The 34p until will now become the minimum as the cost drops it simply wont be passed on ever. Once we move to ev cars this new source of taxation will replace the duty on petrol etc.
The cynic in me might even consider it's been designed this way.
Energy Prices (Strictly NO referrals!)
- Thread starter DXP55
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The cynic in me might even consider it's been designed this way.
Soldato
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It would potentially take several years to pay it back even if we get below the 34p/kwh cost basis.
Indeed this is likely to be the new price for some time to come.
I have to disagree with your cynical assessment because a lot of this is coming from the Russia/Ukraine situation, and we didn't ask Russia to invade.
Your probably right but if I were in government, I would be looking at this as a solution for dropping fuel tax revenue
I guess the time to pay the 150bn back depends on how high current prices go and if we pay for energy or not?
If the cost goes below 34p will the government be pocketing the extra or the energy companies?
If the cost goes to (hopefully not!) £2 per kwh then fixing at 34p per kwh is going to take 5 to 6 times long or so to pay back for as long as the prices remain high.
This could be a never ending cycle if in 2 years the cost has rocketed more and the government decides to fix it again.
I don't think blanket fixing the unit price is a good idea and they should have set price ranges. That way everyone gets the same benefit to a point and then only the ones that choose to go over are penalised. It could even be up to 20kwh and then above that you pay the cap price.
If the cost goes below 34p will the government be pocketing the extra or the energy companies?
If the cost goes to (hopefully not!) £2 per kwh then fixing at 34p per kwh is going to take 5 to 6 times long or so to pay back for as long as the prices remain high.
This could be a never ending cycle if in 2 years the cost has rocketed more and the government decides to fix it again.
I don't think blanket fixing the unit price is a good idea and they should have set price ranges. That way everyone gets the same benefit to a point and then only the ones that choose to go over are penalised. It could even be up to 20kwh and then above that you pay the cap price.
Soldato
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If the cost gets below 34p then every unit bought at 34p will be paying back the debt slowly by the difference.
The debt fund should remain open/balanced until it's paid back, at that point there would not need to be extra taxes owed.
The longer the actual price stays above 34p the more we'll have to find to pay it back with.
I think it's the most practicable one right now. Maybe they can prep a tier based system for when the 2 years expires, if prices are still high by then.
The vast majority of shares in fossil fuel companies are owned by rich people, rich people own the vast majority of assets and your mortgage/debt is their asset, pension funds own less than 0.2% of BP and Shell shares:
Windfall tax on oil giants won’t hurt British pensioners, thinktank finds
Review by Common Wealth reveals that UK pension funds hold tiny fraction of Shell and BP shareswww.theguardian.com
He wasn't just lucky with his timing as in oversimplified terms he was betting that interest rates would not go up due to the economy not recovering as long as the wrong policies were maintained, whereas the conventional wisdom at the time was that the government policies favoured by parties like the supposedly wonderful Conservatives would restore economic health and such a recovery was just around the corner (if you remember the Conservatives kept missing all their economic targets, including on deficit reduction). He became the #1 most profitable trader in his company globally whereas his colleagues either didn't do as well or lost money, so if it was just luck then they would have done as well or better. The point is he knew austerity politics was nonsense and wouldn't work, as well as creating ever more inequality in terms of wealth.
The point he actually makes in criticising the academics is that they don't have the real world experience that people like him and his colleagues have and they are not paid well by comparison so you are not going to get the best people in those positions because the academics' mistakes are not punished by a huge financial loss and potential instant dismissal.
You are misrepresenting his points, there are a number of factors to inflation (including COVID and Brexit) and energy supply is a big one but the effect of that is that rich will go into a bidding war for ever more scarce resources driving prices higher and that more money has ended up in the hands of the rich due to government policy of giving cash which flows to them resulting in ever inflating asset prices and the unwillingness to tax this back which exacerbates the problem. You reduce this excess demand to lower prices and tax money out of the economy.
He says that ordinary people will have to reduce consumption (they can't afford £2500 a year for the average family and the business support is only for 6 months, whereas the super rich could easily afford higher bills and Truss' plan has made it even easier and they will be rewarded through their shares in fossil fuels) rather than the super rich who consume the lion's share of our energy, this is the wrong way round and will result in ordinary people going cold (I don't understand why you don't realise this). Most business owners are not rich (at least not in the sense that we are talking about here).
There is less energy, just because we are paying more that doesn't mean there isn't less energy to go around. We will have to pay any increases in prices through taxation on ordinary people over time, that money then flows to rich people. How are ordinary people going to afford this? Why is the burden landing on us? I suppose you don't care if the rich keep bidding the price up, meaning we have to pay more, as long as this sham cap hides it in the short term. They will get ever fatter dividends in addition to having us pay for it, so that's brilliant then and it will not cost them a penny (the money flows in a circle back to them).
