Energy price rises and price cap discussion.

[AM9]

Just a thought but perhaps something like the student loan system would work for households, so that people only had to make repayments when they had enough income to support them?

That would only be viable as with student loans if there was a real prospect of the borrower's financial position improving to a level that would accommodate the loan repayments. Otherwise it would effectively be a straight grant. A better guarantee of repayments would be a charge against the property, - that would only become immediately payable when the property was either sold or transferred by probate.

 

[duncanp]

Imagine if we have a very long, very cold winter like we did in '09 and '10, the phrase which includes a reference to 'S*** Creek' won't begin to cover it.

It is not only the UK that is suffering this problem.

Germany is likely to suffer a similar fate.

The difference will be in how each government reacts to the issues involved.

How decades of complacency have left Germany facing a cold, dark winter

Betrayed by its own elite, the country is at risk of social unrest

www.telegraph.co.uk

How decades of complacency have left Germany facing a cold, dark winter​

Betrayed by its own elite, the country is at risk of social unrest

Germany is facing its worst winter for 75 years. The impending catastrophe risks crippling its economy, sweeping away its government and bringing chaos to the heart of Europe.

In 1946-47, perhaps half a million Germans starved or froze to death in their ruined cities. Older Germans still shudder at the memory of the “Hunger Winter”. Some blamed the Nazis, others the Allied occupation. In fact, the British sent food, fuel and clothing they could ill afford to spare themselves.

Now Europe’s largest economy is heading for a winter of recession, rationing and possible blackouts. This time, though, there is nobody to blame except Germany’s complacent – and in some cases corrupt – political establishment.

As Vladimir Putin chokes off Russian gas supplies – already down to a fifth of their pre-war level – by closing the Nord Stream 1 pipeline for “maintenance” yet again next week, the lamps are going out for Olaf Scholz and his “traffic light” coalition of Social Democrats, Liberal and Greens.

'Autumn of rage'​

The Bundesbank has been predicting a recession and the latest figures show that business activity is already contracting. Inflation, which hit 8.5 per cent last month, is expected to keep rising along with the rest of the eurozone, probably into double figures.

Yet for historical reasons Germans won’t just accept high inflation as a consequence of the war in Ukraine. The world remembers the hyperinflation that undermined the Weimar Republic a century ago; only older Germans recall the hyperinflation after the Second World War, which lasted longer. For three years Germany’s only stable currency was American cigarettes. No wonder Germans have been allergic to inflation ever since.

It is true that Germans are not yet demanding big pay rises or going on strike. But energy prices are already rising exponentially. The country's one-year ahead power price has skyrocketed to almost €1,000 per megawatt-hour, a jump of more than 720pc since the start of 2022. If Putin turns off the tap, bringing the mighty German economy to a juddering halt this winter, there is a real danger of civil unrest.

Intelligence officials are warning that extremist organisations, such as the neo-Nazis of Combat 18, are planning an “autumn of rage”. As a foretaste, in the old Prussian town of Neuruppin near Berlin, there were ugly scenes this month as Scholz was shouted down by far-Left and far-Right protesters.

But the panic and indignation now brewing go far beyond the ranks of the “unteachable” extremists.

Germans sense that unaccountable elites have ceded control of their country’s destiny to Putin. The more they are must pay him for Russian gas, the bigger his war chest with which to perpetrate genocide in Ukraine.

Forcing Germany to be complicit in a colossal crime against humanity is a diabolical twist in the vengeance that Putin is now exacting upon Europe for backing Ukraine. According to The Economist’s Christian Odendahl, at present prices Germany will need to spend 8.4 per cent of its GDP on gas. Hitherto it was just 1 per cent.

Already preparations are underway for central heating to be rationed or even switched off, forcing residents to seek shelter in schools or town halls.

The country is scrambling to reduce its reliance on gas with a campaign to make households cut back, and a massive national effort has brought gas storage levels up to 81 per cent full.

Food prices, meanwhile, rose at a rate of nearly 15 per cent in July. Those who fear being unable to afford to heat their homes or feed their families are prey to angst and anger.

Actions have consequences... or do they?​

Few foresaw the Russian invasion of Ukraine, let alone its devastating consequences for Europe. But it is dawning on the German people that the seeds of the present crisis were sown over the quarter of a century from 1998 to 2022, under Angela Merkel and her predecessor, Gerhard Schröder.

These were the years of plenty for Germany, when Berlin dominated the European Union, ensuring that its export-led economy benefited from the single currency while loading the social costs on to its poorer neighbours. But Germany’s dirty secret was cheap Russian energy.

Under Schröder – who went on to become one of Putin’s “useful idiots” – German industry began to abandon its postwar reliance on coal and nuclear energy in favour of Russian gas and renewables.

In 2011, after the Fukushima accident, Mrs Merkel announced that all German nuclear power plants would be closed down. It was a pyrrhic victory for the Greens but backed by all the major parties. Public opinion had been turned against nuclear energy in the 1980s by the Soviet-funded “peace movement”. Now the Greens are the keystone of the Scholz coalition.

