Energy Prices

[lisvaneblue]

For months there has been a section of society really struggling to cope with the current situation regarding energy prices. From the beginning of next month, many of these people will have to find more than five hundred pounds a year more to pay for their energy before it reaches the level where the freezing of annual charges at £2.500 comes into force.

You have the means to pay £2,500 a year for your energy I presume as do I know because I qualified for the state pension in February, but, if all of this had been happening in 2021, I would not have been able to cope financially.

The proposals unveiled yesterday help, of course they do, but, for me, when faced with the choice between aiding people and money (business), the Tories, as they always do, have, effectively, sided with the money, What we've got is help today, which will have to be paid for by us, not the people who are really benefiting financially from the current situation, tomorrow - of course, it's better than nothing, but I think it's out of step with the current mood of the country.

My understanding is that will not be a freezing of annual charge. The unit price of energy will be set so that the average household will pay no more than £2,500.

And who are the 'we' that will have to pay for it, and who are the people really benefiting financially?

As Ive said earlier income tax generates less than 25% of government income, and around half of all adults do not pay any.

[SLUDGE FACTORY]

FT's editorial on it:
https://www.ft.com/content/b5dbef50-...6-cb1ee2682953

Liz Truss dislikes “handouts”, but she has shown a welcome readiness to be flexible when overwhelming need dictates. British families and households finally have some clarity that substantial support in paying crippling gas and electricity bills is on its way. The new prime minister’s bold package, including an energy price guarantee, is estimated to cost £150bn — more than double the Covid-19 furlough scheme. This is a huge sum, but so is the challenge.

Many more households will stay warm, fewer businesses will fail, and the economic slump this winter will feel slightly less grim. This will help to maintain resolve in the economic war against Vladimir Putin that the UK and its partners cannot afford to lose.

A two-year price cap for households is, nonetheless, a blunt instrument to tackle a multi-faceted crisis. The UK will be paying the cost for decades. As it subsidises costs regardless of income level, it provides a big giveaway to the better-off, while some of the most vulnerable will still struggle with prices at this level. The cap also lessens incentives to reduce consumption, though the price will still be significantly higher than prewar levels.

Precise details will need to be ironed out quickly. Many businesses will also be anxious about how they will cover costs after the government’s six-month price guarantee passes. Truss’s team may need to develop their package as the crisis evolves. Yet with many households and enterprises just weeks away from financial ruin, the government had to opt for speed.

The cap should pull down near-term inflation, reducing immediate debt interest costs, while also potentially easing inflation expectations. But the additional boost to demand may mean inflation proves stickier. And if wholesale prices go even higher, the government’s outlay to maintain the price freeze will increase.

After giving ground on “handouts”, Truss is determined to maintain her campaign pledge to reverse this year’s increase in national insurance and freeze corporation tax at current rates. If she goes ahead, however, borrowing will soar further, and there is little room elsewhere for cutting spending.

Revenue will have to be raised from somewhere. Sterling has crashed to its lowest since 1985 and gilt yields have pushed higher. Investors are jittery over the hefty borrowing and the risks that debt, already at 96 per cent of gross domestic product, could become unsustainable. The Bank of England will have to reassure markets that it remains committed to fighting high inflation despite the government’s intervention. A planned fiscal statement this month also needs to provide precise details on the funding plans, and an independent assessment by the Office for Budget Responsibility.

Attempting to boost energy security — in part by short-term steps to exploit more UK fossil fuels — and to reform pricing to better reflect the country’s energy mix are reasonable goals. But they must not detract from vital efforts to reduce long-term reliance on oil and gas and accelerate the transition to renewable and nuclear energy. In the near-term, gas supplies may become even more scarce, while the price cap might not restrain demand. That makes it vital for the government to push ahead with an information campaign for households and businesses to save energy and raise efficiency.

Today’s package is a crucial step in the battle against Putin’s weaponisation of gas. It will certainly not be the last. But the government must balance the urgency to protect consumers and win the economic war with the Kremlin with the need to preserve Britain’s invaluable reputation for economic prudence.

Is that from the financial Times?

Or the Conservative party ?

Or you ?

Your continual creeping up the asses of the Tories is vomit inducing

[SLUDGE FACTORY]

True, I know that, but it was better than not doing anything and ignoring the situation ( which appeared to be happening )

By the conservatives , yes

They were doing f all

[blue matt]

By the conservatives , yes

They were doing f all

But in the end they did do something, just in the nick of time

[goats]

But in the end they did do something, just in the nick of time

Still amazes me that anyone can tell any difference which political party is running the country, I’m 50, seen a few and just the same old sh*t with a different colour label. You pay tax, bills and your mortgage and earn a crust…….we live in a country of moaners so I guess there will always be something to fuss over.

