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Time For Full Vat On Energy


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18 replies to this topic

#1 ferdinand

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Posted 25 November 2015 - 08:01 AM

Mr Osbo is alleged to have a £4bn black hole in his costings if Tax Credits are to be reduced less quickly.

I'd say that part of the solution is to put full VAT on household energy bills, which is alleged (ridiculously) to be a £3-4bn subsidy to energy companies in the rhetoric of Mr Corbyn and Mr McDonnell.

The figure for the cost to the public purse seems to be about right, so lance this boil Mr O.

If required the benefit system can be juggled a little, but let's distort markets a little less.

Ferdinand

Edited by ferdinand, 25 November 2015 - 08:02 AM.


#2 SteamyTea

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Posted 25 November 2015 - 08:04 AM

I totally agree.
The only only thing that the public respond to is a price rise. Should make people use less.

#3 gravelld

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Posted 25 November 2015 - 08:41 AM

Zero chance of this happening.

Edited by gravelld, 25 November 2015 - 09:03 AM.


#4 daiking

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Posted 25 November 2015 - 08:49 AM

Cut housing benefit by 15%

#5 SteamyTea

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Posted 25 November 2015 - 09:03 AM

If the there are about 30 million homes, and they each spend £1500/year on domestic heating.
And if we assume that industry does about the same (to save me looking up the figures).
Then to raise £4bn, each household would have to pay an extra £67/year. That is £1.3/week or 18p/day.
18p is about the price of a unit of electricity.

Another way to look at it is how much is it of household income.

So if you earn in total:

£5000 it is 1.34%
£10,000 it is 0.67%
£15,000 it is 0.45%
£20,000 it is 0.34%
After that, it would just be lost in statistical noise.

Raising an extra 15% on VAT would, on an average £1500 bill raise £50bn

Edited by SteamyTea, 25 November 2015 - 09:03 AM.


#6 gravelld

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Posted 25 November 2015 - 09:25 AM

Ever since the pasty tax and the omni-shambles, GO has become even more acutely and defensively short termist.

Leading up to what he hopes will be his coronation in a few years, there's no way he will risk more charges of [political] incompetence.

So expect more of the same.

What I'm most interested in is the news around house builders and affordable homes... I really hope that building standards are not compromised (as DC has suggested they would be before).

#7 SteamyTea

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Posted 25 November 2015 - 09:40 AM

If I gave someone £4bn, or even £40bn to build some housing to give away, I doubt that anything would happen for 3 years and if they were to be given away, then no one would be able to agree on who the recipients should be.
So it is going to sound good I am sure, but I doubt if anything much will happen.

I went to a good meeting with an old MP (Matthew Taylor). It was nothing to do with party politics. He explained why it takes so long from a minister making a statement to things actually happening. Generally 2 years to get to the local authority, then another year faffing about (his words), then a year or more (to the next budget period) before real work starts.
I pointed out (as I can be gobby sometimes) that they can raise fuel and fag duty by 6pm on budget day, why can't they introduce or change an energy tax just as quickly.
He smiled and pointed out that if central government was in control of housing, or energy, or just about anything that the LAs do now on the governments behalf, then things could happen as fast.

I was impressed with old Matt as he did not ram policy down our throats and pointed out that when he had a public meeting he got about 30 people turn up, when the local Transition Town organised a meeting, about 300 people turned up.

Edited by SteamyTea, 25 November 2015 - 09:41 AM.


#8 notnickclegg

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Posted 25 November 2015 - 09:58 AM

Raising taxes on energy is regressive. The people most affected will be those least in a position to improve insulation/airtightness, and I'd guess will also on average be in much lower quality housing stock. Plus on average, incomes get lower as you go north, while the climate is colder and therefore houses need more heating.

Fuel poverty is already a significant problem in this country. Adding VAT to energy bills will make it significantly worse.

Jack

#9 SteamyTea

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Posted 25 November 2015 - 10:30 AM

I don't think that fuel poverty is a good gauge of a regressive tax. The trouble with fuel poverty is how it is calculated. They tried to improve it by changing it from 10% of household income, to a percentage of spending money, but that does not change the real problem that we are too wasteful as a nation.
But lets say that we did raise fuel tax by 5% (more than enough to help with the budget deficit). We can then use the benefit system to help out (what it is there for after all).

Growing the economy is the way to sort out taxation as income tax is only a small part of the total taxation system. And those at the lowest end of the income scale don't don't contribute much at all. In fact, with the starting incomes now needed to start paying income tax, there is little a government can now do to raise extra cash that way.
They could raise the amount for the top 10% of earners, but to be honest, they already pay about 80% of all income tax, so that would be unjust as well.

So it really comes down to tinkering with VAT, direct purchase taxes, import and export duties, savings taxes, wealth taxes, and the one we all really hate, local taxes.

Edited by SteamyTea, 25 November 2015 - 10:38 AM.


#10 notnickclegg

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Posted 25 November 2015 - 11:14 AM

View PostSteamyTea, on 25 November 2015 - 10:30 AM, said:

I don't think that fuel poverty is a good gauge of a regressive tax.

Where did I say it was? :)

Your original plan involved raising a huge amount of money, which by definition means that any increased benefits won't offset the increased taxation. Basically someone has to be worse off if you plan to raise billions of pounds. In all likelihood it'll be the poor, as always, that will be hardest hit.

