Energy bill hikes to last 17 more years - watchdog

kabayiri

MFW_ASAP wrote: »

It's enlightening how certain people concentrate on the cost of my windows. To me it seems a lot of money, but not excessive for a house with 44 windows. It is also enlightening how many of the same people concentrate solely on the price of something and the payback, a case of knowing the cost of everything and the value of nothing? They have the same approach with houses, worrying themselves to an early grave about the purchase price and not the actual value of home ownership.
...

Hmm, as Grizzly pointed out it was *you* who mentioned the window cost, I was just repeating back what you had told us.

Now you are telling us it has 44 windows.

Perhaps its a numbers thing..

I like energy conservation measures, don't get me wrong. I probably overspent on the LED lighting front, and I'm just being honest knowing that it might not pay back. I just hate halogen lights - you only have to look at one and it blows.

I'm waiting for individual heating bodysuits next. Heating the whole house is so old school

grizzly1911

kabayiri wrote: »

Hmm, as Grizzly pointed out it was *you* who mentioned the window cost, I was just repeating back what you had told us.

Now you are telling us it has 44 windows.

Perhaps its a numbers thing..

I like energy conservation measures, don't get me wrong. I probably overspent on the LED lighting front, and I'm just being honest knowing that it might not pay back. I just hate halogen lights - you only have to look at one and it blows.

I'm waiting for individual heating bodysuits next. Heating the whole house is so old school

Losing

Lying in bed with an electric blanket and duvet on is suggested, for the elderly, in the depth of winter.

I have been told that wrap around fleeces, with sleeves and boots, come with heating elements too.

michaels

So the govt is to propose two ways of reducing bills by removing non-energy costs from electricity bills:
1) Slowing down spending on insulation measures...hmm more politics than economics
2) Subsidising energy bills for low income users via general taxation rather than a levy on energy use.

Number 2 interests me as there is some interesting economics around it.

Firstly why was energy use for those on low incomes ever subsidised by other users rather than taxation. We operate a progressive tax system so generally the more you earn the more you pay, this is generally considered 'fair'. Whereas when it comes to energy use, the less you earn the higher the proportion of your income goes on energy bills, thus funding cheaper energy for the poorest by charging everyone else more for their energy is most definitely regressive (thus 'unfair'?).

The only reason I can see that such a policy would have been introduced would be because it would be a great 'stealth' tax so I would guess that it was introduced by the last labour govt, with politics trumping common sense?

Generali

michaels wrote: »

So the govt is to propose two ways of reducing bills by removing non-energy costs from electricity bills:
1) Slowing down spending on insulation measures...hmm more politics than economics
2) Subsidising energy bills for low income users via general taxation rather than a levy on energy use.

Number 2 interests me as there is some interesting economics around it.

Firstly why was energy use for those on low incomes ever subsidised by other users rather than taxation. We operate a progressive tax system so generally the more you earn the more you pay, this is generally considered 'fair'. Whereas when it comes to energy use, the less you earn the higher the proportion of your incoem goes on energy bills, thus funding cheaper energy for the poorest by charging everyone else more for their energy is most definitely regressive (thus thus 'unfair'?). The only reason I can see that such a policy would have been introduced would be because it would be a great 'stealth' tax so I would guess that it was introduced by the last labour govt, with politics trumping common sense?

Surely the better way would be to subsidise the income and allow it to be spent on fuel, insulation or a jumper as the recipient sees fit.

I don't get why the Government should decide how people spend their money. It seemed like a good idea when it was just fags and booze but it seems to be getting like too much of a good thing.

CLAPTON

michaels wrote: »

So the govt is to propose two ways of reducing bills by removing non-energy costs from electricity bills:
1) Slowing down spending on insulation measures...hmm more politics than economics
2) Subsidising energy bills for low income users via general taxation rather than a levy on energy use.

Number 2 interests me as there is some interesting economics around it.

Firstly why was energy use for those on low incomes ever subsidised by other users rather than taxation. We operate a progressive tax system so generally the more you earn the more you pay, this is generally considered 'fair'. Whereas when it comes to energy use, the less you earn the higher the proportion of your income goes on energy bills, thus funding cheaper energy for the poorest by charging everyone else more for their energy is most definitely regressive (thus 'unfair'?).

The only reason I can see that such a policy would have been introduced would be because it would be a great 'stealth' tax so I would guess that it was introduced by the last labour govt, with politics trumping common sense?

yes, of course it is a stealth tax.
For a long time this worked at disguising the taxes as there was a three party consensus; so very little debate.

Given that one aim of high energy prices is to discourage usage it makes no sense to subsidise the poor as that has a counter effect.

I can recall one of the first 'lower your energy measures' that utilities were forced to fund.
I received some low energy light bulbs for free.
What a good idea many said;
however they had screw fittings rather than bayonet type fittings so they went straight in the bin.
As always 'free' things are always cause waste.

michaels

Generali wrote: »

Surely the better way would be to subsidise the income and allow it to be spent on fuel, insulation or a jumper as the recipient sees fit.

I don't get why the Government should decide how people spend their money. It seemed like a good idea when it was just fags and booze but it seems to be getting like too much of a good thing.

Oh I entirely agree, the CO2 externality probably means there is an arguement for additional taxation of energy but instead with the reduced VAT rate (5%) there is already an incentive to use more gas (5% tax) than buy a jumper (20% tax).

However I am trying to frame this in terms of the politically possible rather than the sensible...