[SLUDGE FACTORY]

You shouldn't be so smug. All Truss did was to delay YOU having to foot the bill (through increased taxes) in the future.

The tory idiots havnt done anything for ages , now they have .....but its half arsed

The tory boys on here are clapping like seals

[Dorcus]

But in the end they did do something, just in the nick of time

If they hadn't the whole economy would have likely collapsed about them. It's a bit like paying for a gas leak to be fixed before it blew half a street of houses down. They had no choice in the matter.

[William Treseder’s Mam]

But in the end they did do something, just in the nick of time

Yeah just waited for everyone’s bills to increase massively first. Phew just in time

[Eric Cartman]

It goes without saying that sometimes those who fall just outside the threshold for benefits are often in difficult positions and it won't be an easy winter.

In my position; I pay £65 a month to Shell for Gas and Electric. I routinely use around half of that, so there is a surplus. I anticipate it going up from October (not sure how much yet) but £66 will be knocked off that.

I would imagine your £182 doesn't include the £66 to be taken off, although I don't know.

None of this is perfect. We live in a time when the cost of fuel is extremely high due overwhelmingly to a war in Europe. But the announcement does mitigate against the worst excesses of what we would have faced and those on benefits are helped more.

So oil/gas companies are going to exceed usual profits by 170 billion over the next two years because we are at war. Shell and BP are going to take their part of that 170 billion and invest a fraction into the UK (potentially in things that don't align with the future energy security needs of the average punter) and pocket the rest.

Ordinary people - lose
Uk economy - lose
Oil/gas giants - win

We aren't debating whether or not people should be supported, we are debating why, yet again, during hard times (times of war even) the system is designed to make sure the rich keep getting richer.

I don't think there is any tangible evidence that having a windfall tax to pay for some of this support will affect future growth. Whilst not having one certainly will mean is a tightening of the belt in the future, worse education, worse healthcare, less police. For the first time in my life it really feels like the UK is a dead man walking.

I saw a picture on Reddit the other day of a car park tariff. £13 for one hour, £25 for two, etc. With the header something like 'you know there is something wrong when a parking space earns more than a person'. Something to ponder.

[goats]

So oil/gas companies are going to exceed usual profits by 170 billion over the next two years because we are at war. Shell and BP are going to take their part of that 170 billion and invest a fraction into the UK (potentially in things that don't align with the future energy security needs of the average punter) and pocket the rest.

Ordinary people - lose
Uk economy - lose
Oil/gas giants - win

We aren't debating whether or not people should be supported, we are debating why, yet again, during hard times (times of war even) the system is designed to make sure the rich keep getting richer.

I don't think there is any tangible evidence that having a windfall tax to pay for some of this support will affect future growth. Whilst not having one certainly will mean is a tightening of the belt in the future, worse education, worse healthcare, less police. For the first time in my life it really feels like the UK is a dead man walking.

I saw a picture on Reddit the other day of a car park tariff. £13 for one hour, £25 for two, etc. With the header something like 'you know there is something wrong when a parking space earns more than a person'. Something to ponder.

I know the UK government don’t want to pi$$ off the big foreign companies ie the oil companies ( anyone know who exactly owns them would be good to know?) but I think a compromise is needed as the profits are obscene and if it’s the Russians and Putin pocketing these profits then the world has gone mad.
I was paying £184 a month anyway due to my wife always being f in freezing so I guess I can crank it on up and not give a toss now…..

[Vindec]

The Labour Party has come up with a brilliant wheeze which many people believe. Let's use a windfall tax to pay for the energy increases and tax these nasty companies they say. That will go down well with the population.

The reality is that a second windfall tax (over and above the 65% they already pay) won't go anywhere near paying for the energy crisis but who cares if that brilliant idea will get one over on the Tories. They must think we are dumb but clearly the population must be if they really believe a second windfall tax is the answer to their problems. The amounts of money required are eye watering and it is only economic growth that will get us out of this mess. The public won't end up paying that much (only 30.3% of income tax is accounted for in government revenue) which is the belief of many. If the economy stagnates we are stuffed.

[Claude Blue]

The Labour Party has come up with a brilliant wheeze which many people believe. Let's use a windfall tax to pay for the energy increases and tax these nasty companies they say. That will go down well with the population.