Even in the country’s present predicament, Robert Habeck, the Green Vice-Chancellor and Environment Minister, is refusing to reverse the exit from nuclear to alleviate the energy crisis, though it is still possible over time to reactivate a number of nuclear power stations.

Yet Berlin is demanding that 26 other EU member states make huge cuts in energy use this winter to help Germany – to the irritation of the Spanish and others, who don’t depend on Russian gas and recall lectures from Berlin during the eurozone crisis about actions having consequences.

For decades, the Kremlin acted as Germany’s geopolitical drug-dealer, tempting Berlin to become ever more addicted to the energy that fuelled its manufacturing, pharmaceutical and chemical factories. Now that the Germans are about to go cold turkey, they are discovering how cynically the national interest was betrayed by their politicians and captains of industry.

With Schröder as its salesman, a new Nord Stream 2 pipeline was built under the Baltic Sea — with the blessing of Mrs Merkel, who fended off Anglo-American pressure to cancel what was regarded as a threat to European energy security.

Last year, as Russian tanks massed on the Ukrainian border and Nato warned of imminent invasion, Gazprom redoubled its efforts to keep the flagship project on track.

The Russian energy giant poured €192 million (£163m) into an environmental foundation set up by Manuela Schwesig, the Social Democratic premier of Mecklenburg-Vorpommern — the state that hosted Nord Stream 2 and stood to gain most. She proceeded to denounce the US for opposing the pipeline, claiming that American sanctions were purely self-interested.

Putin’s stooges almost succeeded in persuading Scholz to defy his Nato allies. He dithered until the eve of February’s invasion before shelving Nord Stream 2.

Now, after six months of Europe’s worst war since 1945, some German politicians are once again calling for the pipeline to be opened “so that people do not have to freeze in winter and our industry does not suffer serious damage”, as Wolfgang Kubicki, Vice-President of the German Parliament, puts it.

Meanwhile Ms Schwesig has just been re-elected as leader of the Social Democrats in her state by a large majority. Schröder has yet to be expelled from the party, let alone sanctioned.

Germany’s Achilles’ heel​

This is the measure of Germany’s abject reliance, not only on Russian energy, but on the Russian state. For Putin, gas and oil were only ever a means to an end. He has always wanted to reduce the Germans — towards whom Russians have traditionally had an inferiority complex — to a status of servility.

Stalin only succeeded in dividing Germany. Putin seeks to turn the entire Federal Republic into his client state — and thereby impose his will upon Europe.

With the unerring eye of the predator, Putin grasped that energy was Germany’s Achilles’ heel. A single plant of a single corporation, the headquarters of the chemical and pharmaceutical giant BASF at Ludwigshafen, uses as much energy as Denmark.

Over the last 25 years, Germany’s craving for cheap energy led it into an unequal relationship with Russia — what the philosopher Hegel called “the dialectic of master and slave”.

Putin saw that some German politicians could be bought (Schröder), others bamboozled (Merkel), and still others bullied (Scholz). Other EU countries followed the German example by relying heavily on Moscow for energy, influenced by the evasion and ambivalence that has characterised Berlin’s policy for decades.

Germany, whose economy is substantially larger than Britain’s, has given just £1 billion in military aid to Ukraine compared to the UK’s £3.5 billion. The United States has given ten times as much as the EU. Yet Ukraine is a European country under genocidal attack.

The reluctance to provoke Putin that still prevails in wide circles of the Federal Republic is rooted in exaggerated notions of Russian military power, economic importance and cultural pre-eminence.

German fatalism about Russia’s ability to absorb casualties and yet win ultimate victory reflects folk memories of the Eastern Front. But Putin, unlike Stalin, does not have a vast conscript army at his disposal, he does not enjoy technical superiority and he cannot afford the war of attrition that he has unleashed. Nor are the Russian people united against an invading force in defence of their homeland. Only in Berlin do they think this is another Stalingrad.

This historical myopia has much to do with the long-standing German habit of subsuming the other nations that made up the Soviet Union into Russia. To this day most Germans have no awareness of the fact that the Nazis killed millions of Ukrainian civilians and devastated their country.

Ironically, many artists, writers and musicians who have fled Ukraine have found refuge in Germany. One example is the composer Valentin Silvestrov, who fled to Berlin aged 84 with one suitcase, full of his manuscripts. Once there, he discovered that Ukrainian music was unknown in Germany. Now that Silvestrov’s works are being performed, including at the Proms in London, the Germans are slowly waking up to the presence of a greater living composer than any of their own.

Many ordinary Germans, like the British, instinctively warm to the Ukrainian cause. The difference is in leadership – or lack of it. Chancellor Olaf Scholz, unlike Boris Johnson or Liz Truss, has shown only lukewarm support for Kyiv and has been implicitly rebuked by President Zelensky.

Hamburger grilled​

Although there is no suggestion that Scholz has been bribed to go easy on Russia, he himself has become embroiled in a corruption scandal. He is accused of helping M.M. Warburg & Co, Germany’s oldest and largest private bank, to avoid a €47 million fine in 2016, during his time as Finance Minister in the Merkel coalition.

