Energy Prices

[JamesWales]

Re: Energy Prices

I'm curious that Labour's borrowing during the global economic downturn was described as "reckless" yet all Conservative borrowing, never is.

Anyone who thinks all Labour borrowing was reckless and no Conservative borrowing ever is, is plainly a sectarian ideologue.

However, just like all Labour borrowing was certainly NOT bad, so too is not all COnservative borrowing, and the borrowing occuring here to (hopefully) stave off what may have been an absolute catastrophe is probably the right thing to do and provides some certainty to people over what we could have been facing.

[az city]

Re: Energy Prices

Anyone who thinks all Labour borrowing was reckless and no Conservative borrowing ever is, is plainly a sectarian ideologue.

However, just like all Labour borrowing was certainly NOT bad, so too is not all COnservative borrowing, and the borrowing occuring here to (hopefully) stave off what may have been an absolute catastrophe is probably the right thing to do and provides some certainty to people over what we could have been facing.

I see you've assiduously ignored the point I made about there not being any need to borrow above.

Explain why it doesn't make more sense to tax the excess profits of the energy generators rather than borrow to support the price cap.

[Lither_1927]

Re: Energy Prices

Plague Island.

Twerp lol

[splott parker]

Re: Energy Prices

There may be one less old age pension to fork out shortly, it may help.

[Vindec]

Re: Energy Prices

Explain why it doesn't make more sense to tax the excess profits of the energy generators rather than borrow to support the price cap.

I can't answer that but doubt anyone on here can. I'll have a go though but my understanding of the situation might be incorrect. My understanding is that the profits made by companies such as BP and Shell are earned globally and the excess profits won't fall to be taxed entirely in the UK. It was my further understanding that the £170bn profit, even if subject to a windfall tax applicable to the UK, would not generate anything like the sums required to pay for the level of government subsidy required. It seems to me that the noises made by the Labour front bench are disingenuous but the answer can only lie with the accountants of the companies concerned and HMRC.. Starmer and Co might be correct, and if they are, dismissing an additional windfall tax to the 65% these companies already pay, seems strange. But I suspect that Labour are playing politics with this as the profit generated by these companies will not be taxable in the UK.

[Ninja]

Re: Energy Prices

There may be one less old age pension to fork out shortly, it may help.

Nah.
You'll be paying for Charlie's jollies instead then, along with horse-face.

[splott parker]

Re: Energy Prices

Nah.
You'll be paying for Charlie's jollies instead then, along with horse-face.

I think we already are.

[Doucas]

Re: Energy Prices

https://www.walesonline.co.uk/news/uk-highest-household-electricity-prices-24954769

Highest prices in Europe.

[az city]

Re: Energy Prices

I can't answer that but doubt anyone on here can. I'll have a go though but my understanding of the situation might be incorrect. My understanding is that the profits made by companies such as BP and Shell are earned globally and the excess profits won't fall to be taxed entirely in the UK. It was my further understanding that the £170bn profit, even if subject to a windfall tax applicable to the UK, would not generate anything like the sums required to pay for the level of government subsidy required. It seems to me that the noises made by the Labour front bench are disingenuous but the answer can only lie with the accountants of the companies concerned and HMRC.. Starmer and Co might be correct, and if they are, dismissing an additional windfall tax to the 65% these companies already pay, seems strange. But I suspect that Labour are playing politics with this as the profit generated by these companies will not be taxable in the UK.

I don't think you are correct (note it's Bloomberg):

https://www.bloomberg.com/news/articles/2022-08-30/uk-predicts-up-to-170-billion-excess-profits-for-energy-firms?leadSource=uverify%20wall

I believe Truss wants to reduce the corporate tax rate because she's a believer in race-to-the-bottom (discredited) trickledown economics.

[dandywarhol]

Re: Energy Prices

It's the unit price which is capped.
Use more you pay more. Use less you pay less.
Energy has gone up 600 quid in October whilst the energy companies rack it in.
Even the likes of Shell energy who profess to be 100 % green charge the same price as the rest. The unit price for green energy has gone up 500%

[Dorcus]

Re: Energy Prices

If Truss didn't want to target help to the poorest in society because of ideological constraints then surely the least she could have done as a mere gesture would have been to have kept the energy cap at the same level as before instead of increasing it even further! Simples!

[Vindec]

Re: Energy Prices

I don't think you are correct (note it's Bloomberg):

https://www.bloomberg.com/news/articles/2022-08-30/uk-predicts-up-to-170-billion-excess-profits-for-energy-firms?leadSource=uverify%20wall

I believe Truss wants to reduce the corporate tax rate because she's a believer in race-to-the-bottom (discredited) trickledown economics.

