Hidden Tax on Energy Bills

Haarlem

It has been stated that the cost of Feed In tariffs is being paid for by a levy on all customers that averages this year £14.00

So the total undisclosed levy on the average user is now:-

Social Tariff £38
Carbon reduction £45 (last year low cost energy bulbs)
Feed In Tariffs £14
Total £97

Of course the true cost is lost in the industry's tariffs.

I feel this is wrong, and should be a clear addition to bills as an addition to VAT, because it is a tax

Fire_Fox

Who has stated this, what is your source please? In what sense is it a tax, aren't taxes usually paid to the government? Sounds more like an investment to me.

Premier_2

Haarlem wrote: »

...Carbon reduction £45 (last year low cost energy bulbs)...

Depending on which report you read, I thought the energy companies sent out the equivilent of about 6-8 bulbs per household.

The cost of energysaving lightbulbs in the supermarkets (ignoring the cheap subsidised ones) are about £2-£3 each. The stick type ones which the energy companies typically sent out are even cheaper.(about £1)

And the supermarkets would be making a profit on these.

The energy companies would have bought the quantities they did at much lower prices.

However, even at these higher retail prices, 6-8 bulbs would only cost £12 -£24. :cool:
(I'd be surpised if they paid more than £6 for the bulbs plus the cost of postage)

Haarlem

Premier wrote: »

Depending on which report you read, I thought the energy companies sent out the equivilent of about 6-8 bulbs per household.

I am quoting from a You and Yours programme earlier this week which was challenging the total amounts spent and its effectiveness by energy companies in meeting the Governments targets for carbon reduction. It was proving hard to audit these amounts, but it averaged out at £45 per customer, and the bulk of the claimed expenditure was on low energy light bulbs. If these targets had not been met they would have been fined. The totals claimed averaged at 10 bulbs per household. Don't forget they were not only sent out by post, but extra ones were distrbuted by Community Associations etc.

The You and Yours programme also quoted the £14 average levy on customers for 2010 to fund payments for Feed In tariffs. This will more than likely increase in future years.

My point is that I feel the cost per unit of energy should be the price Suppliers are willing to sell this at (covering production, distribution, direct investment and profit), and the extras on top of this basic cost for Government imposed initiatives as a % on top of the bill. As it is Government imposed, I see it as a tax, and should not be hidden as it is at the moment.

albyota

I agree, it should actually be shown on the bill, this would be a kind of wake up call to the issues we all face, however, whether it is seen as a tax or as firefox suggests, an investment, we all need to realise that if we don't all pay a little bit extra now...we will all be paying very much more.....in the not too distant future...if we do nothing. If the majority of the people who have been given / bought these low energy lamps are actually using them...then the power stations don't need to burn as much gas/coal to generate as much electricity, and the gas can be used for heating and cooking. Solar P.V should aid in all of this at local level, but thats another thread.

lemontart

what exactly is feed in this context ?

Haarlem

lemontart wrote: »

what exactly is feed in this context ?

It is the payment those who use a wind turbine, or solar panels to generate electricity.

I thought this payment was for any surplus that they generate and feed into the grid, but it appears that it is a payment for all they generate including their own consumption. This is 41.3 per Kw hour, and is calculated to reward the average user with £900pa, plus £140 saving on their energy bill.

See http://www.guardian.co.uk/money/2010/feb/06/solar-power-bright-investment

So the rest of us are subsidising their useage. I realise they will have spent a considerable capital sum, but I feel this subsidy should not be hidden in the supplier tariffs we all pay.

I am not against the initiative, but I think it should be tranparent to those paying for it.

Fire_Fox

1. Nobody is stopping you getting in on the act
2. The initiative is transparent it is in the public domain
3. There are many examples of an individual taxpayer subsiding a service he doesn't use
4. Calling the levy a tax is tabloid-speak, you are clearly more intelligent than that.

Haarlem

Fire_Fox wrote: »

1. Nobody is stopping you getting in on the act
2. The initiative is transparent it is in the public domain
3. There are many examples of an individual taxpayer subsiding a service he doesn't use
4. Calling the levy a tax is tabloid-speak, you are clearly more intelligent than that.

I am not against calling it a levy, I don't mind paying it even though I don't benefit from any of the incentives / benefits it funds, but I feel it is not transparent until it is a % added to the bill and not hidden as part of the unit charge.

I also feel that social tariffs are not transparent while different Suppliers have different criteria and levels of benefit, and it is hard to find the criteria tests they apply.

Fire_Fox

Haarlem wrote: »

I also feel that social tariffs are not transparent while different Suppliers have different criteria and levels of benefit, and it is hard to find the criteria tests they apply.

That is because social tariffs are supposed to be for those in fuel poverty, which is defined as needing to use 10% or more of your income to keep your home at a safe temperature. However what would be needed and what is used in practice are two very different things, so you can't use the bills as a fair assessment. Almost all social tariffs are aimed at the elderly, those with young children and the disabled plus you generally need to be in receipt at least one means-tested benefit.

The reality of the situation is that I know several (real and virtual) single people on a low income who fall squarely into the fuel poverty category yet are not eligible for a social tariff. This is because the benefits tend to be those only available to the elderly, disabled or those with young children! These 'disadvantaged' groups are vote winners, single people don't count ....

If you don't like the system, get out there and try to change it. We are setting up a social enterprise here to, amongst other initiatives, take advantage of the feed in tariffs for the financial benefit of my area of the city. I am keen for us to purchase and distribute air source heat pumps, freeing residents of electricity only properties from crippling energy bills.