Abolish standing charges

Bradden

MattMattMattUK said:

snowqueen555 said:

MikeJXE said:

Netexporter said:

Ofgem pays the money into the new SoLR accounts and then gets it back, over time, through the SC.

The failed suppliers haven't got any money, that's why they are in administration.

So where is the money they were paid by their customers  ?

Gone to the share holders ?

 Why do we all have to pay for that ? 

 There are loads of suppliers gone bust so Why hasn't that been stopped ? Or has it ?

It is much like any other market, politicians and big business cause the problems and it is always the taxpayer that gets the bill or suffers.

Taxpayers have to fund things, unfortunately most people are not net taxpayers and that is why there is not enough money. 55% of households receive more in cash benefits than they pay in tax, only 15% of people make a net contribution in any one year, the lifetime figure is somewhere around 3%, that means 97% of the population take out rather than pay in, on a net basis. Taxpayers also theoretically elect the government, although that system is far from perfect.

These figures don't make sense to  me.. where did you get them from please.

MattMattMattUK

Bradden said:

MattMattMattUK said:

snowqueen555 said:

MikeJXE said:

Netexporter said:

Ofgem pays the money into the new SoLR accounts and then gets it back, over time, through the SC.

The failed suppliers haven't got any money, that's why they are in administration.

So where is the money they were paid by their customers  ?

Gone to the share holders ?

 Why do we all have to pay for that ? 

 There are loads of suppliers gone bust so Why hasn't that been stopped ? Or has it ?

It is much like any other market, politicians and big business cause the problems and it is always the taxpayer that gets the bill or suffers.

Taxpayers have to fund things, unfortunately most people are not net taxpayers and that is why there is not enough money. 55% of households receive more in cash benefits than they pay in tax, only 15% of people make a net contribution in any one year, the lifetime figure is somewhere around 3%, that means 97% of the population take out rather than pay in, on a net basis. Taxpayers also theoretically elect the government, although that system is far from perfect.

These figures don't make sense to  me.. where did you get them from please.

Why do they not make sense?

I do not have access to them all at the moment, but some are linked below.
I stated 55% of households received more in benefits that they paid in tax, that was in FYE 2021, it has actually dropped 1.2% since, so currently 53.8%.
https://www.ons.gov.uk/peoplepopulationandcommunity/personalandhouseholdfinances/incomeandwealth/bulletins/theeffectsoftaxesandbenefitsonhouseholdincome/financialyearending2022

There are various other bits that relate to those who make net annual and lifetime contributions. 
https://researchbriefings.files.parliament.uk/documents/CBP-8513/CBP-8513.pdf

Even back in 2012 one needed to be in the top 40 of earners to make a net contribution and it has only got worse since. 
https://fullfact.org/economy/are-half-british-households-burden-state/
https://www.gov.uk/government/statistics/public-spending-statistics-release-february-2023/public-spending-statistics-february-2023#total-expenditure-billions
https://www.ons.gov.uk/peoplepopulationandcommunity/personalandhouseholdfinances/incomeandwealth/bulletins/theeffectsoftaxesandbenefitsonhouseholdincome/latest

The estimates are that one needs to pay around £15k in tax in a year to be a net contributor, that factored in at about £58k taxable income (so after pensions and other pre-tax deductions, but before tax), in reality with pension deductions a PAYE salary of around £65-70k pa. The lifetime calculations are somewhat messier, with pensioners generally paying much less tax many previous net contributors fall out of net lifetime contribution fairly quickly once claiming a state pension and medical treatment in old age is expensive for the state. 

Baldeagle095

Can you imagine if Income Tax was levied on the public in the same manner as energy costs are charged?

1. Each individual would be charged a flat rate to cover the fixed costs of government.
2. All variable costs would be covered by a percentage tax on income. 
3. There would be no higher rate tax bands.
4. Perish the thought if you even considered a Personal Allowance.

I am not advocating a Personal Allowance for Energy costs. I suppose there was assistance from gov't with the Energy Bill Support Scheme in this respect in the recent past
I am not advocating 'higher rate tax bands' for large energy users, although I note that energy suppliers are relaunching schemes to pay customers to cut their electricity use at peak times.