The Hamburg-based bank is alleged to have made up to €300 million in a capital gains tax scam which came to light while Scholz was also mayor of the city state. Just as he finds himself facing an unexpectedly grim present and a positively terrifying future, his provincial past has returned to haunt him.

Last week the Chancellor was grilled by a committee of inquiry in Hamburg. The normally meticulous Scholz claimed not to remember any details about his meetings with Warburg’s former chief, Christian Olearius, who has now been charged with tax evasion. Germany’s safe pair of hands, whom millions had entrusted with the nation’s finances, is now accused of being cosy with tax-dodging bankers and being an unimpressive, even unreliable, witness.

In other ways, too, Scholz is failing to live up to the moral example set by the two great Social Democratic Chancellors of post-war Germany, Willy Brandt and Helmut Schmidt. At a joint press conference with Mahmoud Abbas in Berlin earlier this month, Scholz remained tight-lipped while the Palestinian leader delivered an anti-Semitic tirade, accusing Israel of committing “many Holocausts” against his people.

Schmidt, who concealed the fact he had a Jewish grandfather from the Nazis but as Chancellor was an outspoken philosemite, would not have been impressed by his fellow Hamburger Scholz. Nor would Brandt, who famously fell to his knees at the memorial to the Warsaw Ghetto Uprising.

Not for decades has anti-Semitism been such a threat in Germany: in July, Berlin’s Holocaust Memorial was desecrated with swastikas. Now, as Putin’s myrmidons massacre and deport Ukrainians near the site of Nazi genocide, while a quarter of the Russian Jewish population has emigrated in anticipation of pogroms, Germany needs a leader who is not afraid to denounce anti-Semitism even at the cost of diplomatic niceties.

After less than a year in office, Scholz’s personal ratings are plumbing depths never seen during Mrs Merkel’s 16 years at the helm. As Germans brace themselves for unprecedented hardships in peacetime, they are led by a weak and indecisive Chancellor at the head of a fragile three-party coalition.

Post-heroic, post-patriotic​

Wednesday’s visit to Kyiv by Boris Johnson – his third – to mark Ukraine’s Independence Day was hugely appreciated not only by Volodymyr Zelensky but by all Ukrainians. Yet it was a gesture of solidarity that did not occur – could not have occurred – to Olaf Scholz.

The German Chancellor’s only visit to the Ukrainian capital last June, accompanied by Emmanuel Macron and Mario Draghi, was an awkward, chilly affair that yielded little more than promises. This week, Scholz posted a short video message, concluding: “Our hearts are with you.” Ulrich Speck, a German foreign policy analyst, commented: “Hearts, yes. But not weapons.”

Johnson, by contrast, knows he is among friends in Kyiv – a friendship symbolised by Zelensky awarding him Ukraine’s highest honour, the Order of Liberty. It is impossible to imagine the lugubrious German Chancellor finding the Prime Minister’s pithy words: “While people [in the West] are paying energy bills, people in Ukraine are paying with blood.” Nor would Scholz echo him in declaring: “I believe Ukraine can and will win this war.”

For his part, Zelensky told his people that they had been “reborn” in the heat of war. “We used to say: ‘Peace’. Now we say: ‘Victory’,” he declared.

Highly educated Germans find it hard to empathise with such Churchillian sentiments. Jürgen Habermas, the eminence grise of German intellectuals, makes condescending comments about Ukraine as a primitive place, still captive to the nationalist illusions of the last century, unlike more sophisticated, “post-heroic” Germany. It doesn’t occur to the 93-year-old philosopher that without the heroism of its soldiers and civilians, Ukraine would by now have ceased to exist.

Prussian military prowess has long since given way to post-patriotic pusillanimity. Where Merkel and Scholz feared to tread and even Biden was hesitant, Johnson was the first to commit himself wholeheartedly to the cause and to visit war-torn Kyiv.

Many other nations – the Poles, the Baltic states, the Scandinavians and the Canadians among them – have been more supportive than the Germans, who owe Ukrainians the greatest moral debt.

Berlin boasts of handing out a handful of howitzers while dithering over clapped-out armoured vehicles. Meanwhile British arms and training, Turkish drones and American rocket artillery systems have proved decisive on the battlefield.

Sold down the Dnieper​

Although the Scholz coalition officially sides with Ukraine, the unpalatable fact remains that Germany and its EU partners are financing Russian aggression by paying vast sums for Russian gas.

Will they stand up to Putin in Germany when the enormity of the ordeal ahead becomes clear to everybody? Will public opinion continue to back even the present feeble commitment, or will the voices calling for peace at the expense of Ukrainians prevail? It is all too believable that at some point, probably early next year when gas storage facilities are empty, Berlin – and Brussels – will open negotiations with the Kremlin, regardless of Kyiv’s wishes.

Yet it is then that the ghosts of the past may rise up to intervene in the present. The thought of Germans and Russians redrawing the map of Eastern Europe at the conference table sends shivers down the spines of every Pole, Lithuanian, Latvian, Estonian and, of course, Ukrainian. On August 23, 1940, exactly 82 years ago this week, the Molotov-Ribbentrop Pact was signed, carving up Poland (which then included Lviv and other parts of present-day Ukraine) and the Baltic states between Russia and Germany. No German Chancellor wishes to be reminded of that precedent.