The reality is that a second windfall tax (over and above the 65% they already pay) won't go anywhere near paying for the energy crisis but who cares if that brilliant idea will get one over on the Tories. They must think we are dumb but clearly the population must be if they really believe a second windfall tax is the answer to their problems. The amounts of money required are eye watering and it is only economic growth that will get us out of this mess. The public won't end up paying that much (only 30.3% of income tax is accounted for in government revenue) which is the belief of many. If the economy stagnates we are stuffed.

The "brilliant wheeze" is gullible people like you thinking these companies pay a tax rate of 65%.

Oil and gas companies pay 30% corporation tax and a supplementary rate of 10% They can reduce this by factoring in losses and decommissioning North Sea oil platforms. As a consequence, companies like BP and Shell have paid virtually no tax in the UK. They have very clever accountants and the fact that our current prime minister used to be one is purely coincidental

In fact both companies have actually received more money back from the goverment than tax paid every year since 2015.

In the three months to June this year Shell made a profit of £9bn and BP £6.9bn.

Explain again why we shouldn't have a windfall tax?

Can you explain the recent comments from the CEO of BP (I think) who stated that his company was like a cash machine and had more money than they knew what to do with?

[Vindec]

Explain again why we shouldn't have a windfall tax?

Where did I say we shouldn't have a windfall tax? What I was saying is that a second windfall tax would not go anywhere near paying for the energy crisis and the Labour Party has been very clever in convincing people that one would be of such significance.

You are correct that Shell and BP have very clever accountants and for the reason you explain these accountants would be able to dodge a second windfall tax in the same way they will be likely to avoid the first. I agree that the 65% tax rate is largely irrelevant and that few will pay much of it. So, why do you think a second tax is likely to be any better.

[Claude Blue]

Where did I say we shouldn't have a windfall tax? What I was saying is that a second windfall tax would not go anywhere near paying for the energy crisis and the Labour Party has been very clever in convincing people that one would be of such significance.

You are correct that Shell and BP have very clever accountants and for the reason you explain these accountants would be able to dodge a second windfall tax in the same way they will be likely to avoid the first. I agree that the 65% tax rate is largely irrelevant and that few will pay much of it. So, why do you think a second tax is likely to be any better.

I'm pleased that you now think there should be a windfall tax and that your 65% figure was bollocks.

The way around clever accountants is for the government to enact effective, watertight policy. Having a PM who was previously an economist for shell should help. Poacher turned gamekeeper if you like.

[Vindec]

I'm pleased that you now think there should be a windfall tax and that your 65% figure was bollocks.

The way around clever accountants is for the government to enact effective, watertight policy. Having a PM who was previously an economist for shell should help. Poacher turned gamekeeper if you like.

I didn't say we should have a windfall tax either. I said neither as you well know although I see you seem to have dodged the question when I asked when did I say there shouldn't be a windfall tax. The reality is that there is no such thing as a watertight tax policy as the clever accountants (as you describe them) will always find a way to avoid paying tax.As global companies, if they don't like one countries rules they will move their tax base elsewhere. Of course if anyone can convince me that a second windfall tax will come anywhere near funding the energy crisis then I'm in. But you know, as well as I do, that such a tax is unlikely to be the panacea His Majesty's opposition claim it to be.

[goats]

Where did I say we shouldn't have a windfall tax? What I was saying is that a second windfall tax would not go anywhere near paying for the energy crisis and the Labour Party has been very clever in convincing people that one would be of such significance.

You are correct that Shell and BP have very clever accountants and for the reason you explain these accountants would be able to dodge a second windfall tax in the same way they will be likely to avoid the first. I agree that the 65% tax rate is largely irrelevant and that few will pay much of it. So, why do you think a second tax is likely to be any better.

So unlike Labour (or any opposition party) to say they could do something and not actually have a clue what that means in real terms, you sure?

[Vindec]

So unlike Labour (or any opposition party) to say they could do something and not actually have a clue what that means in real terms, you sure?

Could someone enlighten me about what the above post from goats actually means? It makes no sense as it stands. Despite all the arguments back and forth nobody seems to have disputed the point, which was that a second windfall tax will not pay for the cost of the energy crisis, that some of the public including the occasional poster on here believe it will. Nobody seems to know either how much of the alleged £170bn that would be subject to tax will actually be taxable in the UK given the global nature of these companies. Of course any additional tax taken will be of benefit but let's not kid ourselves that a second windfall tax will pay for the crisis as was alleged (although not specifically said) by Starmer at PMQs on Wednesday.

[the other bob wilson]

The Labour Party has come up with a brilliant wheeze which many people believe. Let's use a windfall tax to pay for the energy increases and tax these nasty companies they say. That will go down well with the population.

