130 billion debt - Truss

[Stephthegreat]

Truss, misguided as she is, has announced a 130 billion bailout for the energy companies. Why saddle our dcs with this enormous debt because, let’s face it, it will be paid back down the line.

Truss completely ruled out a windfall tax.

What next? I fear for our country, we have just had one clown and now we have this no hoper.

Yes it’s only £8bn from WFT and has downsides, hence recent press releases against

I’ve seen posts re £170bn profit being bandied about, presumably Starmer statement. People have latched on to the higher figure but it’s not relevant to WFT figure

No matter what the Government does, people and businesses do need to reduce their use of energy.

It seems to me that we are in a life raft and there is a limited amount of food. Instead of ensuring that the limited supply lasts, this Government is just subsidising the cost of it.

It's good that there is a plan to reduce the cost. But we need to look at the demand and ensure that we can have access to enough gas. Who knows how much more the price will increase, and this subsidy will cost?

Plus there is the business cost - which is only for a few months. Then what?

Plus there is the business cost - which is only for a few months. Then what?

What is available for businesses...

A scheme for businesses, schools, hospitals, other public organisations and charities will 'offer equivalent support' but last for just six months.
'Vulnerable' industries, including pubs and hospitality, could then receive longer-term support that will be set out later.
A review in three months will decide which sectors should receive ongoing help.

So like I said... then what?

How much is all that going cost? not all businesses are struggling, rather perverse to be giving handouts to BP operations here in the UK....

Yet more universal help, for folk that really do not need it.

Alexandra2001
not all businesses are struggling, rather perverse to be giving handouts to BP operations here in the UK...

Didn't John McDonnell tweet something similar about Keir Starmer's 'short-term solution?

August -
Former shadow chancellor John McDonnell tweeted, “Freezing energy bills is right call, but short term solution of giving £29 billion of public money to energy companies with nothing in return either control or ownership or reform & back here in 6 months. Nothing extra to poorest to cope with existing bills.”

Presumably the next step is planned blackouts.

On their own figures, that is £29bn. The government is limiting the rise in energy bills and, whilst various figures have been quoted, that is clearly going to cost over £100bn. Stopping energy bills rising at all would be over double that figure. Labour's claim that it is a fully funded measure is not even remotely true.

But you have recognised on another thread the rise is cost compared to last year - so this price increase will effect usage

I understand taxable profit. Executive pay is deducted before arriving at the profit figure for a business. It is never part of taxable profit. Dividends for shareholders do come out of taxable profit (or at least, that part of it that is left after tax is paid) but are typically only a small percentage of that profit. The majority of taxable profit is retained by the business and used to fund capital expenditure. Which bit of that do you dispute?

Yes, there are tax breaks to encourage investment, so businesses would be able to continue to invest in themselves to some extent even if the government took all taxable profits. But my basic point remains. If you take away all their taxable profits, businesses have less money to invest in themselves.

@prh47bridge Your commenting on a policy you don't appear to know much about?

Labours policy was to freeze (at current cap £2000 ) for 6 months - cost 29bn, funded as they say.. thats means its fully funded.

Tory policy is to freeze for 24 months (new £2500 cap minus £400) - no details on funding nor how much it will cost, they can't say because gas could be 10x what it is now or go back to pre war levels.

TBF a 6 month policy changing as prices change is probably better than a 2 year fixed one.

You seem to be posting stuff that backs up my POV... Thankyou.

Alexandra2001
that means its fully funded

Labour have miscalculated according to the IFS and Full Fact.

Alexandra2001
You seem to be posting stuff that backs up my POV... Thankyou.

Voters rejected Corbyn/McDonnell in 2019.

This. How does nationalizing energy suppliers do anything to help global gas prices?

Even if we accept that people will be happy with a 6-month price freeze before energy prices shoot up, which I doubt, Labour's policy does not add up. It doesn't take into account that people use more fuel in winter and seems to have been based on a lower price cap than was actually announced. At the time Labour's policy was announced, FullFact reckoned that the actual cost just for direct debit customers will be around £5bn more than Labour's figure. The IFS reckons that the cost for all customers will be £8bn more than Labour's figure. So no, it is not fully funded. But then, nor is the government's scheme - as you say, at the moment that is completely unfunded, although they have said there will be a statement from the chancellor setting out the details soon. But even that is likely to be speculative based on uncertain future fuel prices.

However, these figures do suggest an answer to the question Starmer has so far refused to answer when challenged. To get £8bn from a windfall tax (in addition to the windfall tax that is already in place) would involve raising the tax rate on energy companies (those we can tax) from £65% to 75%.

Of course, if the Russian invasion of Ukraine collapses, as is looking possible, energy prices will almost certainly fall and this will all be academic.

The IFS reckons that the cost for all customers will be £8bn more than Labour's figure. So no, it is not fully funded

I ve yet to see any Govt or opposition claims of anything being "fully funded" actually be that, its just what they say... it sounds nice doesn't it.

Of course, if the Russian invasion of Ukraine collapses, as is looking possible, energy prices will almost certainly fall and this will all be academic

That i doubt, Ukraine is a long way from getting back to pre Feb 22 borders and even if they did, Putin would a: have to go and b; Russia would them have to have a moderate leader for the sanctions on both sides to be removed, as Russia wont resume gas sales (nor could we buy the stuff) until we lifted sanctions.

Happy to be corrected but the 65% figure refers to marginal ie after all allowances/previous rates taken into consideration and the WFT already announced doesn't happen if companies commit to investment in UK... which they have.

Again, i understand the WFT policy as being tax levied on the amount of additional profit realised by the higher gas price, not on profit they would reasonable have anticipated, that remains taxed at the current rate.

Maybe....but I think people will only do this when they get their bills.
There is so much misunderstanding about the price cap.

Businesses - that is a worry.

And even if Russia are forced out of Ukraine, it's unlikely that they will resume gas supplies to Europe.

This is what the Tories did to home insulation rates 🙄

twitter.com/planetofdub/status/1567858450910134273?t=M5xSpI_ecb82TIopxQpGvw&s=19

@GreenLunchBox

"This is what the Tories did to home insulation rates 🙄"

+++

That chart is just too depressing, we really are screwed with this bunch of fuckwits in charge.

Just how much do you think a windfall tax would raise OP?