However, nor can Scholz risk presiding over an even deeper and more lasting recession than that caused by the Covid pandemic. Somehow he must steer a course between the Scylla of appeasing Putin and the Charybdis of economic ruin.

The tension between these positions is reflected in the tripartite coalition. Foreign Minister Annalena Baerbock and the Greens are the hawks, Finance Minister Christian Lindner and his pro-business Free Democrats are the doves, while the Social Democrats are deeply divided. The party leadership leans towards Moscow, the rank and file towards Kyiv. This explains why Scholz never says that he wants Ukraine to win the war, merely that they must not lose it.

The opposition Christian Democrats are only slightly more united. They too have a large wing that privately favours a negotiated peace, represented by their pro-business leader Friedrich Merz, and a smaller but not insignificant group led by the foreign affairs expert Norbert Röntgen, who hope for a Ukrainian victory. Merz has papered over the cracks by focusing on a campaign to reverse his predecessor Mrs Merkel’s exit from nuclear energy.

Meanwhile, the “understanding Putin” lobby has the support of both the hard Left Die Linke and anti-immigration AfD parties. German public opinion has slowly tiptoed away from its initial admiration for Ukrainian resistance and towards a compromise peace.

That subtle shift could soon become an overwhelming tide, once Germans are required to make real sacrifices. Vladimir Putin, we may be sure, is counting on it.

From October, Scholz will impose a gas levy on consumers to compensate energy companies for the cost of replacing Russian gas supplies. Germany’s biggest energy company, Uniper, was bailed out in July to the tune of £12.5 billion; it is now claiming another £18.5 billion of levies.

This policy is bound to be unpopular, since it redistributes tens of billions from the poor to the rich — curious thinking for a government of the Left. But this is nothing compared to the prospect of protests sparked by a national shutdown caused, not by a deadly virus, but by Putin’s energy politics.

A change in the air?​

Modern Germany has a volatile history of popular protest. It began with the revolution that toppled the Kaiser in 1918. The Nazis mobilised the masses to carry out their “national revolution” in 1933. A workers’ uprising in East Germany was crushed by Soviet tanks in 1953. Student protests brought about a cultural revolution in 1968. Uniquely bloodless and benign was the fall of the Berlin Wall in 1989. This was Germany’s finest hour.

The defiance that breached the Wall and sent the Soviet army home was a blessing, but the despair that Putin’s revenge may induce this winter will surely be a curse. Gas has given the Russian dictator coercive control over the German political class, which willingly acquiesced in its fate.

In Kyiv, Boris Johnson said: “I can tell you that we in the UK will not for one second give in to Putin’s blackmail.” Olaf Scholz is incapable of speaking like this — because he does not believe it. He has failed to frame the coming ordeal as a battle in which Germans must make sacrifices for their own liberty, not just Ukraine’s. People don’t mind his lack of charisma; they do mind facing a nightmarish winter with spineless hypocrisy at the helm.

Will it become so obvious by next spring that Scholz is unequal to the task that either he or his coalition are replaced? Can the centre of German politics hold — or are we about to see a terrible revolt of the masses against a discredited political establishment? It has happened before. It can happen again.

 

[Howardh]

Get away with 21/22? 22 is balmy. Do you have circulatory issues

Without invading my medical issues, you are on the right lines. My father was always "cold" in his later years and I seem to have inherited his medical issues; nit just that one either.

I read, amongst other "plans" there are suggestions that VAT as a whole should be reduced by 5%; don't agree with that, only agree with zero VAT on energy, the fiscal income missing from VAT on everything else is money that could be diverted to assist power bills directly; in fact as VAT is mostly non-essential items, couldn't it be increased by 2.5% and the balance diverted to cut power bills?

A 5% cut would cost an estimated £3.2bn a month or £38bn to keep in place for one year, according to analysis by the Institute for Fiscal Studies research institute.

That money should be directed to energy.

Liz Truss ponders VAT cut of 5 percentage points amid cost of living crisis

Tory leadership frontrunner understood to have discussed move, with final decision coming after contest ends

www.theguardian.com

Liz Truss is considering whether to reduce VAT by 5% across the board, which could save families £1,300 a year, it was reported.

 

[Trainbike46]

I've seen many instances of a certain energy provider increasing direct debits far above what the customer is actually using.

At least with pay on receipt people are paying for what they've actually used.



I'd say borrowing should be restricted to "needs must" at the moment, but you make a good case for this being one of those.

I agree we need to start ASAP, but I think the priority should be the support packages and getting those delivered.

After that, the government should absolutely look at a programme of insulation.

== Doublepost prevention - post automatically merged: 27 Aug 2022 ==



The UK needs to invest in nuclear energy.

All of the UK's operational nuclear plants are due to be decommissioned within the next thirteen years. Most of them before the end of this decade.

Sizewell B is likely to be life extended, at least

There are, presently, only two new plants confirmed, with a further three only proposed. I think those, plus at least one more, are needed.

