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Err, no, not really

The stories are widespread. As the Guardian notes, more than 3 million households had their power cut off last year because they were unable to keep up with the demands of the prepayment meters.

Not really:

Ministers are being urged to stop the forced installation of prepayment meters after revelations that 3.2 million people – the equivalent of one person every 10 seconds – were left with cold and dark homes last year as they ran out of credit.

There were 3 million instances of people forgetting to put credit on their cards perhaps. Not, really, the same thing.

The FT has a prediction from financial services regulators that up to 750,000 households may default on their mortgages before this crisis is over, which is 9% of all mortgages in the UK.

No, not really:

More than three quarters of a million UK households are at risk of defaulting on their mortgage payments in the next two years, the country’s top financial regulator has warned.
In a letter to the House of Commons Treasury select committee on Wednesday, the Financial Conduct Authority said about 200,000 households had fallen behind on their home loans by mid-2022.
The watchdog said a further 570,000 households were “at risk of payment shortfall” within the next two years, because their mortgage costs will be more than 30 per cent of their income.

Again, really rather different.

And meanwhile in the US inflation has fallen for the sixth month in a row (wholesale fuel prices are falling there faster than in Europe) proving, yet again, that the Fed never did need to raise interest rates there,

That rising interest rates might have had an effect upon the inflation rate is something to ponder, but not for The Potato. Like, say, the US raised rates earlier and higher than the UK, the US inflation rate is falling earlier, faster and further than that in the UK…..

Oh well, got to sell disaster because if you don’t then how to stampede people into idiocy?

20 thoughts on “Err, no, not really”

  1. How glad I am that my electricity meter is about 70 years old.

    And one does wonder if US fuel prices would have fallen even faster if Biden didn’t hate fracking so much. And the Keystone pipeline extension too of course.

  2. Strangely coincidentally (not really), I’ve been watching a program from the twenty teens on YouTube called Benefits Britain.
    Two seasons of people complaining that their benefits aren’t enough and they’re hard done to, can’t afford basics like leccy and gas, food, etc.

    Yet they all seem to be able to afford booze and fags. A common occurrence is they get a windfall, yet instead of settling an outstanding debt with eg. the gas company, they will get a tattoo or go on a bender.

    Far more likely, as you say Tim, they just haven’t put money on the leccy or they’ve made bad decisions.

  3. “There were 3 million instances of people forgetting to put credit on their cards perhaps. Not, really, the same thing”.

    Or unable to put any money on the card because they don’t have any money and therefore will not have any gas or electricity, effectively, as one person on the Toady programme this morning said “disconnecting themselves”?

  4. As Chernyy Drakon observes, it’s hard to appreciate how limited some peoples mental time horizons are. Put in terms of economics, their time preference rates are exceedingly steep. Something like 50% over a 7 day period. Which is why they’ve ended up in the straits they are in the first place.

  5. In fairness to the first element of the stories this is an old scandal – once you’re on one of the prepayment meters it’s almost impossible to get it removed – you really do have to basically spend hours on the phone (And I’m talking 20 years ago when I did this on a relative’s behalf) and go through a succession of hoops which would try the patience of a saint.

    I don’t demur from the assessment of the great Chernyy Drakon of the denizens of Benefit Street (And one of the companies I worked in had a site in Ebbw Vale which was the epitome of what he is describing) but the privatized utilities aren’t likely to be polishing their halos soon. As for Murphy he’s increasingly reminscent of some deranged street preacher. As several commentators have said I do have some concern for his mental faculties. Indeed if I were him I’d be looking at a full health check with multiple MRIs to check for serious illness.

  6. Bloke in the Fourth Reich

    Van Patten,

    Because people whose creditworthiness is so shot even utility companies won’t bill them monthly have a steep hill to climb to prove they are once again (or for the first time) creditworthy?

  7. BiFR

    Absolutely – but even taking that into account it’s still not far off impossible. Even if you have 24 months of no CCJs or get yourself out of it it’s a complete bureaucratic nightmare like something out of Kafka. I don’t want to sound like Polly Toynbee or, God forbid, Murphy too much but ultimately I do think removal of these should be made easier.

    That said the quid quo pro of such an approach is the return of workhouses and debtors prisons for people who are like those Chernyy describes and the allocation of their social housing to those in straitened circumstances who do show a degree of responsibility.

  8. Once everyone is on a smart meter, they’ll be able to disconnect you for non-payment remotely; so the difference between pre-pay and post-pay will vanish. (Some would say that’s the plan all along.)

    On mortgages, % of income is meaningless. My mortgage is over 40% of post-tax income but I’m in no danger of defaulting, because said income is quite high in the first place. If rates go much higher I might have to extend the term, but it’s hardly the end of the world.

  9. Power cards are just one of the many ways in which poor people are kept poor. Often due to their own bad choices, but that doesn’t help us much. We’d prefer people not to be poor.

    So how do we stop people being so bloody poor?

    By making energy as cheap as humanly possible. Y’know, the exact opposite of what the British government is doing.

  10. Bloke in the Fourth Reich

    24 months of no CCJs means no other sucker was stupid enough to lend to you in the last 2 years.

    Perhaps the utility companies chould have some scheme whereby you pay 6 months up front to be on the usual monthly payments. Keep it up for a year and you can wind down that deposit over the next year.

  11. Re pre-payment meters, they don’t seem to be that much more expensive. The most recent price cap limits normal meters to £1,971/yr and pre-payment to £2,017/year – less than £1/week extra. Hardly worth losing sleep over.

  12. A long time ago, when I was still single, I worked on the big reclamation project at Ebbw Vale, spent a year there in a draughty portacabin, fun times.

  13. Smart meters, of course, can be switched from credit to prepay remotely, so it gets much easier (for the supplier) if you have one. Another reason not to!

  14. The BBC’s website story is about an elderly lady who had run up arrears while she was in hospital recovering from something and was thyereafter switched onto a prepayment meter against her will. The unanswered question is “how did she run up arrears *serious enough to provoke her energy supplier into this action* while in hospital?”. The daily connection charge is irritating but not enough to cause this; also her state pension continued to trickle while she was in hospital and her other outgoings should have reduced, making it easier to pay her bills.

  15. Bloke in the Fourth Reich

    I have olds who won’t pay their bills by direct debit because they are terrified – they physically take the paper bill and go to the bank, no, all banks closed, so post office, no, that is gone as well, so SPAR, no, also gone, the petrol station/convenience store with the odd name, and pay the bill there. In cash, withdrawn from the till by cashing a cheque. Or maybe they have to use a bank card now, finally dragged into the 20th century.

    Now that could happen, but you’d have to be in hospital a long time for the supplier to get sufficiently knotty about it.

  16. “Oh well, got to sell disaster because if you don’t then how to stampede people into idiocy?”

    Worked pretty well for the Net Zero lunacy, not surprising they try it elsewhere

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