement."

In general Kroffe do Swedes heat their homes via gas boilers and radiators or through electric heating panels/fires?
 

ChopleyIOM

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Here's a useful quick guide by Martin Lewis.

Obviously it's good that Truss has done something, but there was almost literally no way she could have done nothing, so the bone of contention here is how she's chosen to pay for it, which means that this is essentially just a 'buy now, pay later' scheme for the UK taxpayer, since it's all going back via taxes (plus interest, as government debt is interest bearing). That £170bn in excess profits the privatised energy companies are projected to make? They get to keep the lot. Whereas the UK taxpayer gets a bill for £100bn, plus interest.

1662645640492.png
 

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