Fully agree that the government needs to get a move on and approve some more new nuclear, and possibly look if construction at hinkley point could be sped up

 

[Bletchleyite]

What we could do is change the scope of VAT. It does these days include quite a few essentials, e.g. adult clothing and shoes. And it would help the beleagured hospitality industry if it was permanently removed from that, too.

If we could refocus it as a luxuries tax, so someone living a basic life would never pay any, then even 25 or 30% would be reasonable.

On another front, many are once again "predicting a riot" as they incorrectly did over COVID measures. I doubt it.

 

[birchesgreen]

On another front, many are once again "predicting a riot" as they incorrectly did over COVID measures. I doubt it.

Might well happen this time, starving and freezing people act a bit differently to folks inconvenienced by having to wear a mask in the coop.

 

[Howardh]

Might well happen this time, starving and freezing people act a bit differently to folks inconvenienced by having to wear a mask in the coop.

Think the key is the difference between being in difficulty yourself, and seeing those around you in difficulty who can't help for themselves - eg elderly/ill relatives, young children etc.

Example, for myself I can let stuff wash over me...not getting a doctor's appintment when I want, not getting a dentist, all that sort of thing. But when I was caring for mum (8o's, alzhiemer's etc) all that went out of the window and I would fight her corner and be a "bloody difficult man".

So basically while we might let ourselves sit in the cold huddled under next door's cat blankets, that's not a situation we want to see Uncle Eric in.

As alluded to above r/e tax, yes we should have a "super-tax" on luxury items, beyond me why we don't*. Anyone buying, eg, a £5000 TV can afford to pay double VAT on it. That money could be directed towards our power bills. It's a pity power bills can't discriminate on what the power's used for - eg indoor swimming pool should attract a higher tariff than a cooker!

*Silly me, it would affect rich Tory supporters and doners of course.

 

[DelayRepay]

I read, amongst other "plans" there are suggestions that VAT as a whole should be reduced by 5%; don't agree with that, only agree with zero VAT on energy, the fiscal income missing from VAT on everything else is money that could be diverted to assist power bills directly; in fact as VAT is mostly non-essential items, couldn't it be increased by 2.5% and the balance diverted to cut power bills?

The logic in cutting VAT is that inflation means the same amount of revenue could be collected even if the percentage was lower.

But the reality is that most businesses would not pass the difference onto consumers - many would not be able to. We saw this when certain sectors were granted a VAT reduction after Covid. It may help some businesses to survive though. It might negate the need for further price rises, in which case it would help to control inflation.

As alluded to above r/e tax, yes we should have a "super-tax" on luxury items, beyond me why we don't*. Anyone buying, eg, a £5000 TV can afford to pay double VAT on it.

The counter-argument is that the purchaser of the £5,000 TV has more than likely paid income tax at 40% and National Insurance on the money they used to buy it. Coupled with the existing 20%/£1,000 VAT, they may well think that's quite enough!

 

[Baxenden Bank]

The problem here is the price of gas isn't going to drop back unless Russia turns the taps back on and the West takes it so this isn't a short term problem its long term. So the government is going to have to lay it on the line that people will need to economise and it will prioritise those in most need this approach will also help stop the speculation that is forcing up the price of gas especially over last few weeks. Anyhow i can see this costing nigh on a 100B/year if commercial premises are included so the government needs to take other action. They need to suspend the current way the electricity market works where the last generator on the system set the system price for all generators and given gas power stations are the primary provider of generation they end up setting the system price linked to the day ahead gas price. Yet the nukes costs haven't gone up nor have the windmills or solar parks but their all benefitting.

How far should people economise? Do you know people sat there in the recent heat dome with their central heating on full blast? There is a limit to how much a household can sensibly economise, and having done so, their energy bills will still be sky high. Swapping all electricity use to Economy Seven times (presently 53% of daytime rates) will reduce the average bill but not to anywhere near last years levels. Then there is the anti-social nature of permanent night-shift living.

Having said that there are comments on The Times online today from a) a two person household using the washing machine three times per day, b) someone that refuses to wash-up by hand and so on.

There is an article in The Times today (paywall applies) which includes the following table:

What devices and appliances in your home will cost​

Item	Time	Cost Now	Cost from October
43-inch smart TV​	10 hours	14p	26.5p
Amazon Echo Dot ​	10 hours	0.58p	1.06p
Digital radio​	10 hours	0.2p	0.36p
Five minutes in the shower​	per shower	9p	18p
Playing Xbox​	10 hours	43p	79.6p
Electric radiator​	per hour	43p	78p
Vacuum cleaner​	per hour	21.3p	39p
Ring doorbell​	annually	£24.83	£45.55
Mobile phone charger​	per hour	0.14p	0.26p
Fish tank filter​	weekly	28.57p	52.4p
Charging the laptop​	2 hours	2.83p	5.2p
Charging electric toothbrush​	2 hours	0.11p	0.21p
Hair dryer​	15 minutes	15.59p	28.6p
Bathroom underfloor heating​	annually	£117.44	£240
4m x 5m heated swimming pool​	per day	£1.32	£2.42
Heated towel rail​	per hour	4.3p	7.8p
Dishwasher​	per cycle	24p	44p
Lightbulb​	per hour	1.8p	3.3p
Large fridge freezer​	annually	£69.15	£127
Electric kettle​	per litre	3.11p	5.72p

Table: The Times and The Sunday Times

The Ring Doorbell is of interest and providing lots of comment.