The alternative is a progressive tax based on usage, a wealth tax, as well as a windfall tax on the fossil fuel companies (with exceptions for disabled/ill people who need to run lifesaving equipment, hospitals, small businesses etc); this would reduce the energy used by the super rich (as I said, the lion's share) and would solve the problem at a stroke. You also transition to clean energy much faster using this extra revenue and insulate homes which means ordinary people would require less energy to heat them.
Most pension funds don't just own share directly, they will be invest in them via a 3rd party.
Not that who owns the UK energy companies is that relevant to this. I suspect most of the owners are overseas, so taxing them isn't going to affect UK energy consumption (and unlikely wouldn't if they did live in the UK).
I'm not misrepresenting his points, I'm only commenting on what he said and nothing else. The bidding war for energy isn't done by rich individuals, it's done by energy supply companies and countries that can afford it.
Most of his facts are very vague too, the average rich person? What definition is that? And they all gained in "Cash" £100k-200k during COVID. The implication that is £100,000 more that they would have normally made.
So these are the people he's concerned with. I'm sure they wouldn't be cutting their energy usage cap or not.
Suggesting that if the rich cut down on their energy use, and the rich in this case appears to be less than the top 1%, but lets be generous and say the top 1%. If they didn't use any energy at all it would hardly make a difference to our overall energy consumption.
So his main point is silly. There aren't enough rich people to consume the lion's share of our energy.
If we pay for the energy the UK won't have less energy, other countries will have less energy. Both him and you don't seem to have got this basic fact.
He says "The energy is not there", "there is a limited amount of energy available" <This is complete BS, the UK has enough energy, certainly for domestic use and probably for all usage, it's the price were are paying that is our problem.
He's obsessed with reducing the energy consumption of the rich as if that will fix the problem. lol (He repeats this same argument multiple times during the video)
Mentioning the times top 250 people at the end, I mean WTF. He doesn't even seem to grasp the difference between profits and asset value increase. (I'm sure he does, but that doesn't make a good video for his audience)
The more I watch him the worse he looks.
You comment on the poor going cold as a result of the rich being part of the cap? The poorest are getting additonal help so most of them the Cap is in the effective region of £900 - £2100, unless they live in larger houses or have special needs.
Not sure why you need to mention most business owner aren't rich as my only mention of business was they have an incentive to reduce usage, no suggestion they are rich at all.
Back to the point I raised a few days ago before the temporary forum shutdown.
What does the £2500 cap mean in actual % terms on the Kw or Gas unit cost? I am having great difficulty convincing my missus that we will not be paying £2.5k, based on our current usage of around £1100pa. At one point I was calculating with the £400 rebate we might even be marginally better off.
What does the £2500 cap mean in actual % terms on the Kw or Gas unit cost? I am having great difficulty convincing my missus that we will not be paying £2.5k, based on our current usage of around £1100pa. At one point I was calculating with the £400 rebate we might even be marginally better off.
Soldato
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Energy Prices (Strictly NO referrals!)
Cheers... It's kinda clear as mud on that from all the different places I have looked. If they could just have kept it simple with unit rates, instead of average use, and what additional support people are getting then it would be less confusing. Yes they've latched onto average use because...
forums.overclockers.co.uk
Only if Europe rushes back into Russian gas. Highly unlikely.
Associate
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The UK imports 8-9% gas from Russia btw.
Zero since June. The UK is no longer reliant on the small amount of Russian gas it needed before.
4% in 2021.
Also
Britain Imports No Fuel From Russia for First Time on Record
The UK imported no fuel from Russia for the first time on record in June as the government achieved its ambition to phase out all purchases of natural gas and oil in the wake of the invasion of Ukraine.
www.bloomberg.com
Which it will, Putin will be gone and relations will improve.
I suspect the war will be over in 6 months, Putin will be gone and things will be back to normal by next spring.
Soldato
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You are assuming putin will lose, the war maybe over in 6 months but relations wont be back to normal for a few years. Especially if he wins
Soldato
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A trading error will cost a French power distributor $60 million
Electricite de Strasbourg oversold large quantities of electricity this week.
Bit of a derp from France there
Also there's no guarantee the war will end in 6 months or Putin will be gone
What’s your point?
Associate
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Prices have increased more than 9%.
Because gas isn't really priced differently, they all track the market rate, no matter where it is from. So when 1 supplier (A large one in this case) suddenly stops producing, the "pool" of gas shrinks, but the people who need gas still have the same demands as before the supplier stopped supplying. So as with economics 101, less supply = higher prices.