MSE News: More energy deals with NO standing charges finally on the cards

born_again

Qyburn said:

Question for those arguing that some of the S/C elements should come from general taxation. It's a justifiable argument, particularly with regard to social costs which are nothing to do with production or delivery of gas or electricity.

But the question is, should these costs be met by increasing tax, and if so which tax would you increase? Or by cutting a service somewhere, and if so which service?

For me, I'd fund it by increasing income tax.

I'm sure the non tax payers would be more than happy.
Flip side tax payers will not be happy. Especially the ones who do not pay utility bills, such as kids at home. Same as a couple who both pay tax will be paying double... 

Fairer for actual users to pay. 

mmmmikey

I'd leave the policy costs where they are but itemise them for transparency. I'd then raise VAT on energy and use that to fund means tested support for those who need it. I'd also remove the price cap and let the market set the prices, but with protections in place to prevent customers getting locked in to their current supplier. I'd remove the automatic right to credit and at the same time enact legislation to stop the energy companies recovering debts through future bills. I'd also take steps to stop fixed monthly direct debit as a payment method, giving customers the option to either move to a prepayment tariff with the option to top up in advance, or to open some form of budgeting account with a properly regulated finance company.

But other than that I think things are fine as they are....

matelodave

MattMattMattUK said:

QrizB said:

Qyburn said:

For me, I'd fund it by increasing income tax.

You could reduce the personal tax-free allowance by £1000 but not change the bands. That would probably do it.

If it were down to me I would lower the personal allowance to £1,000 and combine NI and IC into one income tax.

Brilliant suggestion, that would increase the tax burden by around £45 (£12575 - £1000 x 20%/52) a week to those who pay tax and those who don't will be laughing their heads off. Even more incentive to become one of the nations "economically inactive"

Sounds a bit like the Rachael Reeves school of accounting

mmmmikey

matelodave said:

MattMattMattUK said:

QrizB said:

Qyburn said:

For me, I'd fund it by increasing income tax.

You could reduce the personal tax-free allowance by £1000 but not change the bands. That would probably do it.

If it were down to me I would lower the personal allowance to £1,000 and combine NI and IC into one income tax.

Brilliant suggestion, that would increase the tax burden by around £45 (£12575 - £1000 x 20%/52) a week to those who pay tax and those who don't will be laughing their heads off. Even more incentive to become one of the nations "economically inactive"

Sounds a bit like the Rachael Reeves school of accounting

It doesn't work like that - benefits, pensions, etc. are taxable. So as someone who is economically inactive, I would change from being a very low tax-payer to paying tax. Not a measure I would support though, as it is clearly regressive.

MattMattMattUK

matelodave said:

MattMattMattUK said:

QrizB said:

Qyburn said:

For me, I'd fund it by increasing income tax.

You could reduce the personal tax-free allowance by £1000 but not change the bands. That would probably do it.

If it were down to me I would lower the personal allowance to £1,000 and combine NI and IC into one income tax.

Brilliant suggestion, that would increase the tax burden by around £45 (£12575 - £1000 x 20%/52) a week to those who pay tax and those who don't will be laughing their heads off. Even more incentive to become one of the nations "economically inactive"

Well that depends, I would also reform benefits, higher for the disabled, much lower for those who refuse to work and I would aim to abolish "in work" benefits by the end of the term. 

matelodave said:

Sounds a bit like the Rachael Reeves school of accounting

We have the lowest tax burden of any major European economy, the bottom and middle third of earners pay the lowest effective rates of income taxation in the EU. We are overly reliant on the top 10% of earners and business, 55% of households receive more in cash benefits than they pay in tax and less than 2% of people make a net lifetime contribution. We have a deficit, a huge debt which costs a huge amount to service, crumbling national infrastructure and a huge lack of investment. When it comes to energy we have little energy security and not enough investment to allow us to decarbonise. 

I am not sure what you mean by the "Reeves school of accounting", if you mean she cannot fix a budget because she raised the wrong taxes and did not raise taxes enough then that would be a valid criticism of her, if you mean it as just a way to present a straw man for any policy you do not like then no, you are wrong.

MattMattMattUK

mmmmikey said:

matelodave said:

MattMattMattUK said:

QrizB said:

Qyburn said:

For me, I'd fund it by increasing income tax.

You could reduce the personal tax-free allowance by £1000 but not change the bands. That would probably do it.

If it were down to me I would lower the personal allowance to £1,000 and combine NI and IC into one income tax.

Brilliant suggestion, that would increase the tax burden by around £45 (£12575 - £1000 x 20%/52) a week to those who pay tax and those who don't will be laughing their heads off. Even more incentive to become one of the nations "economically inactive"

Sounds a bit like the Rachael Reeves school of accounting

It doesn't work like that - benefits, pensions, etc. are taxable. So as someone who is economically inactive, I would change from being a very low tax-payer to paying tax. Not a measure I would support though, as it is clearly regressive.

Having minimal or no tax free allowance is not regressive, it is flat, because it applies equally to all.

mmmmikey

MattMattMattUK said:

mmmmikey said:

matelodave said:

MattMattMattUK said:

QrizB said:

Qyburn said:

For me, I'd fund it by increasing income tax.

You could reduce the personal tax-free allowance by £1000 but not change the bands. That would probably do it.

If it were down to me I would lower the personal allowance to £1,000 and combine NI and IC into one income tax.

Brilliant suggestion, that would increase the tax burden by around £45 (£12575 - £1000 x 20%/52) a week to those who pay tax and those who don't will be laughing their heads off. Even more incentive to become one of the nations "economically inactive"

Sounds a bit like the Rachael Reeves school of accounting

It doesn't work like that - benefits, pensions, etc. are taxable. So as someone who is economically inactive, I would change from being a very low tax-payer to paying tax. Not a measure I would support though, as it is clearly regressive.

Having minimal or no tax free allowance is not regressive, it is flat, because it applies equally to all.

Fair enough, let me correct that - it's a measure I wouldn't support because it isn't progressive. I'd favour a tax system that works to close the gap between the have and have nots. I also see little point in giving people benefits with one hand and then taking it back as tax with the other. 

Having said that, I do agree with your comments re: targeting benefits towards those with disabilities etc. and away from those who choose not to work. I'd like to see a benefit system that is more generous to those most in need and more restrictive for those less in need.

QrizB

Cough ...

Let's not break the Forum rules, ok?

mmmmikey

QrizB said:

Cough ...

Let's not break the Forum rules, ok?

A fair point, but I think if you take it at face value, that means no discussion about standing charges or Ofgem as the whole topic is inherently political. Energy charges are regulated which makes them political. I've always taken the rule to be about avoiding party political issues.

debitcardmayhem

Well energy prices are always going to political, shame that MSE started he thread 🥴