 

[Howardh]

The logic in cutting VAT is that inflation means the same amount of revenue could be collected even if the percentage was lower.

But the reality is that most businesses would not pass the difference onto consumers - many would not be able to. We saw this when certain sectors were granted a VAT reduction after Covid. It may help some businesses to survive though. It might negate the need for further price rises, in which case it would help to control inflation.


The counter-argument is that the purchaser of the £5,000 TV has more than likely paid income tax at 40% and National Insurance on the money they used to buy it. Coupled with the existing 20%/£1,000 VAT, they may well think that's quite enough!

Or if you read the Daily Mail, more likely to be "benefit scroungers or (illegal) immigrants kept in 4* hotels"!!!

 

[Sm5]

The counter-argument is that the purchaser of the £5,000 TV has more than likely paid income tax at 40% and National Insurance on the money they used to buy it. Coupled with the existing 20%/£1,000 VAT, they may well think that's quite enough!

that tax rises to 60% if your between £100-£125k, as an extra 20p in the £ is collected by way of removing your personal allowance gradually down to zero in that band, before dropping back to 40% when your personal allowance is at zero, (by £125k) then of course it climbs back to 45% at £150k

What are the tax implications of earning over £100K? – TaxScouts

One of the major tax implications of earning over £100k is that you can get taxed 60%. Learn more about the implications to stay as tax-efficient as possible.

taxscouts.com

Whats the point studying, becoming a high earner, if your money is taken away to be given to someone on benefits living across the street, who uses that benefit to take their families on holiday or buy that £5k tv with it ?

 

[DelayRepay]

Having said that there are comments on The Times online today from a) a two person household using the washing machine three times per day, b) someone that refuses to wash-up by hand and so on.

It always used to be that running a full dishwasher used less energy/water than washing up by hand. Whether that's still true (assuming the hand washing water is heated by gas), I am not sure. My dishwasher has a range of temperatures from 35 to 70 degrees so I wonder what temperature the 24p/44p quoted in the article relates to.

The Ring Doorbell is of interest and providing lots of comment

It stands out, but that's probably because it's shown as an annual cost whereas most of the other things on the list are shown over a much shorter period. If they'd shown it as 12.5p per day I doubt it would have raised many eyebrows.

 

[najaB]

It's a pity power bills can't discriminate on what the power's used for - eg indoor swimming pool should attract a higher tariff than a cooker!

One approach to that might be to follow the same approach as income tax - exempt the first x units from taxation, and then a sliding scale on the consumption above that threshold.

 

[DelayRepay]

Whats the point studying, becoming a high earner, if your money is taken away to be given to someone on benefits living across the street, who uses that benefit to take their families on holiday or buy that £5k tv with it ?

Exactly. I earn enough to pay 40% tax, but I had to study hard (and cover the cost of university tuition fees), I did professional qualifications at my own expense, and I work hard. I understand that as someone who earns a higher salary, I should pay more tax because I want us to have a welfare system that protects the vulnerable, provides for those who've fallen on hard times and makes sure the NHS is there to treat people who get ill irrespective of their level of savings.

But to suggest that I should face even more tax because I want to spend some of my money on an expensive TV doesn't sit comfortably. If there's a need to raise more tax revenue, deal with it up front by taxing income, not double-taxing the same money when I decide to spend it.

 

[Baxenden Bank]

It always used to be that running a full dishwasher used less energy/water than washing up by hand. Whether that's still true (assuming the hand washing water is heated by gas), I am not sure. My dishwasher has a range of temperatures from 35 to 70 degrees so I wonder what temperature the 24p/44p quoted in the article relates to.


It stands out, but that's probably because it's shown as an annual cost whereas most of the other things on the list are shown over a much shorter period. If they'd shown it as 12.5p per day I doubt it would have raised many eyebrows.

Regarding dishwashers, how many people actually run them full and thus most efficiently? For example do small households run it every day for convenience, out of habit, or only having a small amount of crockery. I don't have one, friends have one because it came included with their new flat conversion. Similar for tumble dryers, if you have one you will perhaps continue to use it for convenience whereas if you've never had one you will continue to manage without.

 

[66701GBRF]

As alluded to above r/e tax, yes we should have a "super-tax" on luxury items, beyond me why we don't*. Anyone buying, eg, a £5000 TV can afford to pay double VAT on it. That money could be directed towards our power bills. It's a pity power bills can't discriminate on what the power's used for - eg indoor swimming pool should attract a higher tariff than a cooker!

If I’ve saved up for something specific that doesn’t mean I can automatically afford to spend an extra 20% on it. Whats it got to do with you or anyone else where my electricity goes if I’ve paid for it? Maybe I’ll demand double the cost for charging electric cars since there are alternatives available that don‘t use electricity.