Qyburn

Baldeagle095 said:

Can you imagine if Income Tax was levied on the public in the same manner as energy costs are charged?

You're still thinking of it as a tax. It's not, it's a product supplied by businesses. Do you think the price of eggs or milk or heating oil should vary depending on the purchaser's wealth?  

dunstonh

Baldeagle095 said:

Can you imagine if Income Tax was levied on the public in the same manner as energy costs are charged?

1. Each individual would be charged a flat rate to cover the fixed costs of government.
2. All variable costs would be covered by a percentage tax on income. 
3. There would be no higher rate tax bands.
4. Perish the thought if you even considered a Personal Allowance.

I can imagine it and it would be an awful way of doing it for energy.  

I earn six digit income a year and pay no income tax.   How do you factor that into your analogy with the standing charge?    You could say I am the equivalent of a self generating household under your proposals.

And with income, there are various reliefs and methods to avoid income tax.   Are you proposing similar with the standing charge?      What about those poor households on economy 7?  or even worse, those peak electric heating?  How are you going to give them relief for your increased "taxation"?

All you would do is push more people to self generation, who can afford it, and increase the cost to those that cannot afford it.   Could you be any more regressive than what you propose?

saajan_12

Baldeagle095 said:

Can you imagine if Income Tax was levied on the public in the same manner as energy costs are charged?

1. Each individual would be charged a flat rate to cover the fixed costs of government.
2. All variable costs would be covered by a percentage tax on income. 
3. There would be no higher rate tax bands.
4. Perish the thought if you even considered a Personal Allowance.

I am not advocating a Personal Allowance for Energy costs. I suppose there was assistance from gov't with the Energy Bill Support Scheme in this respect in the recent past
I am not advocating 'higher rate tax bands' for large energy users, although I note that energy suppliers are relaunching schemes to pay customers to cut their electricity use at peak times.

Income tax banding makes sense because higher earners are generally wealthier. At the poorer end, many people may earn 0. So in order to tax the wealthy more, you have tax proportional, or even convex relationship to income. 

It doesn't make sense to compare that to energy consumption where the wealthy may not use as much (due to eating out, solar panels, etc) while poorer people still use a chunk of energy to heat homes, cook, etc. 

Alnat1

saajan_12 said:

It doesn't make sense to compare that to energy consumption where the wealthy may not use as much (due to eating out, solar panels, etc) while poorer people still use a chunk of energy to heat homes, cook, etc. 

Not sure why you think "poor" people cook and "wealthy" people eat out. Most of the streets lined with fast food take-out shops are in poorer areas of towns because this is close to their customer base.

MeteredOut

Alnat1 said:

saajan_12 said:

It doesn't make sense to compare that to energy consumption where the wealthy may not use as much (due to eating out, solar panels, etc) while poorer people still use a chunk of energy to heat homes, cook, etc. 

Not sure why you think "poor" people cook and "wealthy" people eat out. Most of the streets lined with fast food take-out shops are in poorer areas of towns because this is close to their customer base.

Or...

Most of the streets lined with fast food take-out shops are in the poorer areas of towns because the rich don't want to live close to streets lined with fast food take-out shops.

Correlation v causation.

TractorFactor

Doesn't the standing charge go against those who aren't at that home?
If you go away on holiday for 4 weeks, you still have to pay money even though you're not using anything?

We had a time without it, but the older generation saw "lower bills" and so it was brought in, forgetting that people would then have to pay an extra charge every day.

There isn't a standing charge for water is there?

I suppose there is car tax and TV licence, which many see as a tax.

MeteredOut

TractorFactor said:

Doesn't the standing charge go against those who aren't at that home?
If you go away on holiday for 4 weeks, you still have to pay money even though you're not using anything?

We had a time without it, but the older generation saw "lower bills" and so it was brought in, forgetting that people would then have to pay an extra charge every day.

There isn't a standing charge for water is there?

I suppose there is car tax and TV licence, which many see as a tax.

Security lights, fridge/freezer, heating (eg, low level during the winter so pipes do not freeze) etc etc

Or do you believe people turn everything completely off when the go on holiday?

I can't fathom how people don't get that the standing charge is (largely) the cost of having access to a service whenever you need it. If you don't want access to that service, have it terminated (meter removed) and don't pay a penny.