Jack

#11 Alphonsox

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Posted 25 November 2015 - 11:26 AM

Full VAT on Energy ? - An excellent idea provided you're part of one of the wealthy cohorts.

My brother works at minimum wage, rents a poorly insulated hovel and barely has loose change left at the end of a typical week. He is not alone in this country.
Raising fuel taxes makes him either poorer or colder. Explain how this is in any way fair, equitable or acceptable ?

#12 wmacleod

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Posted 25 November 2015 - 11:34 AM

The opposition will be delighted - if the Tories really silly enough to decide to make a large stick, they can't be surprised when it is used against them, which it certainly would be in Scotland. Fuel poverty and its associated issues are serious and I think some folk need to expand their vision rather than think they can fix the problem by increasing fuel taxes. We know the problem and we know how to fix it, lots of folk are working very hard to do something about it. Help them with creative and sustainable funding for their E/IWI works, replacement boilers etc not simply increasing the costs of the fuel just now.

Give everyone a 30m2 allowance per person living in a house, tax the rest as under occupied space. They do it for those benefits, why not for those who work? Far more efficient having folk sharing, if CO2 saving is your goal you can save far more living in and heating one house than two, solve the lack of houses problems as well as house sharing would increase. Would raise lots of money and be about as popular as council tax. That way you can avoid hitting the poorer families about to lose tax credits who are an economic benefit (in that they are providing the next generation of workers to pay your pensions and look after you in old age, as well as spending around 100% of their income every month mainly locally). The tax credit thing angers me. All so that the DINKIES and single income no dependents can have a few more quid in the bank.

#13 mikesharp01

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Posted 25 November 2015 - 11:38 AM

It is neither fair or equitable it's politics. Scuttlebut is loads of changes to housing. Since when was £450k affordable for a first time buyer! You will need 2 of you earning in the top 20% of earners, over 44k, to come close and only the repaying for 30 years. We really have mortgaged our children's futures.

#14 Triassic

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Posted 25 November 2015 - 01:07 PM

On Wednesday – a few hours before the Chancellor makes his Autumn Statement – the ONS will reveal the 2014-15 winter death statistics, with the number of unnecessary winter deaths expected to be at their highest for 15 years.
If even one person dies this winter because they can’t afford heat their home properly, then I believe that’s scandalous. In fact the figure is likely to be thousands.
http://www.independe...d-a6747391.html

#15 SteamyTea

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Posted 25 November 2015 - 01:43 PM

I missed the bit about the RHI (phone rang). What was said?

Industry to be exempt from 'green taxes' then.

Edited by SteamyTea, 25 November 2015 - 01:57 PM.


#16 DavidWright

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Posted 25 November 2015 - 06:20 PM

View PostAlphonsox, on 25 November 2015 - 11:26 AM, said:

Full VAT on Energy ? - An excellent idea provided you're part of one of the wealthy cohorts.
It would depend on what was done with the money raised.
Nick's calculation speculated on a £50bn fix for a £4bn hole. That would leave rather a lot to spare for benefits of various types to aid those hardest hit.

However, just an academic point since neither the tax nor the benefit seem likely any time soon, for reasons already discussed above...

#17 SteamyTea

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Posted 25 November 2015 - 09:38 PM

Strange that they have not raised transport fuel, it is close to £1/lt, down from £1.45/lt.
Maybe they are waiting for the VW scandal to mature.

#18 SteamyTea

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Posted 25 November 2015 - 09:54 PM

Here is something about the RHI from http://www.edie.net/...gy-policy-2015/

Seems to be little difference.

Renewable heat

Later in his speech, Osborne claimed "there is no more important infrastructure than energy" as he pledged to double spending on energy research and also double the support for low-carbon electricity and renewables. But it is important to note that this is not actually 'new' money - it is just the existing fund for supporting renewable energy agreed under the coalition Government.
The RHI scheme, which provides financial incentives suppliers of of renewable heat, will see its funding rise to £1.15bn in 2021, "to ensure that the UK continues to make progress towards its climate goals."
However, this actually means that spending on the RHI scheme will be around £690m lower than what was originally forecast by the Office for Budget Responsibility (OBR). And the UK still needs 20TWh more renewable heat by 2020, to meet the Government’s 12% target.
Responding to the announcement, Renewable Energy Association (REA) chief executive Nina Skorupska said: "Our members recognised the need to make savings and presented to Treasury and DECC how we could optimise the RHI budget. A £700m cut is large, but we look forward to working with the government on reforming this crucial area."

#19 jsharris

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Posted 25 November 2015 - 10:15 PM

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No question. Full VAT on energy (or even a higher rate on it as allowed under EU rules) and then offset the hardship on poorer families with the tax credit system.

It's been shown time and time again that price is the biggest incentive to get people to change behaviour. Car fuel consumption is perhaps one of the best known examples, where the market has driven manufacturers to reduce consumption, year on year.

If we were to do the same with houses we'd kill two birds with one stone. We'd reduce energy usage and increase tax revenue, with those who use the most energy (or more likely waste the most energy) paying for it.

Edited by jsharris, 25 November 2015 - 10:15 PM.