 

[Howardh]

One approach to that might be to follow the same approach as income tax - exempt the first x units from taxation, and then a sliding scale on the consumption above that threshold.

I've thought of that, and it sounds sensible and it can be done (NPower used to do that but in reverse!) however it would benefit me (single occupier) but not the faily of two adults and three children; but maybe different tarrifs could be employed for different circumstances - example, high users could pay a higher standing charge but lower cost per unit, and vice-versa for low users?

 

[Sm5]

if government reduces business tax but increase vat accordingly, would this set a level playing beyond online/offshore business and domestic ones that ensures sales in the UK are fully taxed in the UK, rather than booked off shore to avoid business rates in the UK ?

There could always be a loop hole added that reduces that liability if they are headquartered in the UK with a staff/income ratio… at the end of the day its taxable employment that matters with the off shore companies.

i once worked for a multi-bn US company that booked £100mns a year in UK sales, every order was booked in Shannon Duty Free zone.. Once that incentive went, they moved it to Bermuda.

 

[DelayRepay]

Regarding dishwashers, how many people actually run them full and thus most efficiently? For example do small households run it every day for convenience, out of habit, or only having a small amount of crockery. I don't have one, friends have one because it came included with their new flat conversion.

I am a one-person household and I run my dishwasher only when it's full, which is every few days. Some people think it's gross leaving mucky plates to fester in the dishwasher, but they always come out clean.

I had to buy more mugs because I was running out before the dishwasher was full.

Some things, like large pans won't go in the dishwasher. If I'm running a bowl of hot water to wash a pan, I'll wash whatever else is dirty by hand too.

Similar for tumble dryers, if you have one you will perhaps continue to use it for convenience whereas if you've never had one you will continue to manage without.

I have one and in the past I've always used it in the winter. In the summer I dry washing on the line in the garden.

I am going to try not to use it this winter. I've always used an airing rack in the spare room for delicate items that can't go in the dryer, but this winter I'll be using it for everything. I've just bought a couple of those little airing racks that attach to radiators to give me a bit more indoor drying space. The other thing I will be doing is wearing clothes more than once (unless actually dirty) - which is easier to get away with now I spend over half my week working at home

 

[Baxenden Bank]

If I’ve saved up for something specific that doesn’t mean I can automatically afford to spend an extra 20% on it. Whats it got to do with you or anyone else where my electricity goes if I’ve paid for it? Maybe I’ll demand double the cost for charging electric cars since there are alternatives available that don‘t use electricity.

To be direct, I'd prefer you had to pay an extra 20% (or even 100% VAT) on a high-specification consumer item than granny freeze to death. Call me a lefty do-gooder if you wish.

 

[Howardh]

To be direct, I'd prefer you had to pay an extra 20% (or even 100% VAT) on a high-specification consumer item than granny freeze to death. Call me a lefty do-gooder if you wish.

Agree, we have to put our own personal wishes to one side for the good of the nation. One argument against a super-tax is that if people stop buying luxury then there's the knock-on effect for businesses and workforce, but that would be a tiny % compared to the "normal" businesses that will suffer because peole can't afford to buy from them, and that they can't afford to heat their business premises.

 

[DelayRepay]

To be direct, I'd prefer you had pay an extra 20% (or even 100% VAT) on a high-specification consumer item than granny freeze to death. Call me a lefty do-gooder if you wish.

As I said, as a high earner, I am happy paying more income tax. I value the welfare state and I value the National Health Service, among other things. But the issue I have with the poster's VAT proposal is that I have already paid a high amount of tax when I earned the money. I don't want granny to freeze to death either but there has to be a fairer way to prevent this than taking £2,000 from me when I buy a new TV, given I would have already paid about £2,500 tax/NI on that £5k when I earned it.

== Doublepost prevention - post automatically merged: 28 Aug 2022 ==

Agree, we have to put our own personal wishes to one side for the good of the nation. One argument against a super-tax is that if people stop buying luxury then there's the knock-on effect for businesses and workforce, but that would be a tiny % compared to the "normal" businesses that will suffer because peole can't afford to buy from them, and that they can't afford to heat their business premises.

It's also a disincentive for me to work hard. Part of my income is variable compensation (i.e. a bonus, paid based on my own and the company's performance). I already lose about half of it to the tax man. Where is the incentive to work hard if I know I'm going to lose 40% of what's left when I try to spend it?!

 

[Sm5]

To be direct, I'd prefer you had to pay an extra 20% (or even 100% VAT) on a high-specification consumer item than granny freeze to death. Call me a lefty do-gooder if you wish.

Sounds a bit communistic to my ears.

If the levy of a £5k tv was 100%, watch the sales of £4999 TVs increase instead.

Everyone should look after their own granny, as very few people will look after someone elses..rich or poor. In other countries grannies live with family for that reason and socially maybe we should look after our grannies more, than leaving them on their own.

 

[Howardh]

Sounds a bit communistic to my ears.

If the levy of a £5k tv was 100%, watch the sales of £4999 TVs increase instead.