Loughton_Monkey

michaels wrote: »

So the govt is to propose two ways of reducing bills by removing non-energy costs from electricity bills:
1) Slowing down spending on insulation measures...hmm more politics than economics
2) Subsidising energy bills for low income users via general taxation rather than a levy on energy use.

Number 2 interests me as there is some interesting economics around it.

Firstly why was energy use for those on low incomes ever subsidised by other users rather than taxation. We operate a progressive tax system so generally the more you earn the more you pay, this is generally considered 'fair'. Whereas when it comes to energy use, the less you earn the higher the proportion of your income goes on energy bills, thus funding cheaper energy for the poorest by charging everyone else more for their energy is most definitely regressive (thus 'unfair'?).

The only reason I can see that such a policy would have been introduced would be because it would be a great 'stealth' tax so I would guess that it was introduced by the last labour govt, with politics trumping common sense?

Politics always trumps common sense. Just as a camel is a horse designed by a committee. However, 'good' and idea, the politicians just cannot implement it until they have compromised here, diluted there, added it to somethings else, and then let civil servants implement it however they see fit. The good idea thus becomes abject failure.

My take on it was that it was never down to a wish to help struggling families with energy costs. It was all to do with trying to be "green" and to look 'good' with the masses who are tending to believe the garbage put out by tree huggers....

Thus the 'good' idea was, I think, to plonk a surcharge into energy bills and force the energy companies to use that surcharge to 'subsidise' insulation for the punters. That way, over a period of time, energy usage would diminish because of this 'investment', the cost of which was distributed with a heavy bias towards either the rich (huge energy bills) or the idle non-insulators (not necessarily rich, just can't be bothered).


Of course what we get, instead, is:

• A whole raft of other so-called 'green' taxes aimed at simply raising revenue.
• An energy 'cartel' who simply don't care two hoots, but go along with it and parcel out the 'insulation' work to rogue traders.
• Thus a huge "Rogue Trading" network get to work milking the public, screwing the pensioners, cold-calling the world and his wife to death, getting filthy rich. All on the back of 'public money' collected via 'green' taxes.
• So the degree of real energy efficiency saving is minimal to say the least, but as energy wholesale prices go through the roof, so does the 'green tax' [because it is a %age].
• In turn this causes a ramping up of rogue traders, to which the public are, by now, "on to" - so these cowboys trouser £8.4 billion to do just 1% of the envisaged insulation work [reference is here ].
• So the end product is everyone paying 30% more [?] for energy, comprised of 'real' prices, plus 13% 'green taxes', plus of course extra profits for the energy companies hidden within a 'modest' percentage of the 30% increased turnover.
• All of which takes us back to square 1, which is now re-defined and articulated in the form of "The poor are dying because they can't heat their homes..."

So let's go back to a simple rise in tax to shovel more 'subsidy' to the poor.

I have an idea!

What about a "Winter Fuel Allowance?"

grizzly1911

Loughton_Monkey wrote: »

So let's go back to a simple rise in tax to shovel more 'subsidy' to the poor.

I have an idea!

What about a "Winter Fuel Allowance?"

Brought in to pay for disproportionately increasing fuel costs of the elderly a good proportion who are deemed poor.

Politically they couldn't be seen to simply increase pensions by a similar amount so a discretionary benefit was introduced. Quite when they expected energy prices to drop so they could remove it is beyond me.

Had it have been added to pensions it could of course have been taxed at the higher end. it would also have been index linked to in part cover future increases.

We now have a benefit that is withering on the vine and paid to some people who could do without it or at at least should pay the appropriate tax on it.

michaels

And the BBC is at it again

This morning the breakfast tv news headline was about a govt uturn and them asking the utility companies to freeze prices until the general election, copying Labour's policy which they had previously rubbished
http://www.bbc.co.uk/news/business-25148069

And yet a few hours later it was no longer the top story as what was actually being proposed was that the currently planned green levy increases and distribution charge increases would be delayed and that the current subsidy to the poorest energy consumers currently paid for by all customers would be shifted to general taxation. So not a uturn at all over whether it is in the govts power to impose a freeze on prices of an internationally traded commodity but much more akin to the existing policy of not increasing petrol duty by the amount planned by Labour when the cost of a barell of oil rose too much and hit the economy.
http://www.bbc.co.uk/news/uk-politics-25152060

Notice both articles use the same 'evidence' in terms of quotes from utility company insiders and nothing in the first article actually supports the 'price freeze' headlines of this morning.

grizzly1911

However it is being spun and reported a pretty crummy idea by one party does seem to have set off a sequence of events that the other party seems to be making a hash out of dealing with.

The BBC also reported that the head of OFGEM was being tough on the energy companies this week. Instead he was actually making a statement to a parliamentary committee.

Meanwhile another foreign owned energy company announces it is to shed 1400+ jobs and make it's service even worse by contacting Crapita to supply back office functions.

Energy is a pit of vipers.

Interestingly I have just had to switch supply with my previous fix having finished. the cheapest fix for 18 months I could find was 19% more than more previous tariff of 15 months (like for like with little in the way of realistic added energy efficiency available).

Standing charges seem to have made a comeback and the new supply (standing charge) is 50% of the new fixed offer made by the existing company (only offering a 12 month fix) whilst there is nothing in the actual energy supply.

The offer from my existing company was 6% more than the one have chosen but I am I sure that is a timing issue rather than ruthless competitiveness of the chosen supplier.