The reality is that a second windfall tax (over and above the 65% they already pay) won't go anywhere near paying for the energy crisis but who cares if that brilliant idea will get one over on the Tories. They must think we are dumb but clearly the population must be if they really believe a second windfall tax is the answer to their problems. The amounts of money required are eye watering and it is only economic growth that will get us out of this mess. The public won't end up paying that much (only 30.3% of income tax is accounted for in government revenue) which is the belief of many. If the economy stagnates we are stuffed.

I’d say it’s all very, very simple - it’s just natural justice that companies like BP and Shell ( the company I was told would be my utility provider when the one I was with went bust last year) pay more than they are doing. I equate it to the more sympathetic reaction unions are getting with their pay claims this time around, most people can see that offers of, say, three per cent when inflation is running at more than three times that are unfair and insulting.

[Eric Cartman]

I didn't say we should have a windfall tax either. I said neither as you well know although I see you seem to have dodged the question when I asked when did I say there shouldn't be a windfall tax. The reality is that there is no such thing as a watertight tax policy as the clever accountants (as you describe them) will always find a way to avoid paying tax.As global companies, if they don't like one countries rules they will move their tax base elsewhere. Of course if anyone can convince me that a second windfall tax will come anywhere near funding the energy crisis then I'm in. But you know, as well as I do, that such a tax is unlikely to be the panacea His Majesty's opposition claim it to be.

Why would it need to come near to funding it to be worthwhile? Are you going to have the same opinion when the government cuts services to pay for this increase in debt? 'there is no point cancelling that as it won't fully pay off the debt', I doubt it.

I remember seeing a figure of 30-40 billion over 2 years being very achievable. That covers a decent part of the cost and ensures that people buy into it as those currently with the broadest shoulders have paid what appears to be a fair share.

The alternative is that oil and gas companies spend the next few years profiting from war, every British person funding their excess. That tickle your fancy?

[JamesWales]

Why would it need to come near to funding it to be worthwhile? Are you going to have the same opinion when the government cuts services to pay for this increase in debt? 'there is no point cancelling that as it won't fully pay off the debt', I doubt it.

I remember seeing a figure of 30-40 billion over 2 years being very achievable. That covers a decent part of the cost and ensures that people buy into it as those currently with the broadest shoulders have paid what appears to be a fair share.

The alternative is that oil and gas companies spend the next few years profiting from war, every British person funding their excess. That tickle your fancy?

If the profits to be made are as high as quoted, would we not receive a figure close to this through standard corporation tax anyway?

[az city]

If the profits to be made are as high as quoted, would we not receive a figure close to this through standard corporation tax anyway?

Keep up Jimbo, that's why it needs to be an extraordinary windfall tax at a higher level to provide more resources for the Truss price cap.

[Vindec]

Why would it need to come near to funding it to be worthwhile?

Because the impression given by the Party most on here seems to love and from various comments I have heard on radio phone ins is that the windfall tax is the answer to the energy crisis. Labour have played a blinder by duping people to believe that the windfall tax is the solution. It isn't. That is my point. As an earlier contributor pointed out the accountants in these global companies will ensure that as little tax is paid as possible whatever that tax may be.

[az city]

Because the impression given by the Party most on here seems to love and from various comments I have heard on radio phone ins is that the windfall tax is the answer to the energy crisis. Labour have played a blinder by duping people to believe that the windfall tax is the solution. It isn't. That is my point. As an earlier contributor pointed out the accountants in these global companies will ensure that as little tax is paid as possible whatever that tax may be.

That's a completely vacuous argument. If applied across the board, we'd have no laws or taxes using that logic because at least some people could/would avoid/evade them. Bonkers.

[Eric Cartman]

If the profits to be made are as high as quoted, would we not receive a figure close to this through standard corporation tax anyway?

I think the 170 is total excess profits by the big 5 potentially maybe more. The lower figure takes into account who would could actually get money from using a windfall tax.

[Eric Cartman]

Because the impression given by the Party most on here seems to love and from various comments I have heard on radio phone ins is that the windfall tax is the answer to the energy crisis. Labour have played a blinder by duping people to believe that the windfall tax is the solution. It isn't. That is my point. As an earlier contributor pointed out the accountants in these global companies will ensure that as little tax is paid as possible whatever that tax may be.

Of course they will but they also spend hundreds of millions trying to convince the public they are good people, so they won't want to be the primary vessel of blame for a widespread cost of living crisis.

You will remember that when the crisis began to heat up, the chief of BP mistakenly admitted that they had more money than they knew what to do with and that a windfall tax wouldn't affect future investment decisions, this isn't a message that the establishment/government/big business want the general public to hear so he was quickly put back into line.

I think they assumed they would get hit harder than they are being hit currently.