Everyone should look after their own granny, as very few people will look after someone elses..rich or poor. In other countries grannies live with family for that reason and socially maybe we should look after our grannies more, than leaving them on their own.

Is that a problem? Still getting £1000 VAT from it.

== Doublepost prevention - post automatically merged: 28 Aug 2022 ==

As I said, as a high earner, I am happy paying more income tax. I value the welfare state and I value the National Health Service, among other things. But the issue I have with the poster's VAT proposal is that I have already paid a high amount of tax when I earned the money. I don't want granny to freeze to death either but there has to be a fairer way to prevent this than taking £2,000 from me when I buy a new TV, given I would have already paid about £2,500 tax/NI on that £5k when I earned it.

== Doublepost prevention - post automatically merged: 28 Aug 2022 ==


It's also a disincentive for me to work hard. Part of my income is variable compensation (i.e. a bonus, paid based on my own and the company's performance). I already lose about half of it to the tax man. Where is the incentive to work hard if I know I'm going to lose 40% of what's left when I try to spend it?!

Where's the incentive for anyone to work when they see their hard earned wages disappearing into the electricity meter at home?

 

[DelayRepay]

Everyone should look after their own granny, as very few people will look after someone elses..rich or poor. In other countries grannies live with family for that reason and socially maybe we should look after our grannies more, than leaving them on their own.

My granny is long dead, but my mum is also a granny (although she hates being called that!) and I would never let her go cold. I would pay her bills, or she could come and live at my house (in practice she wouldn't as I'm 100 miles away from the rest of the family including her grandkids). But, like many pensioners, my mum lives in a house that's far too big for her. She doesn't need four bedrooms any more. So if she was struggling to pay the bills, there would have to be a serious conversation about downsizing. However she is fortunate that my dad made good pension arrangements, so at the moment she's not struggling.

 

[cactustwirly]

They won't and they shouldn't. We need to reduce our consumption.

Government help should solely be to smooth the effect so people have time to make those changes, plus helping them to make them via e.g. insulation.

If 42 degrees Celsius isn't a wakeup, perhaps the price will be?

For COVID things have eventually returned to "old normal". For energy, they cannot, will not and must not.

So you'd solve climate change by freezing and starving the less well off?

The solution is less consumption, don't ship crap halfway across the world from China.
The culture of leasing cars on PCP, getting a brand new car every year. Rather than using the same car for 5 years etc.

 

[Sm5]

Am waiting for someone to suggest electrically generating treadmills.

Burn bodily fats into electricity whilst getting healthier burning it off, and generating bodily heat at the same time.

most of us have a few kwh of dishwashing time around our waistline.

 

[najaB]

So if she was struggling to pay the bills, there would have to be a serious conversation about downsizing. However she is fortunate that my dad made good pension arrangements, so at the moment she's not struggling.

That said, unless there's a special reason to keep the house (e.g. it's been in the family for generations), then downsizing is probably a good idea anyway. She can get a house that is more suited to keeping her living independently, and the capital that's freed up can be put to work by way of investments that could well provide more of an inheritance than the house will.

 

[Howardh]

My granny is long dead, but my mum is also a granny (although she hates being called that!) and I would never let her go cold. I would pay her bills, or she could come and live at my house (in practice she wouldn't as I'm 100 miles away from the rest of the family including her grandkids). But, like many pensioners, my mum lives in a house that's far too big for her. She doesn't need four bedrooms any more. So if she was struggling to pay the bills, there would have to be a serious conversation about downsizing. However she is fortunate that my dad made good pension arrangements, so at the moment she's not struggling.

I take it's she's fully independent, if that were my gran I'd see if it's possible to "live" in a suitable room where everything is, bed, chair, TV, immediate clothing cupboard etc and keep that warm. Shame to have three rooms not doing anything, in her position I would live in one room (I'm doing that myself) and alter the unused ones into "summer quarters" such as chairs/table etc to sit in and enjoy the summer sun with a tea/something stronger!

I wouldn't reccomend any elderly taking in a lodger, on the grounds you don't know what you're getting and secondly the difficulty of evicting them even if the rental contract expires if they refuse to go.

One suggestion, if she has several friends locally, they could house-share so Monday we all go round to Edith's, Tuesday Fran's etc so in a cycle everyone can turn their heating off and use someone elses!!

 

[Dai Corner]

I wonder how many will be paying for more for their energy than they needed to having taken the advice of Martin Lewis, the Patron Saint of personal finance?

Quoted in the Sun back in February he said

The cap will jump by 54% from April 1 and the best fixed tariff available at the moment will still be more expensive than the new, higher level.

That means most consumers should stay on their supplier's standard variable tarriff, which is protected by the price cap.

I didn't see this article or other similar ones which no doubt appeared elsewhere and did my own research. I fixed my tariff until next Spring and although I'm paying a little more for the small amount of energy I've used over the summer I'll pay a lot less for the large amount I'll use over the autumn and winter. Overall I expect to pay less than half the typical bills based on the Government cap prices being talked about now to supply my fairly typical 3 bedroom house.