Energy bills to be capped at £2,500 for typical household

[Scott]

New Prime Minister Liz Truss will limit energy bill rises for all households for two years as the new prime minister tries to prevent widespread hardship.

A typical household energy bill will be capped at £2,500 annually until 2024.

The huge support scheme could cost up to £150bn, but Ms Truss refused to put a figure on it, saying "extraordinary times call for extraordinary measures".

Businesses will get help, with prices capped for six months, a shorter period of protection than many had hoped for.

https://www.bbc.com/news/business-62831698

[Bluespunk]

Well that’s one of Gordon brown’s suggestions being acted upon. 
 

Windfall tax next I hope. 

[John Drake]

12 hours ago, Scott said:

The huge support scheme could cost up to £150bn

More stimulus being dumped into the system. Wonder if this will have a significant affect on the British currency's exchange rate?

[stevenl]

A cap reduces the urge for energy saving, therefore imo not a good solution.

[eisfeld]

18 minutes ago, stevenl said:

A cap reduces the urge for energy saving, therefore imo not a good solution.

Yea this seems like a rushed populist solution that might come with bad side effects. Increasing consumption at this time is a really bad idea and printing money for the cap will increase inflation.

 

A price cap on kWh for typical households would make more sense. Making it progressive would be even better.

[placeholder]

Well, Truss seems to have reversed herself in price caps. Maybe she'll also reverse herself and cancel the plan to cut taxes.

[placeholder]

39 minutes ago, eisfeld said:

Yea this seems like a rushed populist solution that might come with bad side effects. Increasing consumption at this time is a really bad idea and printing money for the cap will increase inflation.

 

A price cap on kWh for typical households would make more sense. Making it progressive would be even better.

I think the price is still going to be high enough to discourage consumption.

[placeholder]

By the way, it is interesting to note that prices of wind power have long been capped. Any rate charged over the capped amount has to be returned to the government. 

[stevenl]

43 minutes ago, placeholder said:

By the way, it is interesting to note that prices of wind power have long been capped. Any rate charged over the capped amount has to be returned to the government. 

Yes, and that makes sense. A tariff cap seems more effective than an energy bill cap.

[stevenl]

46 minutes ago, placeholder said:

I think the price is still going to be high enough to discourage consumption.

It won't when you're close or over the price to pay.

[baboon]

7 hours ago, Bluespunk said:

Well that’s one of Gordon brown’s suggestions being acted upon. 
 

Windfall tax next I hope. 

And a damn hefty one at that, with any luck.

[Chomper Higgot]

It’s gift to the energy companies.

 

Billions are added to national debt and then handed out to subsidize rapacious energy charges while oil and gas companies take in vast windfall profits.

 

Windfall profits are being backed by public money.

 

 

What should have been done is tax the windfall profits of oil and gas companies to be directed to those in need.

 

As ever then Tories take care of the already wealthy. 
 

 

[vinny41]

The Energy Profits Levy is an additional 25% tax on UK oil and gas profits on top of the existing 40% headline rate of tax, taking the combined rate of tax on profits to 65%.

https://www.gov.uk/government/publications/cost-of-living-support/energy-profits-levy-factsheet-26-may-2022

 

Windfall tax is already in place

 

[Chomper Higgot]

18 minutes ago, vinny41 said:

The Energy Profits Levy is an additional 25% tax on UK oil and gas profits on top of the existing 40% headline rate of tax, taking the combined rate of tax on profits to 65%.

https://www.gov.uk/government/publications/cost-of-living-support/energy-profits-levy-factsheet-26-may-2022

 

Windfall tax is already in place

 

That’s not a windfall tax and it comes with additional tac write-offs handed to these companies.

 

Again, handouts to the already wealthy.

[vinny41]

2 hours ago, Chomper Higgot said:

That’s not a windfall tax and it comes with additional tac write-offs handed to these companies.

 

Again, handouts to the already wealthy.

UK Goverment doesn't agree with you

The Energy Profits Levy is an additional 25% tax on UK oil and gas profits on top of the existing 40% headline rate of tax, taking the combined rate of tax on profits to 65%

https://www.gov.uk/government/publications/cost-of-living-support/energy-profits-levy-factsheet-26-may-2022

[placeholder]

47 minutes ago, vinny41 said:

UK Goverment doesn't agree with you

The Energy Profits Levy is an additional 25% tax on UK oil and gas profits on top of the existing 40% headline rate of tax, taking the combined rate of tax on profits to 65%

https://www.gov.uk/government/publications/cost-of-living-support/energy-profits-levy-factsheet-26-may-2022

Yet, as I understand it, the government expects to gain about 5 billion in revenue per year but expend about 116 billion to keep prices lower for consumers.

[vinny41]

42 minutes ago, placeholder said:

Yet, as I understand it, the government expects to gain about 5 billion in revenue per year but expend about 116 billion to keep prices lower for consumers.

As I understand the costings will be released later this month and its for a 2 year period

Labour recently announced a plan that was limited to 6 months at a cost of £29 billion and they hoped to get £8 billion from an extra windfall tax.

They also planned to withdraw the planned  £400 energy rebate

So if we cost Labour plan over 2 years that does come to £116 billion