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> Not all the tax cuts announced were bad or badly welcomed. Not a tax cut per se, but I'm curious what will happen with the energy bill support scheme? That s

> Not all the tax cuts announced were bad or badly welcomed. Not a tax cut per se, but I'm curious what will happen with the energy bill support scheme? That seemed like a good thing to implement, one for which Truss and her cabinet got a lot of critics from a certain part of the media. Granted, I'm not from Britain so maybe I'm reading the room wrong and that support scheme was, in fact, not liked by everyone involved, I wouldn't know.

mytailorisrich 4y ago
Frankly, this energy support scheme is a blank cheque to the energy companies. It guarantees that the energy companies will fully profit from high energy prices, all in effect funded by the taxpayer, and Truss also rejected any windfall taxes on energy companies. I think it makes sense to limit it in its current form to this winter instead of 2 years (which is the latest status). It'll still be possible to reassess the situation next year and perhaps come up with a more targeted scheme if needed. Edit in response to reply: Truss had formally said in Parliament that there would be no additional taxes on energy companies when the £2500 price cap scheme was announced. The current windfall tax was implemented by Boris Johnson and considering it taxes energy companies at 25% instead of the normal 19% when the plan was, and again is, to tax all businesses at 25%, it's more spin than anything else.
- makomk 4y ago
  It's not exactly true that Truss "rejected any windfall taxes on energy companies" even though the opposition Labour party keep on claiming that: https://www.channel4.com/news/factcheck/factcheck-labour-keeps-repeating-misleading-claim-on-energy-windfall-tax https://www.channel4.com/news/factcheck/factcheck-labour-kee... Basically, the Tories had already placed a windfall tax on UK oil and gas before Truss even became PM that's almost identical to the one that Labour have called for, and no-one has proposed removing it. (To some extent, it looks like Labour copied the existing Tory tax.) The main reason why Truss' original proposal required so much more taxpayer funding was that her price cap lasted for two years rather than six months - Labour were relying on windfall tax revenue from well before the start of the price subsidy to make their numbers add up and still couldn't quite do it, so there's no way to extend it for longer without massive government borrowing. Most of the media coverage didn't explain this at all, they just repeated Labour's claims that all that government borrowing was because the Tories were in the pockets of energy companies and rejected a windfall tax. Nor did they explain the practical consequences of the price cap ending in April. All of the numbers thrown around for the cost of Truss' longer price cap assumed energy prices would still be unaffordably high by then, but no-one pointed this out and what it would mean for households. Of course, the moment the government annouced their energy support would end in April there were headlines everywhere about the huge bills this could cause for households.
daveoc64 4y ago
The concept is well-liked, but there were several issues with the execution: 1) Lack of targeted support - the scheme announced by the Truss government, covers everyone in the country - both rich and old. Using taxpayer money to subsidise costs for the rich isn't popular with a lot of people. That would have been OK in the short term (until a better targeted scheme could be implemented), but the original Truss/Kwarteng plan was to have the scheme run for 2 years. 2) Borrowing - Labour favours funding energy bill support through a windfall tax on gas and oil companies who have been making big profits due to the war in Ukraine. The Truss government was opposed to such a tax, and was instead prepared to borrow tens or hundreds of billions of pounds to fund it (related to #1 - borrowing a lot to give rich people support with bills isn't popular, as everyone will be paying it back through taxes.). The borrowing wasn't received well by conservatives, and sending more money to the rich energy companies wasn't liked by the left. Of course, this was all on top of the other borrowing to cut taxes and so on that was announced and then de-announced.

mytailorisrich 4y ago

Frankly, this energy support scheme is a blank cheque to the energy companies. It guarantees that the energy companies will fully profit from high energy prices, all in effect funded by the taxpayer, and Truss also rejected any windfall taxes on energy companies. I think it makes sense to limit it in its current form to this winter instead of 2 years (which is the latest status). It'll still be possible to reassess the situation next year and perhaps come up with a more targeted scheme if needed. Edit in response to reply: Truss had formally said in Parliament that there would be no additional taxes on energy companies when the £2500 price cap scheme was announced. The current windfall tax was implemented by Boris Johnson and considering it taxes energy companies at 25% instead of the normal 19% when the plan was, and again is, to tax all businesses at 25%, it's more spin than anything else.

makomk 4y ago
It's not exactly true that Truss "rejected any windfall taxes on energy companies" even though the opposition Labour party keep on claiming that: https://www.channel4.com/news/factcheck/factcheck-labour-keeps-repeating-misleading-claim-on-energy-windfall-tax https://www.channel4.com/news/factcheck/factcheck-labour-kee... Basically, the Tories had already placed a windfall tax on UK oil and gas before Truss even became PM that's almost identical to the one that Labour have called for, and no-one has proposed removing it. (To some extent, it looks like Labour copied the existing Tory tax.) The main reason why Truss' original proposal required so much more taxpayer funding was that her price cap lasted for two years rather than six months - Labour were relying on windfall tax revenue from well before the start of the price subsidy to make their numbers add up and still couldn't quite do it, so there's no way to extend it for longer without massive government borrowing. Most of the media coverage didn't explain this at all, they just repeated Labour's claims that all that government borrowing was because the Tories were in the pockets of energy companies and rejected a windfall tax. Nor did they explain the practical consequences of the price cap ending in April. All of the numbers thrown around for the cost of Truss' longer price cap assumed energy prices would still be unaffordably high by then, but no-one pointed this out and what it would mean for households. Of course, the moment the government annouced their energy support would end in April there were headlines everywhere about the huge bills this could cause for households.

daveoc64 4y ago

The concept is well-liked, but there were several issues with the execution: 1) Lack of targeted support - the scheme announced by the Truss government, covers everyone in the country - both rich and old. Using taxpayer money to subsidise costs for the rich isn't popular with a lot of people. That would have been OK in the short term (until a better targeted scheme could be implemented), but the original Truss/Kwarteng plan was to have the scheme run for 2 years. 2) Borrowing - Labour favours funding energy bill support through a windfall tax on gas and oil companies who have been making big profits due to the war in Ukraine. The Truss government was opposed to such a tax, and was instead prepared to borrow tens or hundreds of billions of pounds to fund it (related to #1 - borrowing a lot to give rich people support with bills isn't popular, as everyone will be paying it back through taxes.). The borrowing wasn't received well by conservatives, and sending more money to the rich energy companies wasn't liked by the left. Of course, this was all on top of the other borrowing to cut taxes and so on that was announced and then de-announced.