Corporation tax won't be reduced for some time if ever; it's just that the planned rise probably won't take place but I agree the intention is probably to lower it even further. I also agree trickledown economics isn't the flavour of the month but in theory my view is that it makes a lot of sense. Tax businesses to oblivion and they will move elsewhere. Isn't that why we have so many French companies in the UK? In fact there are so many French people living in London they are represented by a French MP with London being the sixth largest French inhabited place on the planet with around 400000 residents.

I note the Bloomberg article but I believe some analysts I have heard on the radio were predicting a much lower tax take than Labour were forecasting and even the most optimistic forecasts will raise nowhere near enough to pay for the cost of the government intervention. It all helps I suppose but remain unconvinced that an additional windfall tax, over and above the 65% already payable, is not the panacea some claim it to be.

[JamesWales]

Re: Energy Prices

I'm not 100% sure I'm fully up on what Truss has done. Here's what I gather has gone on.

As I understand it, Truss is borrowing GBP130B to fund the price cap. Of course, that borrowing will have to be paid back over the long-run through raising taxes. That will reduce aggregate demand and thus economic growth even further on Plague Island.

I also am led to believe that energy producers in the UK are expecting supra-normal profits of around GBP170B through the energy crisis. Of course, they won't just dole that huge sum out to their shareholders, they'll use it to invest and grow the UK economy a la trickledown (note to Jimbo - I'm being sarcastic).

Jimbo, I just don't see this as good news. GBP170B > GBP130B. And then there's the apparent abandonment of climate change objectives. This is appalling.

You aren't very consistent Prof. This is what you said a few months ago about Britains borrowing debt. You seemed okay with it when it was something you supported (paying people to stay at home and lockdown the country etc) but less so when it's about subsidising peoples bills. In summary below, you said it's a "right wing trope" ( obvs! ) to complain about debt and repayments.

You even said it "never has to be repayed"

So do we take you seriously then, or now?

"First, UK austerity is now widely acknowledged to have been a huge own goal and a bust (cf Joe Stiglitz).

This "amazement" at borrowing and debt levels is one of the standard rightwing tropes that emerges from time to time before they slam the poor with austerity claiming it's about controlling public finances. For context, the UK's current GDP is around 3T. In your language that's GBP 3,000,000M. Does 17,400M GBP now seem that big? I think not.

A few other things that seem missing in your picture. The UK economy is not (as Thathcer said) like a household. The National Debt never has to be repaid. That is a crass oft-peddled misunderstanding of the macroeconomy. Debt has to be serviced sustainably to maintain confidence in the currency but the debt can revolve forever. Effectively it means the UK has to cover its interest payments so the ROW is confident it will continue to do so and carry on buying its debt instruments."

https://www.ccmb.co.uk/showthread.php?451360-17-384-Million-Pounds&p=5256990#post5256990

[az city]

Re: Energy Prices

You aren't very consistent Prof. This is what you said a few months ago about Britains borrowing debt. You seemed okay with it when it was something you supported (paying people to stay at home and lockdown the country etc) but less so when it's about subsidising peoples bills. In summary below, you said it's a "right wing trope" ( obvs! ) to complain about debt and repayments.

You even said it "never has to be repayed"

So do we take you seriously then, or now?

"First, UK austerity is now widely acknowledged to have been a huge own goal and a bust (cf Joe Stiglitz).

This "amazement" at borrowing and debt levels is one of the standard rightwing tropes that emerges from time to time before they slam the poor with austerity claiming it's about controlling public finances. For context, the UK's current GDP is around 3T. In your language that's GBP 3,000,000M. Does 17,400M GBP now seem that big? I think not.

A few other things that seem missing in your picture. The UK economy is not (as Thathcer said) like a household. The National Debt never has to be repaid. That is a crass oft-peddled misunderstanding of the macroeconomy. Debt has to be serviced sustainably to maintain confidence in the currency but the debt can revolve forever. Effectively it means the UK has to cover its interest payments so the ROW is confident it will continue to do so and carry on buying its debt instruments."

https://www.ccmb.co.uk/showthread.ph...90#post5256990

What third-rate college did you go to that didn't explain the difference servicing a debt and paying it off?

What exactly is "Britains (sic) borrowing debt"? Is there a non-borrowing debt? Never heard of it.

To summarize for you, Tory Boy, you clearly believe (based on your stance) it's better for taxpayers to cover the cost of Truss' energy cap than for it to come from the excess profits of the energy providers.

You haven't engaged with my points about the energy cap and borrowing.